Tabcorp attacks “captive” ACCC after merger deal hits a roadblock

TABCORP’S proposed $11 billion deal to join forces alongside the Tatts Group has again been put on the back-burner after the gambling giant tried unsuccessfully to get the Australian Competition Tribunal to ignore evidence presented by the deal’s objectors.

Bookmaker Crownbet, alongside Racing Victoria and broadcaster Racing.com lodged applications to block the merger, which Tabcorp senior counsel Cameron Moore believes is an act of self-interest from all parties.

Moore also went on to accuse the Australian Competition and Consumer Commission of being in the same “camp” as the three parties objecting to the deal at a hearings direction that took place in Federal Court in Melbourne on Thursday.

The hearings direction precedes a two weeks of hearing before a tribunal next week.

“It is clear that there are two camps – the Tabcorp/Tatts camp, and the ACCC/adverse interveners camp,” Mr Moore said.

The ACCC said in its own report that the public benefits that Tabcorp claimed would materialise after the merger were “overstated” and that the deal would stifle the competition for wagering licenses and broadcasting rights.

Tabcorp slammed those findings, claiming the tribunal to be “incompetent”.

“It is difficult to imagine more powerful evidence that the ACCC’s theories are not connected to reality,” Tabcorp said after listing the supporters of the deal.

“The tribunal would be very slow indeed to conclude that all of these people do not know their industry, or are incompetent or confused.”

The company went on to accuse the opponents of the deal acting solely out of self-interest.

“It is apparent that some industry participants are dissatisfied with various aspects of the way in which aspects of the industry operate today and seek to enlist the tribunal to effect changes in their commercial interests,” Tabcorp said.

“Such concerns are wholly irrelevant to the task of tribunal and ought properly be disregarded.”

Racing Victoria’s objection centres around its concern that a merger would mean Tabcorp would almost certainly be the sole bidder for the next exclusive wagering licence in Victoria, meaning they would lose out finically.

CrownBet and Racing.com have lodged concerns about the market power Tabcorp’s Sky Racing broadcast service could have should the merger eventuate.

Sportsbet.com.au CEO Cormac Barry said back in May that the proposed merger would allow Tabcorp to exercise a stranglehold over the industry.

“I believe the rights holder is at risk of retribution from Tabcorp and Sky during any negotiation period by Sky either not using their content for distribution, or moving the content to Sky 2 resulting in a negative impact on wagering and rights paid to the rights holder.” Barry said.

“Collectively, they will be able to exert substantial pressure against every state and territory government and racing body in Australia, except in Western Australia,”

“Even in WA they will be able to exert pressure, through Tabcorp’s pooling arrangement with the WA TAB and Sky Racing’s control of WA racing media content,” he added. “This opportunity is enhanced through Tabcorp’s use of Sky Racing to directly influence punters and drive punters to the content they specifically want the customers to bet on.”

It was not all one-way traffic on Thursday however.

Tabcorp was able to have a win after a move by the objectors to lodge a “broader information request” to gain access to information such as Tabcorp’s take-out rates on betting pools over several years was disallowed.

Tabcorp’s chief executive David Attenborough has said there is “broad-based support…for the proposed combination with Tatts” and Tabcorp believes that taking the merger to the ACT will “deliver greater transaction certainty”.

The tribunal will release its decision on the merger on June 13, after the hearings conclude with closing statements on June 2.