BHA issues warning over Ladbrokes-Coral merger
CEO Nick Rust says the merger could harm the racing industry and lead to a "deterioration" of odds for customers
The British Horseracing Authority (BHA) has warned the Competition and Markets Authority (CMA) the proposed Ladbrokes-Coral merger could have a “detrimental impact” on British racing and a national loss of competition on the high street.
In a letter to the CMA, the BHA’s chief executive, Nick Rust, who left Ladbrokes at the end of 2014 and had previously worked for Gala Coral, claimed the merger between the two bookmaking giants could lead to a “deterioration” of prices, a fall in the value of media rights and the closure of smaller racecourses across the UK.
He also said objections made when a merger between Ladbrokes and Coral was proposed in 1998 were still valid and that an even greater concentration of market share would be to the detriment of both the racing industry and customers.
The submission comes after the proposed merger was recently given the provisional green light by the CMA, although this is subject to the sale of 350 to 400 high street shops after it concluded a number of local areas would find a “substantial loss of competition”.
However, Rust claims the divestment of 400 Licensed Betting Offices (LBOs) would still leave Ladbrokes Coral with a 40% market share on the high street, and a 65-70% share among the two largest UK operators.
“The proposed merger would result in a greater degree of concentration of the LBO market share between two operators in the UK retail betting market than was deemed damaging to competition by the MMC [Monopolies and Mergers Commission] in 1998,” Rust said in the letter.
“We agree with the Inquiry Group’s view that the purchaser of any divested LBOs needs to have sufficient scale nationally to be able to mitigate against the SLC [Substantial Lessening of Competition],” the letter added.
Ladbrokes currently has 2,154 betting shops in Great Britain, as well as 77 in Northern Ireland, while Coral also owns 1,850 shops in Great Britain.
“Responses from various parties are very much part of the CMA process at this stage,” a spokesperson from Ladbrokes told EGR.
“We are continuing to work closely with the CMA and our policy has been not to publicly comment on the details of any submissions made by other parties.”
Last month Gala Coral CEO Carl Leaver said in a letter to staff he expected the merger to be completed in September or October following news the companies must first sell up to 400 shops to proceed.