If they want to go ahead with their takeover of the twenty three casinos belonging to Gala, then Rank faces sales in five areas to make sure that they do not cause an unfair monopoly on the casino business in the UK, the Competition Commission has announced. They feel that, because of the amount of casinos that would then belong to Rank in certain areas of the country, there are six areas of the UK in which the merger could be damaging to competition.
This is only a provisional ruling, but it suggests that the group will either have to leave some of the casinos with their original owners, or sell some of their own venues in order to move ahead. Casinos in London are not a problem because there is plenty of competition in that area, but there are concerns over the areas of Aberdeen, Liverpool/New Brighton, Stockton-on-Tees, Bristol, and Cardiff, where the competition is not stiff enough. There is also concern about Edinburgh, where Rank currently holds a license to build a new casino and where issues could therefore arise in the future. It is worth noting that the deal would also see them buying three casino licenses alongside the twenty three existing venues, which sees an eventual addition of twenty six to their property portfolio.
The Office of Fair Trading, or OFT, had referred the takeover to the Competition Commission in August, regarding “concerns the merger will substantially reduce competition in the casino sector”, and it has taken until now to hear back on any kind of results. The offer actually lapsed in September, but Rank did suggest at the time that the two companies were still in discussions over how they would go ahead if it was ruled that they could still do the deal in the future. The main issue here is that there are currently only two national chains other than Gala operating in the UK, so if Gala are taken out of the picture then it will be just Rank and Genting battling it out in the UK industry.