The $11 billion merger proposal between Tabcorp and Tatts has finally been given its regulatory stamp of approval. This means that these two giants in the gambling industry can integrate its activities and form one dominating gambling powerhouse.
Long Awaited Tabcorp-Tatts Approval
Paula Dwyer, the Chairperson of Tabcorp, expressed her joy stating that the merger will create an integrated company. She further asserts that the merger would allow for the company to be a great investment, and open up doors for innovation. According to Dwyer, the amalgamation of the two companies will allow them to compete in the gambling entertainment marketplace on a global scale due to their positioning.
However, this is not to be mistaken for being too dominant in a case that it could be considered an illegal monopoly.
The Australian Competitions Tribunal (ACT) finally delivered their verdict on Tuesday the 20th of June 2017. This following a hearing which transpired over two weeks to discuss the fate of the merger. It was really difficult to tell what the outcome would be as for the most part; the results seemed to hang in the balance.
Hold up with the Tabcorp-Tatts Merger
The main hold up with the approval of the merger was the fact that companies such as; Crownbet, SportsBet, Racing.com, Racing Victoria and most importantly, the Australian Competition and Consumer Commission (ACCC) all opposed the merger. This made it very difficult for the merger to proceed, even with the backing of most of the Australian racing industry.
Overcoming the ACCC
In an attempt to get the merger approved, Tabcorp made the decision to bypass the assessment made by the ACCC. Instead, they went straight for the approval of the ACT. This is considered to be an unusual move as the ACT is thought to be the last resort for those seeking approval for their mergers after ACCC rejection.
They did this because they felt uneasy with the initial ACCC preliminary assessment whereby they seemed to have reservations about the merger. Tabcorp felt that they would have a better chance at the tribunal, giving them an opportunity to receive voiced support from their racing stakeholders in a public space. However, this move also brought about a platform where people opposing the merger could also voice their concerns. The opposition expressed that the merger could lead to reduced competition when it came to betting licenses and media rights for racing clubs.
What the Opposition Had to Say
Cormac Barry, the CEO of Sports bet claimed that the dominance of Sky Racing would create huge leverage for the merger. Ultimately meaning that the Tabcorp and Tatts could put an enormous amount of pressure on every state as well as the territory governments and the Australian racing body.
In the meantime, ACCC expressed concerns that Tabcorp would claim a projected $130 million in cost-saving public benefits.
However, ACT disagreed with these allegations.