If preliminary reports are to be believed, Ladbrokes and Coral could land into a merger that would create a £2.3bn venture capital to offer betting services in UK. However, the news is not as good for bettors since proposed merger would shut down as many as 400 betting shops across United Kingdom shrinking competition and available options to the serious bettors. The Competition and Markets Authority has revealed the details about side effects of proposed merger and how it could fail on players’ expectations, while on the other side, both Ladbrokes and Coral are number two and three operators within the state, hence if they come together, they would be in a better position to expand their business. For now, it looks like lesser number of betting shops would not leave any good impact on the betting industry hence CMA has warned if any of Ladbrokes or Coral decides to close their existing shops, it would indirectly benefit William Hill who owns a portfolio of 2400 betting shop, although the new venture would have a much larger chain of betting shops yet they would not suffice the needy players who have long been associated with them as a separate entity.
Talking about the proposed deal and its aftermath, Martin Cave, chairman of the CMA, said: “We’ve provisionally found that the merger between two of the largest bookmakers in the country may be expected to reduce competition and choice for customers in a large number of local areas. Discounts and offers of free bets to individual customers are ways betting shops respond to local competition which could be threatened by the merger. We’re also concerned that such a widespread potential reduction in competition at the local level could worsen those elements that are set nationally, such as odds and betting limits.”
According to experts, though new merger would have to close as many as 400 shops to better concentrate on the remaining, they should focus on their existing customers before they move out to their competitor. Cave added, “We’ll need to look closely at the exact number of shops and areas that would be involved – the overall size and complexity may mean that the sales need to be substantially completed before the merger can go ahead.”
The response to the CMA statement went into Ladbrokes favor whose share opened seven percent high on the stock exchange and a spokesman from the group issued a statement confirming their views with the CMA, he said, “Our focus now will be agreeing the remedies with the CMA and finding the appropriate buyer or buyers for the shops.”