Australian betting company Tabcorp has reportedly rejected a proposal from gambling giant Ladbrokes for a potential joint venture which would have created Australia’s largest bookmaker. Reportedly, talks on the matter started in late 2013.
The UK-based company was looking for means to enter the Australian online gambling market and to leapfrog rivals that had introduced their services in that particular market much earlier. And Ladbrokes considered combining operations with those of Tabcorp as the best possible way to achieve its goal.
However, local media reported that Tabcorp Chief Executive Officer David Attenborough did not take long before rejecting the proposal. By the time that happened, the operator was already holding the biggest share in Australia’s online gambling market.
Over the past several years, Australia has turned into one of the most competitive and dynamic gambling markets in the world. Following the failed deal, Tabcorp saw its share of Internet gambling revenue in Australia drop from 30% to 25%. As for Ladbrokes, it currently holds a 7.5% market share there.
The UK-based gambling operator made its first attempt to enter the Australian gambling market in 2011, when there were ongoing talks to buy Sportingbet. However, the deal never got completed. The company later on entered Australia through its purchase of Gaming Investments for about A$22.5 million. In 2013, the company revealed that it was highly unlikely for it to grow Australia’s A$13-billion Internet gambling market.
Last year, Ladbrokes announced its merger with rival UK-based operator Gala Coral. The deal is expected to be completed later this year. Valued at £2.3 billion, the combined business would represent UK’s biggest betting shop chain.
Tabcorp was also in talks for a potential merger with rival Tatts Group. After gambling powerhouses such as William Hill, Paddy Power, and Ladbrokes had entered the local gambling market, the two companies considered it a good idea to discuss a possible consolidation for increasing their market share.
Although the proposed merger was eventually scuttled in November 2015, a combined business would have had a market capitalization of at least A$9 billion and would have generated annual synergies of A$100 million. Due to this, many gambling experts believe that discussions on the matter would be renewed in 2016.
