Antitrust Law Daily Wrap Up, ANTITRUST NEWS: U.K. competition authority announces full investigation of bookmaker merger, (Jan 12, 2016)

By Michael Menzhuber, J.D., LL.M.

The proposed merger between the second and third largest bookmakers in the U.K. will be referred for an in-depth phase 2 investigation by the Competition and Markets Authority (CMA), the agency announced yesterday.

Ladbrokes pic and Gala Coral Group Limited are, respectively, the second and third largest bookmakers in the UK by number of shops, known as licensed betting offices (LBOs). They also each operate two greyhound tracks, as well providing betting and gaming products online, “on-course” at certain racecourses, and by telephone.

For a case to be fast-tracked for reference to an in-depth phase 2 investigation, the CMA must, at an early stage of its investigation, have evidence that the test for reference is met. In the initial phase of the investigation, the CMA found that the proposed merger gives rise to a realistic prospect of a substantial lessening of competition in relation to the supply of fixed odds betting products in LBOs in a large number of local areas where Ladbrokes and Coral overlap. Therefore, the CMA determined that the proposed merger met the test for reference to an in-depth phase 2 investigation.

Because the criteria for a fast track reference was met on the basis of the supply of fixed odds betting in LBOs in local areas, it was not necessary to reach a phase 1 conclusion in relation to any other potential competition concerns, the CMA found. These concerns, along with fixed odds betting in LBOs at a local level, will be examined during the in-depth phase 2 investigation and third parties will have the opportunity to present their views on the merger in relation to all these issues.

The in-depth phase 2 investigation will be overseen by a group of independent panel members supported by a case team of CMA staff. The group must publish its final decision by June 24, 2016.

News: Antitrust AcquisitionsMergers