When combined, Ladbroke and Gala Coral account for 45% of the UKs high-street book makers. While joining forces may at first sound as though it would be a successful merger, the Competition Markets Authority has the right to demand that they close 15% (or 1,300) of their live shops if the merger goes through, according to a report from U.K’s The Week.
This is because, in an effort to promote a fair marketplace, one entity is not allowed to have more than 30% of the market share once combined. So this raises the question—why merge?
While closing some of their shops may have been a given, closing 1,300 live locations may not make the deal a financially lucrative deal for either company.
In fact, The Guardian’s Nils Pratley believes that the regulatory obstacles could squash the deal. On the flip side, others believe the merger is strategic and a response the rapidly growing rate of online betting.
To learn more about the ensuing controversy, click here.
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