CMA to rule on Ladbrokes-Coral merger before June 24

12 January 2016

The UK Competitions and Markets Authority (CMA) has announced that it will make a decision on the proposed merger of Ladbrokes and Gala Coral by June 24, after opting to proceed with a ‘fast track’ investigation of the agreement.

The CMA last month announced that it could carry out a fast track investigation of the merger in order to speed up its traditional investigation timetable and pass a ruling on the deal faster.

In order for a case to be fast-tracked, the CMA must have evidence at an early stage that the test for reference to phase two of investigation is met.

The CMA said that it had found that the transaction meets the test as it gives rise to a “realistic prospect of a substantial lessening of competition” in relation to the supply of fixed odds betting products in licensed betting offices (LBOs) in many local areas where Ladbrokes and Coral overlap.

The regulator also found that while betting online has grown in recent years, a significant proportion of customers continue to bet only in LBOs. The CMA therefore ruled that the loss of competition between Ladbrokes’ and Coral’s LBOs in local areas where choice will be reduced to only one or two LBOs may lead to a worsening of their offer to customers.

In addition, given that the criteria for a fast track reference was met on the basis of the supply of fixed odds betting in LBOs in local areas, the CMA said it was not necessary for the CMA to reach a conclusion at phase one regarding any other potential competition concerns raised by the merger.

Additional concerns will be examined during phase two of the investigation, as well as fixed odds betting in LBOs at a local level.

The CMA must reach a final decision by June 24.

Andrea Coscelli, executive director of markets and mergers at the CMA and the decision-maker in this case, said: “As the second and third largest bookmakers in the country in terms of betting shops, the merger could affect competition in the very large number of areas where their shops overlap.

“As such it warrants an in-depth investigation so we can look in detail at these and other potential competition concerns.

“The fast-track request means that the inquiry group can now get started with that investigation.”

Related article: CMA set for ‘fast track’ investigation of Ladbrokes-Coral merger