CrownBet chips in to stall merger

Townsville Bulletin - - NEWS - TREVOR CHAPPELL

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.”

REVIEW CALL: The flame tow­ers at the new Crown Casino shoot their foun­tains of light into the night.


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