Deadline for Tabcorp-Tatts verdict pushed back to September

THE $11 billion decision to approve the merger between Tabcorp and Tatts has been pushed back until September 10, 2017.

The Australian Competition Tribunal has been given the substantial task of deciding whether or not the tie-up between Australia’s two biggest retail gambling companies will weaken the industry.

The Tribunal held a 14-day hearing where both backers and critics submitted evidence to support their views, with the Australian Competition and Consumer Commission (ACCC) strongly advising against the Tabcorp-Tatts merger.

The three-man Tribunal, headed by Federal Court judge John Middleton, was expected to hand down its decision by June 13, but as many insiders suggested, the deadline has been pushed back.

While the new date has given the Tribunal almost three months to prepare a decision, interested parties are suggesting the verdict may be delivered as soon as June 20. The reason behind such a lengthy deadline has been put down to the fact the Tribunal can only make one extension, so it has opted for the maximum period.

The ACCC would have handed down its decision on May 4, if Tabcorp had not proceeded straight to the Tribunal in March, ignoring the list of concerns presented by the media watchdog.

Insiders have suggested the deal would have likely received the green light from the ACCC had Tabcorp stuck with the informal process, but because of its impatience, many believe the company opened up the deal to be heavily scrutinised by opponents.

Tabcorp’s choice to bypass the watchdog could also be the reason why the ACCC has criticised the Tatts takeover so strongly, telling the Tribunal the public benefits of the deal do not trump the competition concerns.

The extension is worrying for Tabcorp and Tatts – if the Tribunal was going to approve the deal it could have done so today, or by the initial Tuesday deadline instead of setting a new date.

This can only mean the Tribunal is taking into account the advice from the ACCC, as well as the evidence presented by rivals including CrownBet and Racing.com, or it is considering the conditions suggested by ACCC in its closing arguments.

One condition includes unbundling Sky Racing and Tabcorp – the services exist separately instead of a package, while Tabcorp still owns the broadcasting service. The condition has been suggested to prevent Tabcorp using Sky vision as leverage over pubs and clubs.

As a merged entity Tabcorp and Tatts would have extra power to stop supplying these venues with Sky if they signed on with an alternative media company.

CrownBet is one alternative company which has already proposed a deal with ClubsNSW. The deal resulted in exactly what rivals are concerned about, with Tabcorp’s CEO David Attenborough writing to the club owners threatening to pull its services if they sign on with CrownBet. The merged entity would likely have the power to follow through with the threat too.

The deal will see clubs earning commission for every punter who signs up via the app at a participating NSW venue. While Tabcorp has said the corporate bookmaker has breached its license, CrownBet is currently in court seeking a declaration saying otherwise.

The Tribunal is likely taking all this activity under consideration and may force an unbundling of vision services for the deal to go ahead, or it may require exclusion vision deals to be ceased in order to give bookmakers access to pubs and clubs with the vision.

There are also rumours Tabcorp may have to sell its Sky Racing broadcasting service altogether in order to get the green light.

Whether this is just a rumour will no doubt be revealed in the coming weeks or months as the Tribunal makes a decision.