Major Australian gambling operators Tatts Group and Tabcorp have renewed merger talks after previous consolidation efforts had not resulted in a deal being closed. If the two companies join forces, they will create a A$9.4-billion entity that will rule Australia’s non-casino market.
Tabcorp is currently among the leading sports betting operators Down Under. The company provides land-based gambling options across several states and has an online betting business. Last year, it expanded its international presence by joining forces with UK’s News Corp, the publisher of The Sun tabloid, for the launch of a branded online betting product intended for British punters. The company was most recently valued at A$4.08 billion.
As for Tatts, it manages sports betting, gaming, and lottery divisions. In fact, its lottery business accounts for the greater portion of the revenue it generates. The company’s market cap currently stands at A$5.27 billion.
Australia has turned into a particularly attractive gambling market and has been flooded by some of the global leaders in the provision of this type of services over the past several years. Big industry names like Ladbrokes and William Hill have been among the operators that have been looking to expand their presence there by offering highly competitive online sports betting products.
With the Australian gambling market growing rapidly, it has become difficult for both Tatts and Tabcorp to keep pace with their foreign competitors. Technology changes, the rising interest in digital gambling products, and the somewhat relaxed licensing regulations in Australia have also been cited by industry experts as factors that have facilitated international operator’s entrance and establishment on the market.
Market research firm IBIS World has valued the local sports betting market at A$3.5 billion and Tabcorp and Tatts seem to be holding a commanding share for now. However, online-only operators have been growing their share. A merger between the two Australian companies may prove to be a helpful move that would keep them strong enough to blunt outside competition.
According to local media, more details on the potential merger are likely to emerge within the next several days. Both Tatts and Tabcorp have requested halts on trading due to possible change of control transaction but have not provided further information about discussions’ progress.
The two gambling operators mulled potential merger late last year but they could not agree on the terms of such a deal.
