Australian competition commission mulls Tatts-Tabcorp merger

It may be a while yet before the Australian Competition and Consumer Commission (ACCC) publishes its opinion on the proposed A$11.3 billion merger between gambling groups Tatts and Tabcorp, judging by a statement from the Commission Thursday.

The statement by ACCC chief Rod Sims notes that the Commission is examining the implications and notes:

“The ACCC (Australian Competition & Consumer Commission) has consulted extensively with industry participants within the racing, wagering, and gaming industries. 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.”

Australian media reports have reminded readers that the ACCC killed a similar proposed merger by the two companies ten years ago on the grounds that it would create unfair competition in the market, and that the approval of the Commission may require sell-offs of certain assets.

In his statement Thursday, Sims said that his Commission’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.

Given these concerns, Tabcorp has proposed a divestment initiative to sell its Queensland electronic gaming machine monitoring business, Oddessy.

“Another consideration is whether the combination of Sky Racing and Tatts 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, referring to Tabcorp’s ownership of Sky Racing – a dominant broadcaster of media content.

“The proposed merger will result in the combination of Sky Racing and Tatts’ retail wagering operations in Queensland, South Australia, Tasmania and the Northern Territory,” the Commission observed.

The Commission does not seem to be overly concerned about the impact of the proposed merger on the online gambling sector, commenting:

“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.”

The ACCC’s final decision is scheduled to be announced on May 4, 2017.