State-owned bookmakers the Tote is to be privatised, the government has confirmed.
Tote chairman Peter Jones is in favour of the sale
The historic bookies will be sold to a racing trust and lose the exclusive right to operate pool betting.
The Minister for Media and Heritage said it was "no longer appropriate, nor acceptable, for the Tote to remain in public ownership."
The Tote, founded in 1928, is a long standing symbol of British horse racing.
The proposed changes to the Tote have been outlined by media minister Lord McIntosh. It has been government policy to sell the Tote to a racing trust since 1999.
The trust will be issued with an exclusive licence to conduct pool betting, but this will be time-limited and non-renewable, opening up the market to competition.
Lord McIntosh added: "Once the transitional licence period has come to an end, the pool betting market will be open to new entrants, and there is no plan to limit the number of licences available."
Most observers believe the trust will be granted an exclusive licence for between five and seven years.
The Tote - or Horserace Totalisator Board - was founded by Winston Churchill in 1928 as a safe haven for punters, controlled by the state, and beyond the reach of illegal bookmakers.
The privatisation of the Tote has been included in the draft of the new Horseracing Betting and Olympic Lottery Bill.
Lord McIntosh said he was hopeful it would become legislation before the next General Election.