BUSINESS

UK competition watchdog probing Stars Group, Sky Bet union

TAGs: competition and markets authority, Sky Betting and Gaming, The Stars Group

uk-competition-watchdog-stars-group-sky-betThe UK’s competition watchdog is probing The Stars Group’s US$4.7b acquisition of Sky Betting & Gaming (SBG).

On Tuesday, Canada’s The Stars Group (TSG) announced that it had completed its acquisition of SBG, which the company originally announced in April. On Wednesday, the Competition and Markets Authority (CMA) announced that it was “investigating the completed acquisition” and had served an initial enforcement order under section 72(2) of the Enterprise Act 2002.

The CMA kept mum about its specific concerns regarding the deal, which created the world’s largest publicly traded online gambling firm. The enforcement order did say the CMA was considering whether to make a reference under sections 22 and 33 of the Act, which deal with mergers resulting in “a substantial lessening of competition” in the marketplace.

The CMA has instructed the companies involved not to take any further action that leads to the integration of SBG’s business into TSG’s business, or to transfer ownership or control of either company’s business, or take any steps that impair the ability of either company to compete independently in any of the markets in which they both operate.

The companies have also been instructed to keep their customer and supplier lists separate, not to make any key staff changes or transfers, and not to share any “business secrets, know-how, commercially-sensitive information, intellectual property or any other information of a confidential or proprietary nature relating to either of the two businesses.”

The CMA served the companies with its enforcement order on July 6, but this development went unmentioned in TSG’s Tuesday announcement regarding the completion of its acquisition.

The CMA has taken a greater interest in the UK’s gaming industry of late, and has occasionally demanded concessions from merging companies, including forcing Ladbrokes and Gala Coral to dispose of several hundred betting shops before allowing the two companies to ride off into the sunset.

However, the CMA voiced no objections to GVC Holdings’ subsequent takeover of the Lads-Coral tandem, in part due to GVC’s utter lack of a UK retail presence. TSG, the parent company of PokerStars, similarly has no UK retail presence, and its nascent sports betting operation is a minnow compared to SBG’s potent offering.

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