Involved companies
Tipico is a portfolio company of CVC and offers online and retail sports betting and gambling services with operations in five European countries (Germany, Austria, Croatia, Gibraltar and Malta). In Austria, Tipico operates betting shops – some of which by itself, others through franchise partners – and also offers sports betting services online throughout Austria.
The target company is a shareholder of Admiral Casinos & Entertainment AG (ACE), Admiral Sportwetten GmbH (ASW), its subsidiary Admiral Technologies GmbH (ATech) and HTM Hotel und Tourismus Management GmbH (HTM) (hereinafter referred to jointly, Atlas Group included, as “Admiral”). Admiral operates betting shops in all nine Austrian provinces, as well as online betting throughout Austria. At locations in Lower Austria, Upper Austria, Styria, Carinthia and Burgenland, Admiral also provides slot machines for gambling (“limited-stakes gambling”). Additionally, Admiral also provides food and drink in its shops.
AFCA’s competition concerns
Pre-notification talks were held with the company prior to the merger being notified. Companies may contact the AFCA before notifying the regulator of a merger if the transaction is complex or it is likely that the increase in market shares will result in high market concentration.
In the course of its examination of the planned merger, the AFCA identified competition concerns relating to the resulting concentration of betting shops in the gambling market. The AFCA investigations have shown that, after a merger, the companies involved would jointly hold very high market shares in many of these regional markets, which would be damaging to competition.
Market surveys conducted
As part of its investigations, the AFCA conducted market surveys in the sports betting market (both online and retail betting shops). These surveys showed that customers frequently switch between various online offers (for example because they are offered bonuses or discounts). However, according to the market survey, there is only a low level of switching between shops from different providers in close proximity to one another. The majority of respondents said that online sports betting providers could easily enter the market in Austria, particularly if the competitor was already active in another country. However, an entry into the market for betting shops, or a completely new market entry in the area of online gambling, would entail higher investment costs.
Conditions dispel competition concerns
To address the competition concerns, the parties offered the following commitments to the AFCA and the Federal Cartel Prosecutor:
Sale of 20 betting shops owned by Tipico to one or several suitable buyers, which will operate these betting shops as active competitors in the area of sports betting.
Continuation of 14 betting shops that are currently operated by franchise partners on the basis of a franchise agreement concluded with Tipico, under a new brand and using new technology. The plan is for Tipico, or possibly a future monitoring trustee, to support them in finding new franchise partners.
Monitoring of compliance with the commitments by an independent trustee.
As part of the commitments, a monitoring trustee, or, where applicable, a divestiture trustee, has been appointed, who may be contacted directly by market participants. The contact details of the monitoring trustee are as follows:
Alcis Advisers GmbH
Dr. Ulrich Puls
Fasanenstraße 73
10719 Berlin
Deutschland
ulrich.puls[at]alcis-advisers.com
Commitments Z-7022 CVC Capital Partners plc (Tipico Holding GmbH) / Atlas Group GmbH (only in German available)