ACCC may advise against Tabcorp-Tatts tie-up on final hearing day

The final phase of the $11 billion Tabcorp-Tatts merger hearing has begun with closing arguments expected to make a huge impact.

The 14-day hearing held by the Australian Competition Tribunal in Melbourne has not been a walk in the park for the two biggest gambling giants in Australia.

The closing submissions began yesterday and will finish tomorrow, with Tabcorp expected to argue that the wagering market will remain strong and competitive due to the presence of “well resourced” corporate bookmakers.

It is also expected the company, headed by CEO David Attenborough, will fight back against the argument competition for media rights will be lessened since Racing.com – a strong opponent of the tie-up – scored vision rights in South Australia.

Racing vision is a contentious issue with many opponents, not just Racing.com, suggesting the tie-up will continue the “lockdown” over media rights.

This week, racing industry’s economic expert, Tom Hird, highlighted Tabcorp’s position in terms of market power in retail wagering venues. He said the merger would mean any new entrant trying for vision rights at non-Tabcorp controlled venues currently run by Tatts would be handicapped.

Mr Hird added the deal may give the merged entity more power to punish racing authorities which consider a new entrant via its own media rights.

The suggestion is not inconceivable given Attenborough threatened to pull Tabcorp’s services from New South Wales clubs if they signed a digital wagering deal with CrownBet.

The Tribunal, lead by Judge John Middleton, has heard an array of submissions from both supporters and critics of the deal, with new information uncovered in recent days.

The documents, submitted by counsel for the Australian Competition and Consumer Commission (ACCC), revealed Tabcorp as a merged entity could end up charging punters more on weekends in a strategy called Project Alfred.

The ACCC has not been beneficial to Tabcorp’s case, which is not surprising given the issues raised when the deal had initially gone to the regulator. That was until Tabcorp ditched the informal process of going to the ACCC to go directly to the Tribunal.

The ACCC submitted a List of Issues to the Tribunal which it has referred to during the hearing. The regulator has emphasised the public detriments which could occur following the Tabcorp take over of Tatts.

Tabcorp slammed the ACCC at the beginning of the hearing, alleging the regulator was not as impartial to the case as it said it was. The Australian gambling giant added the arguments were an “artificial construct” of its rivals.

Tabcorp added its rivals were not concerned about weakened competition either, instead were more concerned about their own commercial interests.

The rivals, including CrownBet, Racing Victoria and Racing.com which were all granted leave to intervene, are hoping the ACCC formally advises the Tribunal to dismiss the merger in its closing submission tomorrow.

Still, opponents of the deal are not going to leave the fate of the gambling industry up to the Tribunal, which will determine if the deal gets the green light in coming weeks. Racing.com just announced several new wagering partnerships with CrownBet, Sportsbet and Bet365.

The online bookmakers will partner with the racing resource for two-years via the integration of Racing Victoria’s thoroughbred racing coverage.

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