Tabcorp has last attempt at getting approval for Tatts merger

In a final attempt to sway the Australian Competition Tribunal, Tabcorp has claimed it is being “out-competed”

As the 14-day hearing of the Tabcorp and Tatts merger comes to an end, closing submissions have sought to sway to the Tribunal.

Tabcorp, which is fighting for the right to acquire Tatts for $11 billion, is now on the defence – it was originally quite vocal about the public benefits of the merged entity. The Australian Competition and Consumer Commission (ACCC) has said these benefits were overstated.

But in a last attempt to encourage the Tribunal to ignore this view, Tabcorp’s legal counsel, Cameron Moore SC, said while Tabcorp has recorded some growth in its online business, it does not get the same competitive advantages as corporate bookmakers.

“We are competing head-to-head with those people who have very significant scale, very significant abilities and it’s a very competitive space, indeed,” Moore said.

“As the figures show, we’re not winning that battle.

“They are growing faster, they are growing stronger and we are being out-competed.”

Tabcorp was first on the list of closing submissions with the ACCC up today – it is expected the regulator will warn the Tribunal, which is headed by Justice John Middleton, against approving the deal.

During the three-week hearing, Tabcorp has alleged the ACCC is not as impartial as it initially said it was and is siding with the opponents of the deal, including CrownBet, Racing.com and Racing Victoria.

The opponents’ closing submissions are expected today.

The main argument by the opponents is the merged entity will have combined monopoly over every state and territory in Australia – except Western Australia – which will weaken competition.

But Moore argued the online sector was incredibly competitive.

“It’s characterised by the relentless rise of online corporate bookmakers, who have out-competed Tabcorp and Tatts,” he said.

“Tabcorp and Tatts have lost market share year after year.

“What we are dealing with here is a fairly bread and butter application of online disruption, which we have seen in many industries and which we are seeing in this industry.

“A high-cost and capital-intensive bricks and mortar retailing model is struggling to respond to a rapid decline in its fortunes in the face of aggressive low-cost and online products and business models.”

Moore then reiterated Tabcorp’s argument that retail wagering was declining, stating retail racing and tote wagering was sinking at a rapid rate.

“Suggestions made by our opponents that we are winning the battle in retail and racing is false,” he said.

Concerns about the impacts on the racing industry, as well as pubs and clubs, due to the merger has been raised during the hearing, but Moore downplayed these.

“The principal racing authorities have come before this tribunal and said we reject this competitive concern raised by Racing.com and none of the hospitality and retail witnesses raised any concern,” he said.

“If there was a genuine competitive concern one would expect that the people who are going to be affected by it directly would be complaining and they’re not.”

Australian Hotels Association has shown their support for the merger after the NSW subsidiary penned a five-year deal with Tabcorp.

Moore finished Tabcorp’s closing statement noting the detrimental impacts on the two companies if the merger is not approved.

“They won’t be able to innovate, they won’t be able to compete, and they are the major funding of racing … and, I believe, prospectively going forward,” Moore said.

The Tribunal will release its decision in the coming weeks.