An $11 billion merger of Australia's two biggest gambling companies would have no negative impact on the wagering sector and may even increase competition, a Federal Court judge has ruled.
The Australian Competition Tribunal on Wednesday released the reasons behind its divisive decision to clear the proposed mega-merger of Tabcorp and Tatts Group for a second time, after its initial approval was successfully appealed by the competition watchdog and sent back for review.
Tribunal president Justice John Middleton rejected the arguments raised by rival betting operators and the Australian Competition and Consumer Commission (ACCC) that he had made "reviewable errors" when assessing the detriments of creating a merged gaming behemoth.
"The merged entity will be a more effective competitor and the merger is likely to lead to greater competition, particularly in online wagering," he said.
"This increased competition brings about competition benefits to the racing industry and to consumers."
Justice Middleton also remarked that the proposed merger was "consistent with the trend towards industry consolidation", and said the objections of the ACCC and CrownBet were "immaterial".
"The objections raised by the ACCC (and the interveners) become immaterial once it is appreciated that there are no material detriments, and that the proposed merger is likely to encourage competition," Justice Middleton said.
CrownBet, which was one of the parties to challenge the approval of the merger, last week signalled it may consider a further appeal.???
"CrownBet will review the Tribunal's decision and consider all of our options," a spokesman said last week.
Tatts shareholders are due to vote on the proposed merger on Thursday next week.
But Tatts, in an announcement to the stock market last week, signalled that the vote was once again at risk of facing further delays.
"It is possible that this might impact the timing of the scheme meeting," the company said, "but this cannot be determined at this time."???
???The planned merger of the two Australians gaming companies has faced setbacks and delays after the Full Federal Court earlier this year found Justice Middleton's original decision to approve the deal in June was potentially flawed and must be set aside.
The full federal court sided with the ACCC's claim that the tribunal's oriinal decision had wrongly overlooked concerns surrounding the immense market power that the merged Tabcorp-Tatts entity would command, and the subsequent lessening of competition.
In his reasons released on Thursday, Justice Middleton insisted he was satisfied that the proposed merger was likely to result in "such a benefit to the public that the acquisition should be allowed to occur."
Tabcorp and Tatts anticipate the proposed merger will make them strong enough to expand globally, compete with international bookmakers and bid for wagering and lotteries licences overseas.
Except for Racing Victoria, every racing state in Australia has supported the merger, saying it could lead to a national TAB and turn Australia into one of the most profitable jurisdictions in the world. Supporters of the merger also said it could realise an extra $50 million a year for the racing industry.
