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More key objectors to Tatts-Tabcorp super merger

Tue, Mar 28, 9:29am by Staff Writer

Just days after it emerged that corporate bookmakers would object to the Tatts-Tabcorp merger process currently before the Australian Competition Tribunal, the Victorian racing industry has confirmed it would also oppose the $11 billion marriage of two of Australia’s largest wagering companies.

While the proposed merger has the widespread support in every other racing jurisdiction, including the enthusiastic support of Racing NSW, Racing Victoria have put forward a submission detailing its concerns over the impact a merger would have on competition.

The Australian Financial Review has seen RV’s submission, put together by interim CEO Giles Thompson, which details its objections.

“Tabcorp and Tatts are … the only certain Australian bidders for the next retail licence,” Thompson says. “The proposed merger would therefore result in only one certain bidder [and] it is also unlikely Tabcorp would face competition from an international bidder or indeed any other bidder.”

“In the event that there is only one viable bidder for the retail licence, the amount of revenue … the bidder is likely to offer in its bid is likely to be less than that would be offered in a competitive bid. There would be no need to to make the bid attractive by offering more generous funding to the local industry.”

The gambling and racing industries in Australia are extremely political and there is more at play then simply RV’s concerns over the influence Tatts-Tabcorp would wield in the market.

There have been suggestions that Racing Victoria may look to establish its own retail license when Tabcorp’s Victorian license expires in 2024, similar to that of the Hong Kong Jockey Club, but Thompson’s statement would indicate that may not the case.

While Tabcorp contributes nearly $200 million to the Victorian racing industry annually via the joint venture retail license agreement, tensions have escalated over media rights since Victoria’s decision to go it alone and establish its own broadcast brand., owned by the Victoria racing industry and the Seven Network, operates in opposition to Tabcorp’s Sky Racing network.

The influence wielded by Tabcorp’s ownership of Sky Racing is one of the key objections, Crownbet put forward in the submission to the ACT.

It’s something that also objects to according to the AFR, with the combined media and wagering giant created by the merger putting it in a perilous position when I comes to competition.

“The merged entity will be in a position to use the power afforded from the wagering relationship to create a nexus between wagering and media rights deals,” said.

Tabcorp took the merger approval straight to the ACT because it wanted to lay bare the broader benefits for the industries it partners with, especially the racing industries.

But RV’s position, which is supported by Harness Racing Victoria and Greyhound Racing Victoria, could prove another fly in the ointment.

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