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CMA investigates Skybet deal
Wednesday, September 26, 2018, by Lorien Pilling, comments 0

The Competition and Markets Authority (CMA) issued a statement inviting comment on the Stars UK acquisition of Sky Betting and Gaming.  The CMA fears that the takeover could lead to a substantial lessening of competition within any market or markets in the United Kingdom for goods and services. 

It is right and proper that the UK has an organisation that is independent of government that has the consumers back.  


At first blush it seems that there is no case to answer. PokerStars is the preeminent poker site, with casino.  Skybet is a sports book and casino with increasing market share.  The merger works because there is little overlap. 

Nevertheless, the CMA must ask the question, tick the box, and move on.  The problem is that the CMA’s findings never really seem to impact competition or have any benefit to the consumer. 

The competition authorities refused Ladbrokes’ purchase of Coral on the grounds of competition.  Yet some years later when there were fewer betting shops they allowed it under the premise that the Internet had changed everything.  

They also allowed the sale of media to betting shops based on fairness to the sellers, the monopoly of British horseracing. Little regard was given to the buyer of the media - the bookmakers. The result has seen an extortionate rise in costs to the extent that shops are now closing.  Such a move created less competition for the punter who now finds his local shops has closed and will soon be having to deal with a monopoly in his own parish. 

Why is the UK gambling industry consolidating at the rate that it is? Almost entirely due to increased taxes and regulation on the part of government.  The industry is having to react to that through acquisitions and mergers to reduce costs or face decline and extinction.  Doing so means the involvement of the government’s own agency, the CMA, to investigate companies from abusing their dominant position.  The CMA can veto an acquisition. 

It is all very odd and demonstrates that a lot of government action is predicated on the mood swing of the media with little thought for the consequences, intended or otherwise.