The UK’s watchdog, the Competitions and Market Authority (CMA) looks like it may require Gala Coral and Ladbrokes to sell up to 1,000 of their retail betting shops prior to their merger. It has delayed its provisional ruling which was expected by Monday, April 18, with many speculating that the disposal of betting shops has been the cause for the delay.
Ladbrokes initially announced the merger discussions with Gala Coral in July last year and the final ruling on the merger from the CMA is expected to be received by June 24. Despite the delays to the provisional ruling, the date for the final ruling is not expected to change.
The CMA is concerned with the level of competition that will be available following the merger. Gala Coral and Ladbrokes, together, own 4,000 betting shops, which will give them significantly more than William Hill with its almost 2,400 shops and will provide it with potential net revenues of £2.1 billion.
For this reason, the CMA is insisting that Gala Coral and Ladbrokes sell their betting shops to smaller operators, rather than simply closing them down. In addition, they will specify the exact shops that must be sold. The companies had originally planned to sell between 300 and 500 of their betting shops, but the additional sales, which will bring the number up to around 1,000, will help to maintain the competition that currently exists in the industry.
This merger of betting companies follows the merger of Paddy Power and Betfair which was first announced in September 2015 and was finalised in February 2016 to create the largest listed online gambling company in the world.