Tabcorp could be taken over by a giant of the UK betting industry if a reported deal goes ahead.
The newly-formed Ladbrokes Coral is apparently in talks to take over the Aussie betting firm in a deal worth £2 billion (AUD3.3 billion).
Ladbrokes and Coral are two of the UK’s biggest and oldest gambling firms, with interests stretching across sportsbooks, casino and poker.
With ink a new £2.4 billion (AUD4 billion) tie-up between the two still drying, the firm is keen to continue its momentum with a Tabcorp bid.
Ladbrokes may also have been spooked by a prospective merger plan between Tabcorp and lottery giant, Tatts Group. Any such merger would probably put the kibosh on any Ladbrokes hopes.
Gaming Firms Look To Consolidate
The last few years have seen a raft of mergers and acquisitions in the gaming industry as regulatory uncertainty and tax hikes begin to bite abroad.
Aussie pokies giant, Aristocrat, completed a move into the US with the buy-out of Video Gaming Technologies in 2014 which increased its foothold in America.
Similarly, Aristocrat’s pokies rival Ainsworth also upped the ante Stateside by buying out software firm Nova Technologies in a deal worth AUD53.5 million.
Gaming companies are keen to partner up to cover all areas of expertise. Irish sportsbook and casino giant Paddy Power have merged with online exchange Betfair, and now Ladbrokes have merged with big rival Coral.
Another UK gambling firm, William Hill (which also operates Down Under) launched an audacious bid for Canadian firm Amaya recently. Amaya owns Rational Group, the operator behind PokerStars. The bid is still on the cards, William Hill have claimed.
After Ladbrokes and Gala Coral, the United Kingdom’s #2 and #3 betting giants respectively, finalised their merger earlier in the year the UK competition regulators ordered the betting behemoths to sell off land-based betting shops to rivals. Those shop deals are now being assessed.
Ladbrokes also enjoys a foothold in Australia as part of its licensed overseas operations. Ladbrokes Australia operates to Aussie sportsbettors online but the company has come in for flack over its use of so-called ‘click to call’ in-play betting services.
A recent review of the Interactive Gambling Act 2001 (IGA) has effectively banned in-play betting, putting a big dent in Ladbrokes Australia’s operations.
Tabcorp and Tatts Tango To Tie Up A Treat
Australia’s biggest gambling firms agreed a merger worth in the region of $11.3 billion last month. Tabcorp would get full control of the combined business, but it still has to be approved by the ACCC (Australian Competition and Consumer Commission).
There are doubts over whether the merger will ever become a done deal given that a similar plan was scuppered by the ACCC ten years ago.
However, even with an IGA amendment bill being pushed through by the government, which will see limitations on “illegal” overseas betting firms, a Tabcorp-Tatts tie-up is seen as an attempt to shore up services Down Under in the wake of foreign competition.