CC Probe on Casino Merger Set

Jack Humphrey, Regulatory journalist
August 30, 2012 /

The Competition Commission (CC) will investigate the anticipated acquisition by the Rank Group PLC of Gala Casinos Limited.

The Office of Fair Trading (OFT) has previously referred the case to the CC, which will decide whether the acquisition will harm the competition in any market or markets for goods or services in the UK.

Rank and Gala are two of the three large national casino operators in the UK. Following the merger, there would be only two large national casino operators, Rank and Genting.

Rank operates 34 casinos in the United Kingdom under brands including Grosvenor and GCasino. The Gala business being acquired operates 23 casinos, most of which currently operate under the Gala brand. In order to operate a casino it is necessary to hold a licence granted under the Gambling Act 1968 or the Gambling Act 2005.

The OFT was concerned that the merger would reduce competition both at a national level and in nine local areas, resulting in a worse deal for consumers.

Additionally, the OFT found that there were high barriers to entry and expansion in the casino sector due, among other things, to the licensing regime, which would severely limit the ability of third parties to enter or expand to replace the loss of competition caused by the merger.

 

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