08/21/2003 11:00PM

Magna buys part of AmTote


Magna Entertainment Inc., the racetrack operator, has purchased a 30 percent share in AmTote Inc., one of the three major bet-processing companies in the racing industry, Magna announced on Friday.

The price of the 30 percent share was $3.82 million, Magna said in a release, giving AmTote a $12.7 million total valuation. AmTote is currently owned by a private partnership that includes John C. Corckran Jr., the company's president, and members of his family.

AmTote provides totalizator services for approximately 70 wagering outlets in the United States, including seven of Magna's 15 racetracks.

Autotote, with two-thirds of the market share in the United States, is the largest tote company. AmTote and the third company, United Tote, split most of the rest of the U.S. market.

AmTote's former president, Ted Mudge, is now a senior Magna official. Mudge retired from AmTote several years ago but was hired by Magna shortly thereafter.

Magna is making the purchase at a time when the racing industry is re-evaluating its relationship with tote companies, which have come under intense scrutiny since last year's Breeders' Cup pick-six scandal.

Last Sunday, the National Thoroughbred Racing Association released a series of recommendations to improve the industry's bet-processing network by creating a national security office that would monitor every bet placed in U.S. commingled pools, and recommend minimum standards for wagering outlets and tote companies. The NTRA report also said that tote companies needed to make significant improvements to their existing networks, without estimating the cost of the upgrades.

As an offshoot of the creation of the office, several racing industry officials have said in the past week that the sport should seriously consider creating its own bet-processing company.

Magna's president, Jim McAlpine, did not return a phone call on Friday. Corckran declined to comment on Friday.