In the UK, the Office of Fair Trading has directed to the Competition Commission their concern on the proposed takeover of Gala Casinos by the Rank Group. Their concern was whether the deal could “substantially reduce competition in the casino sector”.
According to Ali Nikpay, Senior Director of the Office of Fair Trading and Decision Maker of the case, Rank and Gala are the other two of only three large national casino operators in the UK. The merger would represent a consolidation and competition could be hugely reduced at the local and national levels. With high barriers in the entry and expansion within the casino sector, the loss of competition could probably be irreversible. Nikpay thinks that the Competition Commission ought to review the merger in detail to ensure that the consumers’ rights and interests are protected.
Rank is presently the second largest casino operator in the UK. They have 34 properties under the GCasino and Grosvenor brands. If the merger is approved, Rank will take control of other 23 sites, which belongs to Gala, and take with them 44% of the market. They hope to complete the £205million merger by the end of September. A conditional agreement had previously been signed by Rank back in May. The report by the Competition Commission is not expected until February 2013.