Australian gambling operator Tabcorp Holdings Ltd. today announced that it has submitted an application to the Australian Competition Tribunal asking for the necessary permission to proceed with its proposed merger with fellow company Tatts Group Ltd.
It became clear last week that Tabcorp would have to sell a gaming machine monitoring subsidiary it had acquired last summer to comply with recommendations posed by the Australian Competition and Consumer Commission (ACCC). The commission said in a 38-page review of the proposed combination that competition in the state of Queensland would be reduced significantly, if the gambling operator did not sell its monitoring business.
The Australian Competition Tribunal will now have the responsible task to weigh the benefits of what would be an A$11-billion merger against the possible detriments to competition. On the other hand, the ACCC review aimed to assess only whether the merger would weaken competition in the regions where the combined entity would be operating.
Tabcorp said in a press release from earlier today that it has supported and would support its filing to the Competition Tribunal with important evidence from industry insiders and experts. The company further noted it believes the combined operations with Tatts would bring numerous benefits to the local gambling industry, as well as to the racing industry, gambling customers, stakeholders, and the wider public.
Submitting the Tribunal application, Tabcorp has withdrawn its application for transaction clearance by the ACCC. The commission was expected to announce its decision on whether it would back the merger on May 4. The operator said in today’s release that an approval from the Competition Tribunal would provide grater certainty over the transaction’s completion than an informal green light from the commission. Yet, it pointed out that it would consider the recommendations provided in the ACCC’s 38-page statement of issues.
Giving more weight to the importance of the proposed deal, Tabcorp explained that the merger would benefit significantly the country’s racing industry. According to financial information provided by the operator, Tabcorp and Tatts have generated more than A$1 billion for racing in the 2016 financial year. What is more, the two companies have contributed over A$200 million in betting taxes to state governments. As a combined entity, the two operators have pledged to address issues related to the widespread decline of pari-mutuel betting.