Merged giants Tabcorp and Tatts set to dominate Australian wagering

If approved, the tie-up of Tatts and Tabcorp has the potential to deliver a national betting pool for the first time.

Tabcorp CEO David Attenborough, pictured ahead of the Spring Carnival, is set to head the merged giant. .

The proposed $11 billion tie-up of Tatts and Tabcorp promises to dominate the wagering landscape outside Western Australia and has the potential to deliver a national betting pool for the first time, should the competition regulator wave it through.

The high-profile merger was confirmed by both parties today, with a resultant pledge to extend their combined yearly commitments to the racing industry further beyond $1 billion coming as the Spring Carnival kicks into full swing.

Assuming the deal proceeds, it would pool Tabcorp’s NSW, Victorian and ACT totalisators, alongside Tatts’ Queensland, South Australian, Northern Territory and Tasmanian totes, which combine under the TattsBet brand.

That leaves only the WA TAB — long flagged as a $1 billion privatisation option for the state government — as the remaining tote outside the merged entity’s grasp.

However, the WA TAB already combines with Victoria’s to ensure a larger pool, meaning the prospect of a national tote is a near-term option, a change in the dynamic from the three pools currently on offer (TattsBet, TAB NSW and TAB VIC).

The merged wagering behemoth would also extend its reach into gaming, with a dominant position in the very profitable lotto sector.

In this area Tatts is the major player, given strong monopoly positions in Queensland and NSW.

Its units include NSW’s only licensed lottery operator NSW Lotteries, Queensland’s only licensed lottery operator Golden Casket and the Tatts brand of lottery products on offer in Victoria, Tasmania, the ACT and Northern Territory.

Tabcorp is not left out, having control of Keno in Victoria, NSW, Queensland and the ACT as well as pokies machines being offered to pubs and clubs through its Tabcorp Gaming Solutions business.

The company also controls media assets in Sky Racing and Sky Sports Radio, as well as animated racing game Trackside, online bookmaker Luxbet and the TAB Sportsbet brand.

Annual synergies of $130 million in earnings before interest, tax, depreciation and amortisation synergies should result from the merging of the complementary suite of assets.

It is also expected to drive at least $50m extra per annum in dividends to the local racing industry, adding to the more than $1bn offered by the two companies in fiscal 2016.

It is the prospect of a deeper, more liquid national betting pool, however, that is the most tantalising aspect of the deal.