Casino takeover faces inquiry on competition

By GARETH MACKIE
Published on 21/08/2012 00:00

RANK’S proposed £205 million acquisition of Gala Casinos is facing a full inquiry after the group’s proposal to sell some casinos did not assuage regulators’ concerns that the deal would affect competition.

The Office of Fair Trading (OFT) said the takeover, first unveiled in May, would leave only two large national casino operators – Rank and Malaysian firm Genting. It also said rivals faced considerable challenges in breaking into the sector because of the strict licensing regime.

Ali Nikpay, senior director at the watchdog, said: “Rank and Gala are two of only three large national casino operators in the UK. This merger would represent a major consolidation which could be expected to reduce competition, both locally and nationally.

“The high barriers to entry and expansion in the casino sector mean the loss of competition could potentially be irreversible.”

Rank, which also owns the Mecca Bingo chain, currently has 34 casinos across the UK and the deal with privately-owned Gala Coral would add a further 23 sites, creating Britain’s largest casino operator.

Although the group offered to sell some venues, the OFT said this did not address all the concerns raised by the merger and it has asked the Competition Commission to investigate further. A decision is expected by February.

Rank and Gala Coral said yesterday that they would consider the implications of the OFT’s decision before commenting further. Shares in Rank fell 2p, or 1.5 per cent, to 130.7p after the news.