UK financial regulators are taking a closer look at Rank Group PLC’s (Rank) proposed purchase of Gala Casinos Limited (Gala) because they think the deal would stifle competition in that market.

British financial news outlets are reporting that the Office of Fair Trading (OFT) has asked the Competition Commission to take a closer look at how the long term ramifications of the acquisition. If the purchase did go through, Rank and Genting would be the only two major casino operators left in the country.

OFT officers also noted that high licensing fees and other costs greatly limit the chances of new casino operators entering the market.

Rank Willing to Work with Regulators

Rank appears to be willing to work with regulators to lower their profile and have even offered to sell a number of their smaller holdings. Though the OFT and Competition  appreciated the gesture, they are continuing on with the investigation.

The director of the OFT, Ali Nikpay shared his thoughts on the merger with reporters saying:

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…As such, we believe it is appropriate that the Competition Commission reviews this merger in detail to ensure that the interests of consumers are protected.

There’s no word yet on when the investigation will be completed.

Do you think there’s enough competition in the UK casino sector? Let us know in the comments section below this article.

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