The James Packer-backed online bookmaker CrownBet has dumped a long-running legal bid to thwart the $11 billion mega-merger of Australia’s two biggest gambling companies, Tabcorp and Tatts.
Tabcorp on Thursday revealed it had struck an agreement with CrownBet under which the digital bookmaker would withdraw its opposition to the mega-merger in the Australian Competition Tribunal in exchange for CrownBet customers being able to stream Tabcorp’s Sky Racing vision.
The development clears an important hurdle for the highly anticipated tie-up, which has been dogged by legal setbacks and delays for months. Tatts shareholders are scheduled to vote on the merger proposal in two weeks’ time.
CrownBet, 62 per cent owned by the ASX-listed Crown Resorts, and the national consumer watchdog have been challenging the Tabcorp-Tatts merger due to the immense market power that the merged entity would command, and concerns over the subsequent lessening of competition in the wagering industry.
The merger would create an $11 billion gaming behemoth encompassing Tatts lotteries, digital betting services and totalisator betting licences in every state and territory except Western Australia.
Challenges in the Federal Court recently forced the merger proposal to be sent back to the competition tribunal for review, but it was again given the green light earlier this month.
The companies hope to have the deal sealed before the end of the year.
In a statement on Thursday, CrownBet said its competition concerns had since been “sufficiently addressed” by an arrangement it had reached with Tabcorp and Sky in relation to the streaming of racing vision to CrownBet customers.
“CrownBet no longer opposes the merger of Tabcorp and Tatts and will not interfere in any way with the implementation of the merger,” a CrownBet spokesman said.
Tabcorp told the stock market it had agreed to supply a digital stream of SKY1 and SKY2 to CrownBet for the personal use of its Australian wagering customers on mobile and desktop computer devices.
One of the main objections to the Tabcorp-Tatts tie-up centred on Tabcorp’s racing broadcast business, Sky Racing, which competitors feared could inflate the merged company’s power.
The Australian Competition and Consumer Commission has until December 20 to launch another appeal of the competition tribunal’s approval of the merger, but it is yet to indicate whether it intends to do so.
Also on Thursday, CrownBet agreed not to launch any further proceedings in the NSW Supreme Court seeking a declaration that it was legally able to offer digital wagering services at up to 1200 licensed clubs after winning a tender process.
Tabcorp, which holds exclusives licences to run physical retail betting outlets in pubs and clubs, claimed clubs could be in breach of the Unlawful Gambling Act if they accepted the CrownBet partnership.
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