Ladbrokes and Coral have jumped a lot of hurdles to complete their requested merger, the latest of which was an order by the Competitions and Markets Authority (CMA), to sell 400 of their betting shops in an attempt to avoid the merger creating an unfair monopoly.
Ladbrokes Coral are in the process of completing this, but fears of the merger's monopoly are still present and the British Horse Racing Authority (BHA) are the latest critics, lobbying to the CMA that Ladbrokes Coral should be forced to pay a levy on its online British horse racing revenues.
Horse Racing Levy For Ladbrokes Coral
Nick Rust, the chief executive at BHA, wrote letter to the CMA back in February, which was
published a few days ago. Rust argues that simply limiting the number of high street betting shops that Ladbrokes Coral own won't solve the issue, since the online market place will still be affected by the size of the online presence of the merged companies.
Horse racing will be negatively affected by the increased lack of competition, both for media rights and the odds offered to customers for horse racing. His solution to this problem is to make Ladbrokes Coral pay a horse racing bet levy to host horse race betting on their online services, much like they already do with their high street businesses.
Government Enforced Betting Levies
Although the UK government have already announced proposals for all casino operators to
require a horse race betting licence for their online services by April 2017, the BHA simply don't think this is happening fast enough.
Nick Rust explained that bringing in an industry regulated levy before the replacement by the government's legislation “would be justified as it would ensure, through a more sustainably funded British Racing industry, a ‘higher quality’ product for UK betting customers to bet on“.
The Ongoing Ladbrokes Coral Merger
There's been no word from the CMA regarding whether they'll follow up the BHA's request for a levy, or simply continue to authorise the merger as previously agreed. There's a few points against the levy that the BHA are putting forward. Firstly, by implementing it so late in the merger process, the CMA could look flippant by adding barriers to the merger's progress.
The BHA have also come under fire in the past for charging bookmakers for additional licences such as the Authorised Betting Partnership (ABP) classification, which saw bookmakers pay additional funds to the BHA in order to host any advertisement or sponsorship involving horse racing.
However the CMA decides, it'll be an interesting final few months as the monolithic Ladbrokes Coral crawls closer to fruition.