The impending Tabcorp/Tatts merger is a lesson in corporatism with the media playing the part of cheerleader/propagandist for rent-seeking Big Business. It’s also a lesson in the inherent stupidity of artificial laws that restrict voluntary business activity.
The main reason for Tabcorp and Tatts to merge is for them to be able to increase their leverage over the Australian government. There are other tangential banal reasons that any merger can use as an excuse such as merging clientele and cross-selling, but anyone can make that case. What Tabcorp really wants is for the Aussie government to shut out its competition. Back in April it got one step closer with the O’Farrell review of the 2001 Interactive Gambling Act (IGA).
Tabcorp had a lot to do with encouraging this “review” in the first place, the review basically consisting of recommendations on what to do practically in order to tighten the Australian gambling market and restrict it from access by non Australian operators. Protectionism scores another goal. Donald Trump would applaud. The noble review, which was initiated in order to protect the children and consumers from a gambling zombie apocalypse that would surely have occurred if the children were left alone and consumers allowed to do what they wanted, had 18 of 19 recommendations accepted by the Australian feds. Why not all 19? You have to at least give the pretense of being independent. Otherwise people might think you were just a mafia enforcer of policies advocated by business too lazy to compete on the free market.
The whole situation is quite bizarre. The act restricts in-play betting to telephone and retail channels, clearly in an attempt to cut out international operators that can most easily operate online. This artificially favors Australian companies like Tabcorp and Tatts over William Hill, Ladbrokes, and other British operators. Here’s where the situation is laid bare though. William Hill had spearheaded an attempt to technically comply with the silly law via a voice-activated phone app that technically makes the betting “over the phone” and therefore compliant with the Interactive Gaming Act. Others copies the strategy, but the reviewers are not happy about it. Why not? Because it disrespects the Act’s “original intent”.