Australian gambling operator Tabcorp Holdings has agreed to sell a gaming machine monitoring subsidiary it purchased last summer to address the biggest of a set of concerns raised by the Australian Competition and Consumer Commission (ACCC) in relation to the proposed merger with fellow gambling company Tatts Group.
The ACCC said in a 38-page document released earlier today that if the two gambling businesses combine their operations, competition in gaming machines monitoring in Queensland will be significantly weakened. By selling Odyssey Gaming Services, a company that specializes in licensed monitoring in the Australian state of Queensland, Tabcorp will make an important step closer to finalizing the merger that will result in the creation of a A$11-billion gambling behemoth.
The operator said in a Thursday statement that talks over the sale of its subsidiary have already begun and that it will continue working closely with the ACCC to address all issues raised in a timely manner.
The competition authority listed several more concerns that, if not paid attention to, may cost Tabcorp and Tatts the necessary approval. Rod Sims, Chairman of the ACCC, told local media that all issues mentioned in the document had to do with gambling sub-markets and not with Australia’s general gambling market. The official further clarified that they are confident Tabcorp and Tatts will not cannibalize the broader gambling market and will provide enough room for competition. However, the ACCC is concerned about smaller regional markets.
One of the other major concerns raised by the regulator revolves around the way monitoring data acquired by Tatts from New South Wales gambling clubs will be used. Said clubs have been worried that when and if the merger is completed, Tabcorp may use the information to improve its own gaming monitoring business.
The merger between the two Australian operators is subject to approval from the ACCC, shareholders, and the Federal Court. The ACCC is expected to reveal whether it would support the deal on May 4. This has not been the first time that Tabcorp and Tatts have been working on a merger. The two companies had engaged in consolidation talks twice before (in 2006 and 2015), but no deal had been completed, as the involved parties had failed to reach an accord on the terms.
