Horseracing’s £90m share of the sale of the Tote will be distributed through a new grantmaking charity and a grant scheme, John Penrose, the minister responsible for horseracing announced today.

The government sold the Horserace Totaliser Board, or 'Tote', last year for £265m, with the proceeds totalling £180m. It was promised that the racing industry would get half of the amount.

The Racing Foundation was registered with the Charity Commission at the end of last year, and on 14 March 2012 received its first £10m for the year 2011-12. It will fund charitable causes in racing such as supporting people injured in the sport and advancements in horse-related vetinary science.

The grant scheme will make state aid compliant grants to eligible applicants. The British Horseracing Authority won the contract to administer the service last year.

Paul Bittar, chief executive of the British Horseracing Authority said: “We are determined to use the opportunity provided by the proceeds from the sale of Tote to create a meaningful legacy for the entire sport.”

He added: “Racing sensibly wants to build an endowment to provide the sport with a sustainable income stream for good causes and projects across the industry.”

For the next three years the government will pay £10m a year to the racing industry and the British Horseracing Authority Chairman’s Committee will agree the split between the charity and the grant scheme with the Department of Culture Media and Sport. Future payments will be agreed at the next spending review.

More details of both schemes will be available once they have been finalised.