THE merger of two of the UK’s biggest casino operators suffered a setback after being referred for a full competition inquiry.
The planned £205m acquisition of 23 Gala Coral sites by Mecca Bingo owner Rank would see it leapfrog Malaysian firm Genting as the UK’s biggest player, giving Rank’s Grosvenor casino division 57 sites.
But the Office of Fair Trading fears the merger will reduce competition at a national level and in nine local areas and has referred the deal to the Competition Commission for further consideration, despite Rank’s offer to divest of casinos in seven locations.
The OFT said a reduction in competition to just two large national operators may result in a worse deal for consumers.
It said there were high barriers to entry and expansion in the sector, limiting the ability of other players to replace the loss of competition.
The Competition Commission is expected to report by February 3 and has the power to block the deal altogether.
Rank, which has the Mecca Bingo and Grosvenor Casino complex at Folly Hall in Huddersfield, said last week that it hoped to complete the tie-up by the end of September.