Tatts-Tabcorp merger meeting corporate opposition
News on 24 Mar 2017
News on 24 Mar 2017
Last week’s strategy shift by Tabcorp to speed up its proposed A$11 billion merger with the Tatts group (shifting the approval process from the Australian Competition & Consumer Commission to the Australian Competition Tribunal – see previous reports) has triggered opposition to the merger by corporate rivals led by CrownBet, according to Australian media reports Friday.
CrownBet is seeking leave to join the review by the Tribunal, claiming that the Tatts-Tabcorp deal has the potential to irrevocably change the structure of racing and wagering in Australia.
CrownBet points out that the merger will result in every state-based totalisator except Western Australia (where the operations are government-owned) being included in the combined companies, which already operate the monopoly racing broadcaster Sky Racing.
In it submission, CrownBet claims the Tatts-Tabcorp merger would “change the structure of the competitive landscape for, among other things, wagering and racing media in Australia in a way that cannot be reversed,’’ and would have “profound implications for corporate bookmakers, racing industry participants, suppliers and acquirers of racing media rights, and customers of wagering services.’’
“It will create a single entity that holds exclusive totalisator wagering rights and associated retail wagering exclusivity in every state of Australia except Western Australia together with a dominant position in relation to rights to racing content in Australia through Tabcorp’s ownership of Sky Channel,’’ the filing noted.
The Australia newspaper points out that Sky Racing holds exclusive vision rights to 96 percent of all Australian racing and refuses to supply it to corporate bookmakers for distribution to their customers, or run advertising from those competitors.
The Tribunal has the power to require that certain assets be divested in the interests of fair competition prior to approving a merger.
Big money is at stake in the arguments; Tatts and Tabcorp operate their TABs in partnership with the state-based racing bodies and have argued they are its largest funding source, delivering A$1 billion in revenue to them and A$200 million in gambling taxes to the state governments that license them.
