Tabcorp deal to impact gambling industry irrespective of outcome
The wagering sector will be significantly revamped in the coming weeks as hearings commence for the Tabcorp and Tatts merger.
Tabcorp bypassed the Australian Competition and Consumer Commission (ACCC) and went straight to the Australian Competition Tribunal earlier this year. The Tribunal has since called for submissions on how the deal will impact the gambling industry from relevant parties in the past few months.
Now the Tribunal will compile the submissions, witness statements, and other documents and consider them along with 14 days of hearings regarding the $11 billion merger.
Tabcorp has slammed the ACCC, as it believes the competition watchdog is siding with the three parties, including CrownBet, Racing Victoria, and Racing.com during a hearings direction last week.
The corporate bookmaker, along with the racing code and broadcaster all lodged applications to intervene to the Tribunal – which were successful.
Tabcorp’s senior counsel, Cameron Moore, said the objections were based on their own commercial interests. He said the Tribunal should ignore their bias evidence and consider the deal on public benefit grounds.
He added the ACCC was on the side of the three objecting parties.
“It is clear that there are two camps – the Tabcorp/Tatts camp, and the ACCC/adverse interveners camp,” Mr Moore said.
The hearings begin tomorrow, May 16, where Tabcorp will indicate the widespread support the deal has received from racing administrators and pubs and clubs around Australia.
While the Australian Hotels Association (AHA) has submitted support of the merger to the Tribunal, ClubsNSW has spoken out against the deal.
This is due to the latter organisation teaming up with James Packer’s online branch, CrownBet, with Tabcorp lashing out as a result.
AHA NSW also teamed up with Tabcorp proving there are more divisions in the industry than previously thought.
The Tribunal will determine on June 13 whether the merger will be approved with both outcomes resulting in significant changes to the wagering industry.
If the deal is approved, the merged gambling entity will rule over betting shops around the nation, excluding Western Australia, and have a huge internet wagering present which will impede corporate bookmakers.
The latter companies are already worried due to new laws including a ban on lines of credit, the restriction of gambling advertisements on television, and a proposed point-of-consumption tax.
This could result in acquisitions and mergers of corporate bookies and of course weakened competition.
The future of the joint venture between Seven West Media and Racing Victoria, Racing.com, which broadcasts Victorian racing on free-to-air television may also be impacted by the super entity.
Tabcorp is going to fight hard for Tatts with the opening submission statement arguing “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.”
“Such concerns are wholly irrelevant to the task of tribunal and ought properly be disregarded.
“Tellingly, the supposed victims of the theorised anti-competitive effects do not agree that they will be adversely affected.
“Instead, they are supportive of the merger, and in many cases expressly reject the logic by which the putative harm is speculated.
“It is difficult to imagine more powerful evidence that the ACCC’s theories are not connected to reality.
“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 three opposing parties will argue the deal will lessen competition and that it has little public benefit. The corporate bookmaker and Racing.com will detail the disadvantages including bidding for digital and television rights.
Tabcorp will oppose these arguments suggesting that “representatives of both Sportsbet and Ladbrokes will give evidence before the tribunal of their desires to acquire state and territory wagering licenses.”
It will also counter Racing.com’s argument that the merged entity will use its joint ventures to get exclusive, broadcast deals by claiming Tatts has never wanted to acquire broadcast rights so there will be no competition for vision.
“It must be emphasised that the tribunal’s task is not to entertain highly elaborate and speculative theories of harm, but rather to focus only upon detriments that have some real chance of occurring,” the submission says.
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