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William Hill Warning about Ladbrokes-Coral Merger
Thursday, February 18, 2016 : U.K. BETTING GIANT WARNS ON LADBROKES-CORAL MERGER (Update)
Rival William Hill claims the merged company poses a threat to the bookmaking industry.
The GBP 2.3 million merger between bookmaking groups Ladbrokes and Coral was the subject of a complaint to the competitions regulator this week by rival William Hill plc, which warned that the enlarged company poses a threat to the market.
Reporting on the complaint, The Telegraph newspaper said that William Hill is concerned that the merger will harm competition in the industry, even if Ladbrokes and Coral agree to sell off significant numbers of betting shops.
In its submission to the Competition and Markets Authority, William Hill recommended that Ladbrokes and Coral be barred from a tie-up for the same reasons they were blocked from merging eighteen years ago, when a first attempt to combine the two major betting groups was nixed by the Labour government of the day on grounds that it would be anti-competitive.
“It is important to recognise that the structure of the market has changed relatively little since 1998,” William Hill said, adding that there were 8,983 betting shops in Britain then, compared with 8,958 last year.
“To the extent that the market has changed, those changes reinforce the concerns set out in 1998,” William Hill opined, adding that the market is already significantly more concentrated than it was before.
The submission comes at a time when the Competition and Markets Authority is investigating the merger proposed by the two gambling companies and agreed between them last July.
William Hill has a competitive concern; if the merger goes ahead Ladbrokes-Coral will unseat William Hill as the biggest bookmaking firm in the UK.
The Telegraph notes that Ladbrokes-Coral claims that the rise of Internet gambling, not foreseen as such a powerful force back in 1998, has transformed the betting landscape and creates the space for the partnership to be approved.
However, this is an argument with which William Hill disagrees, saying it will not "significantly mitigate the loss of competition resulting from the merger”
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