ACCC demands court reviews ‘errors’ of Tabcorp-Tatts merger

ACCC demands court reviews ‘errors’ of Tabcorp-Tatts merger

Tuesday, July 11, 2017
An under pressure Tabcorp governance has prioritised its merger with Tatts Group ahead of all projects

The A$11 billion merger of Tabcorp Holdings and Tatts Group has been placed into doubt, following the news that the Australian Competition and Consumer Commission (ACCC) has filed a federal court order demanding a new judicial review of the deal and its impacts on the Australian betting market.

ACCC chairman Rob Sims did not hold back his punches when placing the commission’s court order. Sims detailed that merger review body the Australian Competition Tribunal (ACT) had failed to take into account stakeholder-wide concerns relating to the merger’s impact on current and future market competition conditions.

Sims further stated that the ACT’s review had been flawed from its beginning, as the body had taken an “inconsistent” position by asking concerned market stakeholders to convince the tribunal that the merger would “substantial lessening of competition”.

Putting forward its court demand, the ACCC stated that there has been a “litany of concerns” regarding the review of Tabcorp-Tatts by the ACT, which have to be investigated before an “Australian betting and gambling outright market leader” is allowed.

“We believe we had no option but to seek a review of these three, what we say, are reviewable errors, particularly because they set such important precedents for the decisions we have to make into the future,” Sims commented on the court order.

As merger leader, Tabcorp governance reacted to the ACCC actions by issuing a short corporate statement detailing that it will “provide further information on the matter as appropriate”.

An under pressure Tabcorp governance has prioritised its merger with Tatts Group ahead of all projects, as it tries to smooth investor concerns.

This year has not been kind to the Australian ASX gambling firm, which has recorded a performance dip and been fined a record A$45 million by financial watchdog AUSTRAC from multiple compliance failures. 

The ACCC’s application will impact the timing of the implementation of the transaction, though the precise impact will not be known until the Court has considered the matter. Tabcorp considers that implementation remains achievable in the last quarter of 2017.

Totally Gaming says: It’s clear that there is ‘bad blood’ in the Australian betting market regarding the merger of Tabcorp-Tatts. An underperforming Tabcorp wanted to quickly processes multibillion-dollar merger. However, with many intricacies and impacts concerning competitors and competition, this was never going to become a likely solution.

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