Ladbrokes Coral Merger Raises Concerns About Competition in UK Betting Market

Nick Rust, the top dog at the British Horseracing Authority (BHA), has expressed his worries to the Competition and Markets Authority (CMA) regarding the possible consequences of the Ladbrokes and Coral union on, surprise, surprise, horse racing!

The CMA has been investigating this agreement since December, and in May they made a shocking announcement: Ladbrokes and Coral might need to offload a massive 350 to 400 locations for the merger to receive approval. The reason? The CMA believes the combination could hinder competition in nearly 660 regions.

Rust, in a message to Martin Cave (the head honcho at the CMA’s investigation), essentially stated, “Slow down! We’re concerned that you’re not adequately considering how this merger could affect horse racing, particularly since betting shops remain significant to us.” He also threw in a jab, mentioning that the BHA hadn’t received any updates from the CMA since February and that they were unhappy with the limited opportunity provided to others for feedback.

Rust’s primary concern? Even with the sale of 400 shops, the combined betting giant would still command a substantial portion – over 40% – of betting shops in the UK.

Should William Hill’s attempt to purchase these establishments collapse, it could result in a duopoly controlling 65-70% of Britain’s wagering outlets.

Recalling the two corporations’ prior merger endeavor in 1998, which was thwarted by the Monopolies and Mergers Commission (MMC), Rose remarked: “The 1998 assessment indicated that a unified Ladbrokes-Coral would have represented 30.5% of betting locations, yet even with the proposed divestitures, the consolidated entity would still constitute 40-45%. The two leading operators combined would hold roughly 70% of the market, whereas in 1998, the MMC deemed a 60% market dominance ‘unacceptable’ due to its potential harm to pricing rivalry for racing and patrons.”

Rose, whose career encompasses various roles at both Ladbrokes and Gala Coral, including Commercial Head of Ladbrokes from 1987 to 2002, Retail Managing Director at Gala Coral from 2007 to 2009, and a return to Ladbrokes as Retail Managing Director prior to joining the BHA in January 2015.

Previously, in June, William Hill released a declaration criticizing several facets of the CMA’s inquiry into betting shop competitiveness.

Seventy-two hours ago, Paddy Power Betfair published a reaction to the notification of potential solutions, in which the operator emphasized its apprehensions that ‘any remedy entailing divestments faces a significant chance of being unsuccessful.

In a communication shared with Gambling Insider, Ladbrokes highlighted that the feedback from involved entities constitutes a vital step in the Competition and Markets Authority’s (CMA) current inquiry. They reiterated their dedication to working closely with the CMA, while upholding a practice of abstaining from public remarks on the particulars of submissions presented by other participants.

Coral declined to offer a statement.