Gambling operator William Hill argued that the proposed £2.3-billion merger of rival companies Ladbrokes and the Coral Group would not be good for the industry as it would harm competition even if the combined entity agrees to close some of its betting shops.
William Hill said in a filing to the UK Competition and Markets Authority, which is currently reviewing the deal between UK’s second- and third-largest providers of sports betting options, that such a merger should not take place for exactly the same reasons it was prevented from being completed in 1998. Back then, a proposed tie-up between the same operators collapsed, with officials warning that it would be disastrous for competition within the sector.
William Hill further added in its submission that it is important for regulators to take into consideration the fact that the sports betting market has not changed significantly over the past 18 years. There were a total of 8,983 betting shops across the UK in 1998 compared to 8,958 such shops in 2015. In addition, smaller betting operators have been closed or acquired by larger ones, which resulted in the market being much more concentrated than it was back then.
Ladbrokes and Coral announced their merger in July 2015. As mentioned above, the deal is currently being investigated by the Competition and Markets Authority and if given the green light, it is expected to be completed sometime in the first half of the year. If a merger eventually takes place, the combined entity would displace William Hill as UK’s biggest operator of betting shops. Ladbrokes Coral, as the merged company will be called, would run 4,000 sites across the country.
Many believe that the two gambling companies will be asked to sell about 400 betting shops to alleviate rivals’ worries about the potential damage of competition. However, William Hill told regulators that such disposals would not do any good and the only thing that would help would be the deal’s termination.
Ladbrokes and Coral have argued that the betting landscape has been transformed over the years by the constantly growing online gambling market and that it is necessary for the proposed tie-up to take place. Rival William Hill, however, contended that Internet gambling would not constrain Ladbrokes Coral sufficiently to eliminate or at least mitigate the loss of competition that would result from the merger.
