CrownBet, others applaud decision
The proposed merger of Australian bookmakers Tabcorp and the Tatts Group has been tossed out of Federal Court and sent back to the Australian Competition Tribunal for further review; the ACT granted conditional approval of the deal this summer.
The merger was opposed by Australian Consumer and Competition Commission, which contends that any benefits to the public are outweighed by threats to the competition. Among the concerns is that if the merger goes forward, Tabcorp’s racing broadcast arm, Sky Racing, would have too much power in its dealings with pubs and clubs.
The ACCC applied to the Federal Court for a judicial review of the approval, alleging the ACT made “reviewable errors” in its assessment of the potential harm the merger would create for competitors, reported the Herald.
Tabcorp CEO David Attenborough says merging with Tatts could save the companies $130 million a year. Both Tabcorp and Tatts have defended the deal as a way to make them more competitive with international bookmakers. But the Sydney Morning Herald has said the planned merger would create “an $11 billion gaming behemoth,” and other gaming companies like CrownBet, Racing.com and Racing Victoria also oppose the plan.
“The court orders that the decision of the tribunal be set aside,” said Justice Nye Perram in his ruling last week, “and the matter be referred back to the Australian Competition Tribunal for consideration.”
ACCC Chairman Rod Sims said he’s “pleased’’ with the decision but is waiting for more details of the judgment. “The ACCC argued that the tribunal had made an error in failing to assign less weight to benefits which would be retained by Tabcorp, its shareholders and the racing industry, and not shared with consumers more broadly,” Sims told the Australian.
“I look forward to it going back to the competition tribunal and would be hoping for a different outcome when it hears the case again,’’ said CrownBet Chief Executive Matt Tripp.
The Tribunal has been given a week to make a new determination, and ACT Justice John Middleton promises he will rule on the matter “as soon as practically possible.”
“If the issues in contention are of small compass, the Tribunal would endeavor to make a new determination by September 28, 2017 after considering the submissions of the parties and the participants,” he wrote. A quick hearing by the ACT would benefit Tabcorp, as Tatts shareholders are due to vote on the deal at an October 18 meeting.
The ACCC may still appeal any subsequent ACT ruling to the High Court.
