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TAB Update: Beattie Cites Competition Concerns

7 November 2003

A day after Victorian betting company Tabcorp issued a hefty buyout bid for TAB, its competitor in New South Wales, Queensland's premier, Peter Beattie, strongly criticized the proposition and stated that he would take his concerns to the Australian Competition and Consumer Commission (ACCC).

Dick McIlwain, managing director for UNiTAB, the company that is already three weeks into a merger agreement with TAB, also spoke about the matter, saying that his company would not engage in a bidding war with Tabcorp.

Beattie opposes the bid as anti-competitive.

"The reality is that to have 80 percent of the gambling market in Australia is unacceptable," Beattie said. "If that goes ahead then it makes a joke of competition."

He added, "If they allow Tabcorp to take over NSW TAB then lets forget about competition, let's go back to state-run monopolies, because this will be in essence a private monopoly."

Beattie plans to voice his complaints in a letter to the ACCC. According the Advertiser, an ACCC spokeswoman confirmed that Tabcorp had approached the commission before announcing its proposition. The ACCC is now waiting for submissions from Tabcorp and TAB before it makes a decision.

Additional obstacles lie in Tabcorp's way. NSW law says that no company may own a license for both gaming and wagering. That and other legislation would need to be changed before the Tabcorp deal could occur.

To accommodate the merger between TAB and UNiTAB, New South Wales had only recently changed a law that prevented any company from taking more than a 10 percent stake in TAB.

Dick McIlwain, UNiTAB's managing director, remains resolved that his company will still consolidate with TAB and says his company will not offer a better deal than it already has.

"We have an agreement with TAB; that agreement is on foot and we expect it to proceed to completion," McIlwain explained.

If they decide to recommend an alternative offer, that would constitute a change in the offer, and after we thank them for the break fee we will be free to pursue other opportunities."

The break fee McIlwain refers to is the $5 million that TAB would be required to pay to UNiTAB if it were to break the deal.

The day after the announcement, shares in TAB rose 30 cents (8.15 percent) to close at $3.98, a value still below the $4.18 that Tabcorp has valued TAB stock for its deal. Tabcorp's stock, meanwhile, dropped 46 cents (4 percent%) to close at $11.12, and UNiTAB stock dropped 30 cents (4.41 percent) to close at $6.50.

TAB Update: Beattie Cites Competition Concerns is republished from iGamingNews.com.
Bradley Vallerius

Bradley P. Vallerius, JD manages For the Bettor Good, a comprehensive resource for information related to Internet gaming policy in the U.S. federal and state governments. For the Bettor Good provides official government documents, jurisdiction updates, policy analysis, and many other helpful research materials.

Bradley has been researching and writing about the business and law of internet gaming since 2003. His work has covered all aspects of the industry, including technology, finance, advertising, taxation, poker, betting exchanges, and laws and regulations around the world.

Bradley Vallerius Websites:

www.FortheBettorGood.com
Bradley Vallerius
Bradley P. Vallerius, JD manages For the Bettor Good, a comprehensive resource for information related to Internet gaming policy in the U.S. federal and state governments. For the Bettor Good provides official government documents, jurisdiction updates, policy analysis, and many other helpful research materials.

Bradley has been researching and writing about the business and law of internet gaming since 2003. His work has covered all aspects of the industry, including technology, finance, advertising, taxation, poker, betting exchanges, and laws and regulations around the world.

Bradley Vallerius Websites:

www.FortheBettorGood.com