How will the Tatts-Tabcorp merger affect punters & bookies?

A NEW gaming and wagering mega-power is about to be born.

On Tuesday morning, the Australian Competition Tribunal (ACT) gave the green light for the proposed $11 billion merger of rival gambling giants Tabcorp and the Tatts Group.

Dismissing concerns raised by online bookmakers and the Australian Competition and Consumer Commission (ACCC), Justice John Middleton approved the deal on condition that Tabcorp makes good on its promise to sell the company’s Queensland-based Odyssey Gaming business.

“As the Tribunal is satisfied that the proposed is likely to result in substantial public benefits and that the public detriments identified by the ACCC and the interveners are unlikely to either arise or are not of significance, the Tribunal is satisfied in all the circumstance that the proposed merger would result, or would be likely to result, in such a benefit to the public that the acquisition would be allowed to occur,” read the official statement from Justice Middleton.

With that ruling comes the end of a saga that has dragged on since plans for a Tatts-Tabcorp merger were first announced in October 2016.

While there is some housekeeping to be done before the deal is made official, it is all but a formality.

Now bookmakers and gamblers alike must hope the ACT is proved right in suggesting the ACCC’s many issues with the merger were “not of significance”.

At the core of the case presented by Tatts and Tabcorp representatives was the notion that a coupling of the two wagering superpowers would benefit the Australian racing industry as a whole.

Some have pointed out that it could also pave the way for current state-based totalisators to be combined into a single, nationwide betting pool.

Tatts and Tabcorp Merger given green light… national Tote finally?? #?

— Tim Guille (@timbguille) 20 June 2017

Yet there are plenty in the racing and sports wagering game who believe a ‘Tattscorp’ monopoly will do much more harm than good.

Allied with the ACCC in opposition of the deal were heavy hitters such as Racing Victoria, Racing.com and CrownBet.com.au, all of which fear an end to any reasonable competition within the industry.

Pooled resources will give Tatts and Tabcorp unprecedented reach into all corners of the Australian wagering market, especially where broadcast rights are concerned.

But the ACCC’s central issue was that claims of a $130 million revenue boost to the racing industry were hyperbolic, if not downright fanciful.

Indeed, the ACT decision comes as state racing bodies prepare for a significant decline in revenue going forward.

Figures from the recent New South Wales budget report predicted a massive 42 per cent plunge in annual takings from the state’s racing activities between now and 2021.

That follows a slump of $22 million since the conclusion of the 2015-16 financial year.

As Tabcorp/Tatts merge, NSW predicts racing revenue:

2015-16: $134m
2016-17: $112m
2017-18: $111m
2018-19: $99m
2019-20: $87m
2020-21: $65m

— Stephen Mayne (@MayneReport) 20 June 2017

But what about the consumers?

With the possible exception of a national tote, there are not many signs pointing to an improvement in circumstances for Australian gamblers.

The merger will only strengthen Tatts’ and Tabcorp’s stranglehold on parimutuel betting, so it will be interesting to see what effect – if any – that has on pricing and market diversity for greyhound and horse racing markets.

It could also have an impact on the development of the Global Tote, although TopBetta’s revolutionary universal betting pool is set for a significant cash injection over the next 12 months.

Neither Tatts nor Tabcorp has made big strides in online sports betting as yet, but their powers combined could provide a strong platform from which to attack the thriving corporate bookies.

There are also some gaps in recent amendments to the Interactive Gambling Act that could, in theory, allow for live in-play wagering via online betting interfaces or mobile devices within land-based betting shops.

In essence: when the merger goes through, Tatts-Tabcorp will have most of the tools and conditions required to plot a national monopolisation of the Australian gambling industry.

Whether the new mega-firm succeeds is another matter entirely, but the outlook is not especially promising for bookies, punters, or the business as a whole.