The chief of UK horse racing, Nick Rust, is concerned. He’s dispatched a firm message to the Competition and Markets Authority (CMA) regarding the planned amalgamation of Ladbrokes and Coral, two of Britain’s largest wagering firms. Rust, speaking for the British Horseracing Authority (BHA), contends that the CMA hasn’t adequately assessed how this consolidation will influence horse racing, which depends significantly on betting establishments for income.
The CMA had earlier indicated that the merger could proceed if Ladbrokes and Coral consented to divest between 350 and 400 of their outlets in locations where the amalgamation would substantially diminish competition. Nevertheless, Rust highlights that even after these sales, the combined entity would still command over 40% of UK betting shops, granting them a controlling market presence. He’s essentially arguing that the CMA’s suggested remedy doesn’t adequately safeguard the interests of horse racing.
Should William Hill opt out of acquiring those wagering establishments, the leading two corporations within the UK gambling sector would command a substantial 65-70% of all physical locations.
This scenario evokes memories of the proposed amalgamation between Ladbrokes and Coral in 1998, a move ultimately thwarted by the Monopolies and Mergers Commission (MMC). At that time, the consolidated Ladbrokes-Coral entity would have held a considerably smaller market portion, roughly 30.5%. Even with the suggested divestiture of shops to placate regulatory bodies, the newly formed behemoth would still maintain a hefty 40-45% share. This translates to the two largest contenders dominating nearly 70% of the market. To provide context, back in 1998, the MMC deemed even a 60% market concentration “unfavorable” due to its potential detrimental effects on equine racing and equitable pricing for patrons.
The similarities to the 1998 circumstances are particularly noteworthy for industry stalwart, Rust, who has held various roles at both Ladbrokes and Gala Coral. His tenure includes serving as Commercial Director at Ladbrokes from 1987 to 2002, Managing Director of Retail Betting at Gala Coral from 2007 to 2009, and subsequently returning to Ladbrokes as Retail Managing Director before joining the BHA in January 2015.
This entire predicament has generated widespread anxiety, particularly following William Hill’s public censure of several facets of the CMA’s inquiry into betting shop competitiveness in June. A mere three days prior, Paddy Power Betfair also articulated their apprehensions, asserting that any endeavor to rectify the issue by simply mandating the disposal of certain shops is likely to be unsuccessful.
In a communication provided to Gambling Insider, Ladbrokes stressed the significance of feedback collection as a vital element of the Competition and Markets Authority’s current phase. The company reiterated its dedication to collaborating closely with the CMA and maintained its stance of refraining from public commentary on particular submissions made by other entities.
Gala Coral opted not to provide a statement on the subject.