CMA confirms shop closure requirement for Ladbrokes-Coral deal

26 July 2016

The UK’s Competitions and Markets Authority (CMA) has confirmed Ladbrokes and Gala Coral must sell shops in order for their proposed merger to go through.

In May, the CMA said in its initial investigation into the deal that the two firms would need to offload as many as 400 shops to address competition concerns that the merger may create in 642 localities across the UK.

The regulatory body has now followed up on this ruling by confirming that the two operators must sell between 350 and 400 land-based sites to one or more “suitably qualified up-front buyers”.

The CMA, which would need to approve any sale, added that as many of the problematic local areas overlap, the sale of a betting shop in one area could also remedy competition concerns in the overlapping area.

Martin Cave, inquiry chair at the CMA, said: “We’ve found that the merger between two of the largest bookmakers in the country would reduce competition and choice for customers in a large number of local areas.

“For these customers, competition comes from the choice of shops in their local area and they would lose out from any reduction of competition and choice.

“Discounts and offers of free bets to individual customers are two of the ways betting shops respond to local competition which could be threatened by the merger.

“Such a widespread reduction in competition at the local level could also worsen those elements that are set centrally, such as odds and betting limits.

“Although online betting has grown substantially in recent years, the evidence we’ve seen confirms that a significant proportion of customers still choose to bet in shops - and many will continue to do so after the merger.

“We therefore believe that a sale of shops of this scale is needed to protect these customers.

“We require Ladbrokes/Coral to sell around 350 to 400 betting shops to a suitable purchaser - or purchasers - in order to ensure that customers continue to benefit from competition in those local areas

“It is now for the parties to propose a divestment package and one or more suitable purchasers for the CMA to approve.”

Related article: CMA says Ladbrokes-Gala Coral deal may hinge on shop sales