Tabcorp decision to switch regulators mid-race is being led by lawyers

It seems clear that Tabcorp’s legal team was not confident that the Tatts merger would pass muster with the ACCC.

Tabcorp CEO David Attenborough with Danuki at Clinton McDonald racing stables. (David Geraghty/The Australian)

Tabcorp boss David Attenborough was clearly not as convinced as everyone else that he had cleared the major ACCC hurdles for his Tatts deal, which explains today’s move to seek an Australian Competition Tribunal ruling on the issue.

The decision is clearly being driven by his legal team: Herbert Smith Freehills’s Chris Jose, Gilbert&Tobin’s Gina Cass Gottlieb and Clayton Utz’s Michael Corrigan.

Lawyers would prefer the certainty of the tribunal, which generally aims to get a decision back in three months.

Given where the ACCC was at on the merger, this is a classic case of lawyer overkill, of trying to bed down a judgment that was almost ready to be delivered.

Clearly the Tabcorp legal team was not as confident as the media was in its ability to get this deal done.

It is risky to send the matter to the Australian Competition Tribunal (ACT) with a competing bidder in the wings because the tribunal gives that competitor a platform to launch its case and, given there will be no decision until June, more time to move commercially.

The ACCC can take longer and looks at the issue in terms of its impact on competition, while the tribunal can take into account public benefit arguments.

In its statement of issues released last week, the ACCC said there was only one red-light issue, Tabcorp’s Queensland monitoring business Odyssey which has already been tagged for sale.

As flagged on Saturday, there were also some problematical orange light issues raised, such as the control of Sky Racing being extended to Tatts, which was being opposed by the Seven Network and Racing Victoria.

Tatts is also trying to buy Intralot in Victoria for $90m, which would give the combined firm control over the monitoring and management of poker machines in the state.

The combination gives the two firms an effective national monopoly in the wagering betting pool but the ACCC found the existence of corporate bookmakers made that issue less of an issue.

It did express some sympathy with the opposition position put by Seven and Racing Victoria.

The public benefits cited by Tabcorp are more akin to self-serving interests, like creating a national platform, a national pooling system and additional funding for the racing industry.

The lawyers’ picnic can now officially begin.