The merger between two of Australia’s largest gambling companies, Tabcorp and Tatts, has found itself in serious jeopardy. The Tabcorp-Tatts merger has been on the cards for a long time, but a recent ruling by a federal court could see the merger fall through.
Federal Court Orders Review of Tabcorp-Tatts Merger
The federal court decided not to approve the AU$11 billion merger between the two massive gambling firms. Instead, it decided that the matter should be referred back to the Australian Competition Tribunal (ACT) for consideration. While this doesn’t mean the merger is off completely, it is a massive setback. The two companies were hoping that the Tabcorp-Tatts merger would be completed during the closing months of 2017
The Tabcorp-Tatts merger has been in the news for some time, especially since it took an unusual legal path to get the merger approved. The two firms decided to bypass the ACCC and head straight for the ACT. The ACT Is normally a last resort, used when the ACCC has already turned down a proposed merger.
Tabcorp-Tatts Merger Down, But Not Out
The gambling industry in Australia has largely supported the merger. However, there have been some that have objected to it. These included the state of Victoria and Aussie bookmakers, such as Crownbet and Sportsbet. It was argued that the Tabcorp-Tatts merger would hurt competition in the gambling industry.
Things were looking good for the merger back in July 2017, when the ACT approved the merger. However, the ACCC immediately challenged the ruling, saying here were reviewable errors. Crownbet also requested a review of the ACT’s decision, so it is very pleased that the federal court has made the ruling.
This means that the merger is essentially back to square one. It may still happen, but its future is uncertain. Some experts believe that the merger may ultimately be allowed to continue, provided certain conditions are met. These conditions could include Tabcorp-Tatts having to sell off some of their assets to the competition. This would decrease their market dominance once the merger goes through.