The Ladbrokes – Coral merger has faced yet another hurdle. British Horseracing Association filed a submission to the UK Competition & Markets Authority and stated that the merger could have a negative impact on the preferences of the UK consumers as far as horse racing and greyhounds are concerned.
The submission was sent by Nick Rust, the current CEO of the British Horseracing Association and former Managing Director of the Retail Operations department at Ladbrokes.
The members of the Association expressed their concerns that the merger is to cause “deterioration” in customer odds. The BHA is also about to introduce concerns over the rights of the racing media and the financial difficulties the smaller racecourses are going to encounter and their eventual closure once the merger is completed.
One of the solutions proposed by BHA is a fee scheme to be imposed. The Ladbrokes-Coral enterprise will be required to pay a levy, depending on the revenue generated through online horseracing bets. The levy should come into force prior to the proposed replacement system that is to be introduced in April 2017.
The Competition and Markets Authority is currently investigating the merger, although it was expected to announce its final decision no later than June 24th. However, the deadline was extended to August 19th. The Authority members are scrutinising the advantages and disadvantages the combined retail portfolio of the two entities would bring. In order to materialize the merger, Coral and Ladbrokes might have to close about 400 betting shops.
It has been a year since the deal about the £2.3 billion merger was signed. It was expected to be finalized by the first half of 2016, but various setbacks, including the BHA submission, caused delays.
Back in the 90’s, when he used to work for Coral and Ladbrokes, Mr. Rust also made an attempt to merge. Now, he is in charge of the BHA but nevertheless, he is not completely against the merger. Yet, he expressed the concerns the BHA had that the investigation carried out by CMA was not as precise as necessary and the merger is to have much greater impact on the racing industry than initially proposed. Mr. Rust also added that if the government gives the nod to the proposed levy, it would be beneficial to racing and betting industries and the economy as a whole.
