CrownBet chips in to stall merger
Townsville ONLINE betting company CrownBet has joined the consumer watchdog in calling for a judicial review of the Australian Competition Tribunal’s approval for the proposed mega- merger of Tabcorp and Tatts.
Tabcorp revealed in a statement to the stock exchange yesterday that CrownBet – majority- owned by James Packer’s casino operator, Crown Resorts – had lodged an application for a judicial review.
It follows the Australian Competition and Consumer Commission’s application to the Federal Court this week for a judicial review of the tribunal’s consent for the merger.
Announcing its review on Monday, the ACCC said it believed the tri- bunal had made errors in reaching its decision.
Tabcorp has already said it will oppose the ACCC’s application and that Tabcorp and Tatts remained committed to their proposed $ 11 billion merger.
In a statement yesterday, Tabcorp confirmed it would “also oppose the CrownBet application and will pursue an expedited hearing of the matter”.
The ACCC claims the tribunal made errors that are fundamental to the case and to future merger assessments.
Tabcorp initially sought informal merger clearance from the ACCC but, shortly after the watchdog published a statement of issues in March, withdrew the application and instead lodged an application for authoris- ation with the Australian Competition Tribunal.
The ACCC and Australian Competition Tribunal apply different tests when assessing a merger.
While the ACCC considers if there will be a substantial lessening of competition, the tribunal can authorise a merger if the public benefits outweigh the public detriments.
The tribunal granted authorisation for the Tatts- Tabcorp merger last month, saying that the merger would create substantial public benefits.
Separately yesterday, an analyst at investment bank Citi said Crown Resorts and rival casino group The Star could save up to $ 100 million a year by merging. Running the ruler over the value of “hypothetical” tie- up, Citi analyst a Rohan Sundram said he believed there was strategic merit in the concept.
There were key positives for both groups through a bigger market share and operational scale, along with opportunities to share costs and combine loyalty offerings.
“Through its expanded scale across Australia, we estimate that a combined Crown and Star would increase its share to around 86 per cent of domestic mass market revenue and 90 per cent of ( high- stakes gambling) revenue among the major casino operators,” Mr Sundram said.
“We believe the combined group could potentially offer more compelling loyalty reward offerings to customers across their various properties nationally.”