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Tatts-Tabcorp merger destined for ACCC approval

Fri, Mar 10, 10:04am by Staff Writer

The super-merger between gambling giants Tabcorp and Tatts look set to proceed, despite the ACCC raising a few concerns about the structure of both businesses.

While a decision on final approval on the $11 billion merger won’t be made until May, ACCC chief Rod Sims has conceded that there appears to be enough competition in the wagering and gambling sector for Tatts and Tabcorp to join forces.

That judgement was made on the basis that the ACCC viewed traditional retail wagering and digital wagering as essentially the same product, so therefore the growth in the corporate bookmakers market created enough competition in Australia.

“In that market Tabcorp and Tatts are facing sufficient competition,” he said in a statement. “We accept the market is changing and people are betting with their mobile phone as they sit in a pub.”

“We judge that entity, albeit having a majority share, will be under sufficient threat through the five or so larger corporate bookmakers to provide enough competition for recreational wagerers,” he said.

The ACCC has admitted that a merger between Tatts and Tabcorp would result in the company having more the 50 per cent of the market.

But it wasn’t that market share strength which concerned the ACCC, with the structure of Tatts pokie business in Queensland drawing scrutiny as well as Tabcorp’s ownership of the Sky racing broadcast business.

“The ACCC’s preliminary view is that the proposed merger is likely to substantially lessen competition in the supply of monitoring and other services to pokies venues in Queensland,” the ACCC said.

Tabcorp owns Odyssey, an electronic gaming machine monitoring business in Queensland, but it has already offered to sell off the business to help the merger proceed.

“The ACCC has raised one substantial issue of concern, which is in relation to electronic gaming machine monitoring services and repair and maintenance services in Queensland. To address this issue, Tabcorp has committed to divest its Odyssey Gaming Services business and is well advanced with a sale process,” Tabcorp said in the statement.

ACCC’s concerns about Tabcorp’s ownership of Sky Racing aren’t as pressing, with Tabcorp and Tatts’ retail wagering monopolies largely geographically based.

“The combination of Sky Racing and Tatts (TTS) is likely to materially increase the market power currently held by Tabcorp in its dealings with licensed venues and racing media rights holders,” Sims said.

The likely outcome of a merger would be a national tote, something which would revolutionise the way parimutual wagering is conducted in Australia.

“It is our view that strong competition between online corporate bookmakers will mean recreational customers will continue to have choice about where to place their bets,” Sims said.

Sims confirmed that the ACCC would give a formal response to the merger proposal on May 4.

“The matter raises complex competition issues in a range of different areas, and industry participants have provided many differing views, all of which we will need to examine in greater detail,” he said.


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