Tabcorp-Tatts Merger Under Further Review
The Australian Federal Court has decided to uphold an appeal against a potential merger between local betting firm Tabcorp Holdings and lottery operator Tatts Group, and Kiwi’s are watching the updates unfold with interest. If completed, the $11 million deal would create something of a monopoly that would dominate a huge portion of the local and international betting market.
The companies’ plans for their million-dollar merger have now received a significant blow, with the Federal Court rejecting the deal and leaving uncertainty in its midst. The court has instead decided to favour the side of the local competition, which argues that the deal’s approval may create an unfair environment for other Australian operators.
Under the court’s order, a decision will be postponed while the matter is reviewed and further considered by the Australian Competition Tribunal (ACT). The three Federal Court judges have also revealed that they will publish the reasons for this decision within five days.
A 3rd Delay
The court’s decision to send the matter back to the ACT for consideration is a setback that could take even more time to be fully resolved, especially as the deal was proposed over a year ago and has already been delayed by the court challenge issued by the Australian Competition and Consumer Commission (ACCC).
This marks the third attempt of Tabcorp and Tatts to merge over the past decade. As mentioned above, if the deal goes through, it would create a formidable betting firm that could become a major competitor for online betting rivals such as Paddy Power-Betfair and William Hill.
Merger Could Create Unfair Local Competition
In June this year, the ACT approved the merger after revealing that the deal had been ‘satisfied in all circumstances’ and that the merger would significantly benefit the public. Then, just a month later, the ACCC filed a court order against the proposed deal, insisting upon further judicial review.
The ACCC, which has acted as the regulator supervising the merger, opposed the deal on the grounds that it could have a negative impact on both the Australian gambling market and local competition.
The ACCC has noted that the conglomerate could have market power so strong that it could actually harm local competition should the merger take place. Now, it is the Australian Federal Court that has once again put the deal on ice for similar reasons, delaying the Tabcorp-Tatts deal and leaving the two companies uncertain about the future of their proposed union.