The Ubiquitous Neil Clark I

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Sir Winston Churchill will be turning in his grave. For 83 years, the Tote, Britain's publicly-owned bookmaker, set up by Churchill when he was chancellor of the exchequer in Stanley Baldwin's Conservative government in 1928, has been an integral part of the British horseracing scene. Now, however, the institution endearingly known as "the Nanny Goat" is to go the way of our railways, our buses and our utilities and be transferred to the private sector.

While free-market enthusiasts will no doubt be pleased to see a further shrinking of the state, the sale is likely to prove disastrous for a sport which employs more than 100,000 directly and indirectly, and which brings joy to millions of people's lives.

The Tote is no ordinary bookmaker. When it was set up it was given a monopoly of on-course pool betting, with the proviso that its profits would be ploughed back into racing. Last year, the Tote put nearly £19m back into the sport and sponsored more than 700 races. Privately owned bookmaker Betfred – one of the two surviving bidders for the Tote, has said it would guarantee a minimum of £122m for racing during the seven-year period of the exclusive pool betting licence, and its rival, Sports Investment Partners, has pledged £11m per year for racing "in perpetuity". But it's hard to see the same level of commitment to the sport coming from a privately owned Tote owner – eager to please shareholders and investors – as that which occurs at present.

It's largely because of the Tote and its generous support of horseracing that we have such diverse racing in Britain – with no fewer than 60 racetracks, ranging from grade one venues such as Cheltenham and Haydock, to cosy, intimate arenas like Kelso and Cartmel. At present the Tote effectively subsidises the smaller, less profitable tracks as it pays a percentage of the gross profits it makes on any day to every racecourse, even if it may make very little money there at all. John Heaton, a former Tote chief executive, fears that privatisation will lead to the tracks which generate the most pool-betting revenue demanding a bigger share.

The danger is that racing could go the way of football when the Premier League was introduced – with a huge divide opening up between the bigger tracks and the smaller venues – many of whom, deprived of their Tote subsidy, would face a real fight for their existence. Heaton is not alone among senior racing figures in believing that the sale of the Tote should never have been contemplated.

The argument that the sale is urgently needed due to the dire state of the nation's finances is risible – the money the government is likely to raise from the sale – ranging from around £60m to £200m – could be less than what it has spent up to now on the military intervention in Libya. And with the betting industry growing all the time – operating profits for the Tote rose by 13% last year – the taxpayer will lose out in the long term.

Like the sell-off of the railways, the sale of the Tote is a classic example of dogma overriding common sense, and further evidence that the coalition is more extreme in its ardour for privatisation than even Margaret Thatcher.

For all of the Thatcher years, the Tote chairman was the former Labour MP Woodrow Wyatt, a keen racing man who boosted the profile of the organisation. Selling the Tote entered the political agenda under New Labour, but while Blair and Brown dithered on the issue for a decade, the coalition has, regrettably, shown no such indecision. And it showed its true colours by dismissing a racing-backed initiative to set up a Tote Charitable Foundation, to avoid the Tote's sale to the private sector.

Disappointingly, leftwing opposition to the sale has been muted. Perhaps it's because some on the left regard gambling as somehow sinful, and that while it's right and proper for hospitals, schools and the Royal Mail to be publicly owned, having a state-owned bookmaker doesn't really matter.

Or maybe some agree with Harry Pollitt, the former leader of the Communist party, who argued that we would have had a revolution in Britain long ago if it hadn't been for horseracing.

But unless we are going to abolish racing and gambling altogether – and only the more extreme animal rights groups and religious fundamentalists would go that far – then a publicly owned bookmaker with a strong commitment to supporting the sport is essential.

There are not many things in modern Britain that are truly world-class: horseracing is one of them. But the free-market Maoists currently occupying the corridors of power seem determined to wreck a much-loved institution that has carried out its duties in support of racing perfectly well for the best part of a century.