‘Loch Ness Monster’ of gambling bids to replace Winston Churchill’s Tote

A betting company owned by a secretive Australian businessman described as the “world’s biggest gambler” has launched an audacious attempt to replace the Tote Group at UK racecourses.

Telegraph Sport has learnt that Colossus Bets have approached several racecourses with a multi-million-pound offer to set up a new on-course pool betting service and oust the Tote, the gambling brand set up by Sir Winston Churchill.

Colossus Bets was founded in 2013 by Zeljko Ranogajec, a world-beating punter nicknamed the “Loch Ness Monster” in Australia because he is rarely seen in public, and Bernard Marantelli, a former public relations executive turned professional gambler.

The mysterious Ranogajec – who was also nicknamed “The Joker” on the Australian casino scene due to his outrageous success – is reportedly worth billions, with a 2012 court case in Australia hearing evidence that he placed more than £750 million each year in bets. The 61-year-old, who uses the alias John Wilson, owns a property at the ultra-exclusive One Hyde Park development in Knightsbridge.

Tote ‘doesn’t really work for a lot of us’

Marantelli is understood to have led the approach on behalf of Colossus, which is being taken seriously by the racecourses. There are 59 courses in the UK with 15 – including Cheltenham and Aintree – owned by the Jockey Club, 16 smaller courses owned by the Arena Racing Company (ARC) and the rest owned independently, including the likes of Ascot, Goodwood and Newbury.

The Jockey Club, ARC and Large Independent Racecourses group are engaged in talks about Colossus’s offer. While some racecourses are thought to be more tempted than others to accept, it is understood they will come to a collective decision and move as one.

“The current arrangement with the Tote doesn’t really work for a lot of us,” a source with knowledge of the negotiations told Telegraph Sport. “There’s potential for Colossus to change that, but we’re miles away from doing a deal.

“They have work to do to prove their credibility. The courses are all talking, but there’s work to do. It’s very politically charged.”

Tote’s 96-year history

The Tote, which is owned by a consortium of high-net-worth investors including racing luminaries such as Sir John Gosden and Frankie Dettori, pay about £13 million a year to racecourses for the right to offer pool betting services to punters on site.

The 1928 Racecourse Betting Act, introduced by Churchill, set up the Tote as an attempt to combat the growth in illegal betting, and to provide a regular source of funding for the sport.

The Tote operates so-called “pool betting”, where all the stakes placed on a particular race are pooled and the total amount is distributed to winners, minus a commission taken by the operator. Pool betting also includes a range of creative multiple bet options, such as accumulators and place pots, that can lead to large prizes being won.

The Tote was run by the government until 2011, when it was privatised by Chancellor George Osbourne and sold to bookmaker Betfred for £265 million, with British Racing receiving £90 million. Betfred sold the on-course business for £115m five years ago to a group of investors trading under Alizeti Capital, who rebranded as The Tote Group, but retained control of the 517 high-street bookmakers that were part of their original purchase from the government.

The Tote Group pay 10 per cent of their gross profits to the Horserace Betting Levy Board, who contributed £70.5 million in prize money to racing this year, as well as an additional £50 million over seven years to the racecourses.

Colossus’s offer to usurp the Tote is likely to be opposed by many within racing, not least because many influential figures have invested in the operation. While most of them have remained anonymous, the majority of the Tote Group’s 160 shareholders are believed to be owners and breeders, while the Racecourse Owners Association are also investors.

The Tote Group’s biggest success has come in the form of the World Pool, which allows punters all over the world to bet into a single pool on certain designated races generating multi-million-pound pay-outs. Run by Hong Kong Jockey Club, the World Pool has generated significant financial returns for the sport, with racecourses whose meetings are selected for World Pool days earning between £500,000 and £800,000 for each fixture.

Ranogajec made millions in blackjack

Ranogajec and Marantelli are the two main shareholders in Colossus Bets with Denis Mikan, chief executive of an online gaming company based in the Isle of Man, a director of the company. In addition a “John Wilson” is listed as a “person of significant control” at Companies House. This is believed to be Ranogajec’s alias as Wilson is the surname of his wife, Shelley.

Ranogajec made millions playing blackjack and poker in Australian casinos in the 1980s before turning his attention to horses. Much of his subsequent success came in pool betting after he was able to negotiate rebates of up to 10 per cent from the operators, leading to winnings of hundreds of millions.

Under his model, Ranogajec and his army of gambling analysts only had to break even with their bets to make a profit made up from their rebate. In 2012, Ranogajec was named as being the leader of a gambling syndicate, The Punters Club, whose success led to the Tasmanian Tote experiencing financial problems which led to its sale.

Ranogajec has been the subject of a multi-year investigation by the Australian Taxation Office (ATO), which ended in 2012 with both parties reaching an undisclosed settlement.

Telegraph Sport has approached Colossus Bets for comment.