AUSTRALIAN COMPETITION TRIBUNAL
IN THE AUSTRALIAN COMPETITION TRIBUNAL
APPLICATION BY TABCORP HOLDINGS LIMITED UNDER SECTION 95AU OF THE COMPETITION AND CONSUMER ACT 2010 FOR AN AUTHORISATION UNDER SUBSECTION 95AT(1) TO ACQUIRE SHARES IN THE CAPITAL OF A BODY CORPORATE OR TO ACQUIRE ASSETS OF ANOTHER PERSON
mr gf latta am (MEMBER)
dr dr abrahaM (MEMBER)
DATE OF DETERMINATION:
THE TRIBUNAL DETERMINES THAT:
1. Subject to the condition in the Annexure to this determination, Tabcorp Holdings Limited (ACN: 063 780 709) (“Tabcorp”) is granted authorisation pursuant to s 95AT and s 95AZJ of the Competition and Consumer Act 2010 (Cth) to acquire shares in Tatts Group Limited (ACN: 108 686 040) (“Tatts”) as set out in a Merger Implementation Deed between Tabcorp and Tatts dated 18 October 2016.
2. This determination includes the Annexure and the Attachment and all Schedules thereto.
ANNEXURE TO THE DETERMINATION DATED 22 NOVEMBER 2017
The authorisation is subject to the condition that Tabcorp give to the ACCC an undertaking pursuant to s 87B of the Act in the same form as the undertaking filed with the Tribunal and dated 29 May 2017 and attached hereto.
ACT 3 of 2017
APPLICATION BY TABCORP HOLDINGS LIMITED UNDER SECTION 95AU OF THE COMPETITION AND CONSUMER ACT 2010 FOR AN AUTHORISATION UNDER SUBSECTION 95AT(1) TO ACQUIRE SHARES IN THE CAPITAL OF A BODY CORPORATE OR TO ACQUIRE ASSETS OF ANOTHER PERSON
TABCORP HOLDINGS LIMITED (ACN 063 780 709)
MIDDLETON j (president)
mr gf latta am (MEMBER)
dr dr abrahaM (MEMBER)
DATE OF DETERMINATION:
22 november 2017
THE TRIBUNAL DETERMINES THAT:
1. Subject to the condition in the Annexure to this determination, Tabcorp Holdings Limited (ACN: 063 780 709) (“Tabcorp”) is granted authorisation pursuant to s 95AT and s 95AZJ of the Competition and Consumer Act 2010 (Cth) to acquire shares in Tatts Group Limited (ACN: 108 686 040) (“Tatts”) as set out in a Merger Implementation Deed between Tabcorp and Tatts dated 18 October 2016.
2. This determination includes the Annexure and the Attachment and all Schedules thereto.
ANNEXURE TO THE DETERMINATION DATED 22 NOVEMBER 2017
CONDITION OF THE TRIBUNAL’S AUTHORISATION
The authorisation is subject to the condition that Tabcorp give to the ACCC an undertaking pursuant to s 87B of the Act in the same form as the undertaking filed with the Tribunal and dated 29 May 2017 and attached hereto.
1 Attached to these Reasons is a Primer of Agreed Facts (to which the Tribunal will need to return) (Annexure 1), and a Dictionary of various terms used in the Reasons (Annexure 2).
2 Under s 95AT of the Competition and Consumer Act 2010 (Cth) (‘the Act’), the Tribunal may grant an authorisation to a person to acquire shares in the capital of a body corporate. A person who wants such authorisation must apply to the Tribunal: s 95AU.
3 On 13 March 2017, Tabcorp Holdings Ltd (‘Tabcorp’) lodged an application with the Australian Competition Tribunal (Tribunal) under s 95AU of the Act. Under this application, Tabcorp sought authorisation to acquire the issued share capital of Tatts Group Ltd (‘Tatts’), as agreed between Tabcorp and Tatts in a Merger Implementation Deed of 18 October 2016. Tabcorp is a publicly listed company in the business of providing wagering and gaming products. Tatts is also a publicly listed company, in the business of providing lotteries, wagering and gaming products. The application by Tabcorp was precipitated by concerns that the acquisition may lead to a substantial lessening of competition in a market, preventing the merger under s 50 of the Act. By applying to the Tribunal for authorisation, the proposed acquisition became subject to the test of public benefit under s 95AZH.
4 Participants in this application included Tabcorp and Tatts (the Merger Parties), the Australian Competition and Consumer Commission (‘ACCC’), CrownBet, Racing.Com Pty Ltd, Racing Victoria Ltd, Harness Racing Victoria, and Greyhound Racing Victoria. (The last three of these were jointly represented, and are subsequently referred to in these Reasons as the Victorian Racing Interveners.) Attention was largely devoted to concerns surrounding the impact of the acquisition on the wagering market, racing media, and the sale of exclusive State wagering licences.
5 The Tribunal received submissions regarding the proposed acquisition from the parties, interveners, competitors of the Merger Parties (corporate bookmakers licensed in the Northern Territory), industry participants, interested third parties, and economic experts commissioned by the parties and interveners. The application was heard by the Tribunal for fourteen days over May and June 2017. On 22 June 2017, the Tribunal granted authorisation for the acquisition pursuant to s 95AT of the Act, contingent on a condition regarding the divestment by Tabcorp of its Odyssey business (to which Tabcorp and the ACCC were agreed): Application by Tabcorp Holdings Limited  ACompT 1 (which is also referred to as the ‘earlier Determination’).
6 The ACCC and CrownBet appealed the earlier Determination of the Tribunal on several grounds. First, it was said that the Tribunal had failed to take into account a relevant consideration presented by the ACCC, which was characterised as:
the effect of the merger on the takeout rate provided by the Merged Entity in Tatts’ exclusive retail jurisdictions of Queensland, Tasmania, South Australia or the Northern Territory: Australian Competition and Consumer Commission v Australian Competition Tribunal  FCAFC 150 at  (‘ACCC v Australian Competition Tribunal’); or
the effect of the merger on the state of competition between the Merger Parties in the online and telephone channels (referred to collectively in these Reasons as ‘online’), especially in relation to totalisator wagering: ACCC v Australian Competition Tribunal at -.
The Full Court determined that the Tribunal was obliged to consider these alleged detriments, but that it could not conclude that the Tribunal had done so: at . It was not possible to say that the failure to take these detriments into account was immaterial to the outcome: at .
7 Second, it was said that the Tribunal failed to consider whether the merger ‘would result or be likely to result’ in a benefit to the public, including relevant detriments: at . The Full Court rejected this submission, concluding that it would have been meaningless to do so in relation to detriments which the Tribunal had concluded did not exist: at .
8 Third, the ACCC submitted that the Tribunal did not ever conduct an exercise whereby outcomes (particularly benefits) should be weighted according to how extensively amongst the community they would be distributed: at . The Full Court considered the legal requirements in the text of the Act, and rejected this submission: at -.
9 Finally, CrownBet argued that the Tribunal’s decision to grant an authorisation was so unreasonable that no reasonable person could have exercised the power in s 95AT of the Act in that way: at . Similarly, it argued that the state of satisfaction required by s 95AZH(1) was a jurisdictional fact, the formation of which was irrational, illogical or not based on findings or inferences of fact supported by logical grounds: at . Seven examples of irrationality were advanced. None were accepted by the Full Court: at -.
10 The Tribunal’s Determination was set aside pursuant to s 16(1)(a) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) and under s 39B of the Judiciary Act 1903 (Cth): at . On 20 September 2017, the application by Tabcorp was referred back to the Tribunal for further consideration in such manner as it deemed fit: at . The Full Court clearly anticipated that the Tribunal would have jurisdiction to continue to consider the matter, probably concentrating on the “ACCC’s more confined case on detriment”: see .
11 There is a question as to the jurisdiction of the Tribunal to re-hear the first application by Tabcorp (which is referred to hereafter as ‘ACT 1 of 2017’ or ‘the first application’). This was a matter not considered by the Full Court, and no argument was presented before the Full Court as to the consequences of setting aside the earlier Determination and referring it back to the Tribunal. That is now water under the bridge, and the Tribunal must proceed upon the basis that the earlier Determination has been set aside.
12 The Act states that if the Tribunal does not make its determination within the ‘relevant period’, the application is deemed to be refused: s 95AZI(1). The ‘relevant period’ is 3 months from the date of application, which the Tribunal may extend by up to another 3 months: s 95AZI(2). By notice dated 7 June 2017, the Tribunal had extended the period by which it could make its determination to 10 September 2017. The Act provides no mechanism for the Tribunal to further extend the ‘relevant period’. The Full Court judgment (remitting the matter to the Tribunal) was determined on 20 September 2017. The Act is silent as to the effect, as regards the ‘relevant period’, of judicial review remitting the matter to the Tribunal.
13 On 26 September 2017, the Tribunal heard from parties and interveners as to the legal effect of the expiry of the ‘relevant period’ in these circumstances. The ACCC, CrownBet and the Victorian Racing Interveners noted that the effect of s 95AZI(1) may be to remove the matter from the Tribunal’s jurisdiction. To expedite the process and avoid concerns about a lack of jurisdiction, Tabcorp made a separate application to the Tribunal on 29 September 2017, in similar form to its first application (‘ACT 3 of 2017’ or ‘the second application’). This application was to the same effect, with information updated to allow the Tribunal to consider the matter as it presently stands, rather than at 22 June 2017. Under the Act, the Tribunal has jurisdiction to reach a determination with respect to ACT 3 of 2017 until (at least) 29 December 2017.
14 For ACT 3 of 2017, parties and interveners remain the same as ACT 1 of 2017, and the Tribunal was constituted by the same members as presided over ACT 1 of 2017. Only the Victorian Racing Interveners raised questions of res judicata and apprehended bias. The Victorian Racing Interveners made no formal application to the Tribunal or any of its members to recuse themselves. If their written concerns raised in a letter dated 9 October 2017 amount to such an application, it would have been refused and the Tribunal rejects any suggestion of apprehended bias. In any event, no timely application has been made to a court to prevent the Tribunal as presently constituted from hearing the applications before it. The Tribunal notes that the Victorian Racing Interveners indicated in the letter dated 9 October 2017 that they “cannot responsibility devote further industry funding to re-litigating substantially the same controversy before the same three decision makers where the reasonable person would consider the outcome to be a foregone conclusion”. The Tribunal observes that the test for apprehended bias is whether the Tribunal might not decide the case impartially; the test is not whether the Tribunal will decide the case adversely to the person complaining of bias – see eg. Re Polites; Ex Parte Hoyts Corporation Pty Ltd (1991) 173 CLR 78, 85-89 per Brennan, Gaudron and McHugh JJ.
15 As to the concern relating to res judicata, the Tribunal sees no basis for such a concern to arise either as a matter of principle nor in the circumstances of this situation. If the Tribunal has jurisdiction in ACT 1 of 2017, then the Full Court has directed the matter back to the Tribunal to re-consider. If the Tribunal does not have jurisdiction in ACT 1 of 2017, then with the earlier Determination being set aside, according to the reasons of the Full Court ab initio (see ), it is as if no valid Determination has been made. In these circumstances, Tabcorp could bring another application under s 95AU of the Act, there being no legislative prohibition from doing so.
16 The Tribunal considers that it is required to take into account all the evidence and material submitted under ACT 1 of 2017, and all relevant factual developments since 22 June 2017. To overcome any concerns about the lack of jurisdiction over ACT 1 of 2017, and to ensure that procedural fairness was afforded without necessitating a complete re-hearing of the application, the Tribunal effectively issued directions and considered the separate applications for ACT 1 of 2017 and ACT 3 of 2017 in parallel.
17 However, the Tribunal has proceeded to hear and to consider effectively ACT 1 of 2017 again, and ACT 3 of 2017 as a new application. It has been impossible to do otherwise in light of the submissions of the parties and participants, and the possibility that the Tribunal may find detriment which would involve then a balancing exercise to determine whether there was the relevant benefit to the public that the acquisition should be allowed to occur.
18 The Tribunal accepts, as the ACCC contended, that it would be wrong, for instance, to confine the Tribunal’s present task to the question of simply whether, if the proposed acquisition occurred the Merged Entity would no longer be constrained by Tabcorp in setting its pari-mutuel take-out rate in Queensland, Tasmania, South Australia or the Northern Territory. The Tribunal’s discretion cannot be exercised by simply turning its mind to that question and slotting an answer mechanistically into an analysis it has previously made. Pursuant to s 95AZH of the Act, the Tribunal must consider all the evidence on detriments in light of the clarification provided by the Full Court, and must weigh those detriments against such benefits that the Tribunal finds are likely to result from the proposed acquisition.
19 Therefore, the Tribunal’s task is to fully engage in a new exercise of weighing up all materials relevant to the applications. This new weighing-up was directed to the question of whether the Tribunal was satisfied in all the circumstances that the proposed acquisition would result, or be likely to result, in such a benefit to the public that the acquisition should be allowed to occur.
20 However, neither legal principle nor procedural fairness require that the Tribunal ignore the evidence, submissions, and deliberations in respect of the first application (including its Reasons) in now considering the applications before it. In fact, all parties and participants referred to various such elements of the first application in different respects, as the Tribunal expected and effectively directed in conducting the applications concurrently. It was suggested by CrownBet that the Tribunal in its Reasons should avoid reference to and repetition of its earlier Reasons, so as to avoid any perception of pre-determination. The Tribunal has not adopted this course in the present Reasons – it is not the approach taken by the parties and participants themselves in the preparation of the evidence or submissions, and it is an unrealistic and unreasonable course to adopt without there being a legally principled reason for doing so. In any event, the Reasons themselves will demonstrate the extent to which the Tribunal has in fact considered the matter afresh although referring back to its earlier Reasons. Having said this, it will be apparent that the Tribunal has essentially reached the same conclusions on the important aspects of the matters in dispute. In many instances, the parties and participants sought to re-argue (as they were entitled) matters canvassed and decided previously by the Tribunal in the earlier Determination. The Tribunal has considered these arguments. However, because many matters were re-argued, it is not surprising that the parties, participants, and the Tribunal itself has made reference to their earlier reasoning and views.
21 These Reasons have attempted to be self-contained, in the sense that they incorporate many matters covered in the earlier Reasons. Whilst this adds substantially to the length of these Reasons, it avoids the need for the reader to refer back to another document.
22 The Tribunal makes another observation on the process it has adopted in relation to witnesses. Even though the Tribunal is an expert body, it must adhere to the principles of procedural fairness and accord practical justice. The parties and participants have been given full opportunity to present further evidence, make submissions, and to request cross-examination (albeit limited) of any witnesses. The parties and participants were aware that the Tribunal would rely upon the evidence and submissions in respect of the first application. No application by any party or participant was made to recall any witness to give oral evidence, or to retract or vary previous evidence other than on the basis of new developments arising since 22 June 2017. The Tribunal has again had the advantage of the expert evidence presented in respect of the first application, as supplemented by expert evidence presented to assist in the consideration of these applications. Substantial further evidence has been presented, as well as submissions.
23 In ACT 1 of 2017, the Tribunal made some introductory observations about the application by Tabcorp, the parties and interveners in respect of the application, and some procedural matters. These are still relevant to both applications presently before the Tribunal, subject to any necessary updating or modification which the Primer deals with or is mentioned later in these Reasons.
 In preparation for determination of the application by Tabcorp, it became clear that the participants and interested third parties held information that was both relevant to the decision and commercially sensitive. It also became clear that there were a number of surrounding legal issues, some of which may be the subject of commercial negotiations or litigation at a later stage. Wherever possible, the Tribunal’s preference was to maintain a public hearing while making documents available on the merger authorisation register pursuant to s 95AZ(2) of the Act. This was made more challenging by the filing of more than 2,500 documents accompanied by a claim of confidentiality.
 The Tribunal responded by ordering that four levels of confidentiality be applied. First, the Tribunal, the ACCC, external counsel, and a small number of external solicitors were provided access to all documents, provided that relevant confidentiality undertakings were signed. These practitioners were permitted to attend all hearings of the Tribunal. Secondly, a wider number of external solicitors received access to all information and attended all hearings, except where those documents or hearings related to possible future legal proceedings or extremely sensitive contemporaneous commercial negotiations. Thirdly, internal counsel were permitted access to information that was considered commercial-in-confidence in that it was not in the public domain, but was otherwise generally known within the relevant industries. Fourthly, the Tribunal ensured that redacted versions of confidential documents were publicly available, and more often than not, the general public was able to attend the hearing. The Tribunal was greatly assisted by participants, and in particular by the ACCC, when assessing the claim of confidentiality over submitted information.
 The Australian Competition Tribunal is a statutory body performing an executive role. It considers the merits of applications submitted under s 95AU, and makes determinations under the Act in compliance with the prescriptions of the Act. For the purpose of hearing and determining proceedings, the Tribunal is constituted by a Division consisting of three members: s 37. Members are appointed by the Governor-General: s 30(3). The Division is an expert panel, whose members are qualified for appointment by virtue of their knowledge of, or experience in, industry, commerce, economics, law or public administration: s 31(2).
 Tabcorp Holdings Limited is a public company incorporated in Australia and listed on the ASX. It is a supplier of gambling and entertainment products divided into three main business divisions: wagering and media, gaming services, and Keno. Wagering and media is the dominant business division, contributing 85% of Tabcorp’s revenue and 73% of EBIT in the financial year ending 30 June 2016.
 Tabcorp’s Australian wagering operations include pari-mutuel (also known as totaliser or ‘tote’) wagering and fixed-odds wagering on racing, sports and other events. Tabcorp offers wagering services on-course and off-course, in agency outlets and third-party licensees in Victoria, New South Wales and the Australian Capital Territory. Consumers of wagering services may alternatively place bets with Tabcorp nationwide by telephone, and online via web-based applications and mobile apps. (Except where there is a material distinction, ‘online’ wagering includes wagering on smartphone apps, tablet apps, and web browsers on personal computers.) Tabcorp owns and operates a Northern Territory-licensed subsidiary Luxbet Pty Ltd, which is another nationwide platform for online and telephone tote derivative wagering and fixed-odds wagering. It also operates a computer-simulated racing product called Trackside in retail venues within Victoria, New South Wales and the Australian Capital Territory.
 Western Australian pari-mutuel wagering is operated by Racing and Wagering Western Australia (‘RWWA’), a publicly-owned body corporate with a statutory entitlement to conduct off-course totalisator wagering in Western Australia. Tabcorp provides pooling services to RWWA by combining the Western Australian pool with its own Victorian and Australian Capital Territory pools into one pool (‘SuperTAB’). The larger pool produces efficiencies for both RWWA and Tabcorp, and Tabcorp earns revenue from RWWA for provision of pooling services. Tabcorp also operates several international wagering-related businesses, including pooling arrangements with international wagering operators.
 The racing media operations of Tabcorp include the production and distribution of three Sky Racing television channels: Sky Racing1, Sky Racing2, and Sky Thoroughbred Central. Sky Racing broadcasts thoroughbred, harness and greyhound racing, and other sports, to licensed venues and pay TV subscribers nationwide. Tabcorp also broadcasts audio racing content via traditional wireless radio broadcasting (in its exclusive retail jurisdictions) and online nationally.
 The gaming services division supplies licensed venue operators with gaming systems and related services which assist in the operation of Electronic Gaming Machines (EGMs, colloquially known as ‘poker machines’ or ‘pokies’) and compliance with regulatory requirements. It does so under the brands Tabcorp Gaming Services, Intecq, and Odyssey Gaming. Tabcorp does not manufacture EGMs, nor operate venues with EGMs.
 Keno is a game of chance: in its common form, a consumer either selects numbers or is electronically provided them within the range of 1 to 80. Consumers win a return if a certain quantity of their numbers match some of 20 numbers drawn at random from the same range. Tabcorp distributes Keno products in licensed venues in Victoria, New South Wales, the Australian Capital Territory and Queensland, and in TAB agencies in Victoria, Queensland and the Australian Capital Territory. When compared with weekly lottery products, Keno prize pools are relatively small, but draws may be held far more frequently, even as often as once every three to four minutes.
 Tatts Group Limited is a public company limited by shares listed on the ASX. It is an Australian provider of lotteries, wagering services, and gaming products and services, with three corresponding divisions. The largest division is in lotteries, accounting for 72% of revenue and 65% of EBIT in FY 2016.
 Lotteries are generally a chance-based activity in which a distinct set of numbers is randomly drawn from a larger set of numbers; a player with a combination of those numbers, whether chosen by the player or automatically allocated, wins a prize. Tatts currently operates all public lotteries in all jurisdictions except Western Australia, which is yet to privatise both lottery services and wagering services. Not all lottery products are dependent on a future contingency such as a draw of numbers; Tatts also sells instant-scratch products, which are a pre-ordained set of winning and losing tickets within a print run. In South Australia, Tatts distributes Keno products via licensed premises in a similar manner to Tabcorp’s Keno business in other jurisdictions. Uniquely, Keno in South Australia is also distributed via a wider range of venues, including newsagencies, convenience stores, supermarkets and chemists.
 Tatts’ wagering operations include on-course and off-course pari-mutuel and fixed-odds wagering in Queensland, South Australia, Tasmania and the Northern Territory. Tatts also offers nationwide totalisator and fixed-odds wagering online and by telephone.
 Tatts broadcasts audio racing content via RadioTAB, an online and traditional wireless radio broadcasting service. Wireless broadcasting is largely confined to Tatts’ exclusive retail jurisdictions.
 Tatts’ gaming services are provided by two separate business units. Maxgaming provides EGM systems and services to venues in New South Wales, Queensland and the Northern Territory. Bytecraft provides repair and maintenance services to venues in all States and Territories except the Australian Capital Territory and Tasmania.
 As the subject of the proposed acquisition (but not the applicant), Tatts was given leave to intervene in the proceeding and it supported the proposed acquisition.
Competition between Tabcorp and Tatts
 There are a number of fields of endeavour in which the Merger Parties compete.
 The provision of retail wagering services in Australia is restricted to a single licensed operator in each State and Territory. Superficially, each jurisdiction has legislated to create a monopoly in the provision of retail wagering services, and therefore the Merger Parties do not compete with each other (or with any other entities) to provide retail wagering services. However, the Merger Parties do compete in the provision of telephone and online wagering services to consumers across Australia, alongside bookmakers including Sportsbet, CrownBet, William Hill, Ladbrokes, Betfair, Bet365, and Betchoice.
 The exclusive State and Territory licences to operate pari-mutuel and retail wagering are awarded on an infrequent basis, and for extended periods of time. Of existing arrangements, the Victorian licence is due to expire in 2024, or 2026 if an extension is taken up by the Victorian government. This is notwithstanding the expiration of the exclusivity period of the South Australian licence earlier in 2017; the Tribunal understands negotiations regarding any extension of exclusivity are ongoing, but Tatts retains the right to operate pari-mutuel and retail wagering in South Australia until 2100. The exclusivity period for Tasmania expires in 2027; for New South Wales it expires in 2033; for the Northern Territory it expires in 2035; for Queensland it expires in 2044; and for the Australian Capital Territory it expires in 2064. It is unclear whether the Western Australian licence will be open for tender before 2024, if at all. In the past, the Merger Parties have competed with each other, and with other entities, to acquire these exclusive licences.
 Tabcorp provides pooling services to RWWA. Additionally, both SuperTAB and Tabcorp’s New South Wales pool (‘NSWTAB’) are combined with international pools for greater scale and efficiency. Tatts does not provide pooling services to non-Tatts retail wagering jurisdictions, nor does it combine its pools with other international pools.
 Tatts does not produce visual racing media in competition with Tabcorp’s Sky Racing service. Tabcorp and Tatts compete to a limited extent in the nationwide online broadcast of audio racing calls and commentary. However, traditional wireless radio broadcasting is largely confined to each of the Merger Parties’ exclusive retail jurisdictions.
 Tabcorp and Tatts overlap in the provision of EGM services, particularly in Queensland, New South Wales and Victoria. As with wagering, the provision of EGM services occurs within the regulatory frameworks of each State and Territory. Both Merger Parties have several gaming operations. Tabcorp operates Tabcorp Gaming Services (‘TGS’) and eBet in Victoria and New South Wales, and Odyssey in Queensland. Tatts operates Maxgaming in New South Wales, Queensland, and Victoria; UBET in the Northern Territory; and Bytecraft in all States and Territories except the Australian Capital Territory and Tasmania.
 Treating Keno and lotteries as separate subjects, Tabcorp provides Keno services to consumers in Victoria, New South Wales, Queensland and the Australian Capital Territory, while Tatts provides Keno in South Australia. There is no overlap except to the extent that these services may be available online. The Australian Capital Territory licence to deliver Keno services permits online play, but the vast majority of consumers purchase Keno products in licensed venues.
 Tabcorp does not supply lottery products in any jurisdiction.
The proposed acquisition
 As will be clear from these Reasons, the Tribunal does not consider that there is any distinction in terminology between ‘merger’ and ‘acquisition’ when making its determination, and the terms are used interchangeably.
 Under a Merger Implementation Deed entered into by Tabcorp and Tatts on 18 October 2016, Tabcorp proposed to acquire the issued share capital of Tatts by means of a scheme of arrangement made under s 411 of the Corporations Act 2001 (Cth). The consideration offered for the transfer of Tatts shares to Tabcorp comprises a combination of cash and Tabcorp shares. At 8 March 2017, the transaction bore a value of approximately six billion dollars.
 Tabcorp submitted that the proposed transaction would combine the largely complementary businesses of Tabcorp and Tatts, producing a diversified Merged Entity operating in wagering and media, lotteries, Keno and gaming services. It was said that Tabcorp’s strengths lie in wagering, while Tatts’ strengths lie in lotteries, based partly on historical patterns of trade. However, all participants agreed that the Tribunal’s role is to look forward, not to the past. Historical matters are useful only insofar as they indicate future competitive practices.
 The proposition that Tabcorp and Tatts are complementary rather than competitive businesses found some support in the contributions made by each business unit to the current financial performance of the Merger Parties. In FY2016, Tabcorp earned $1.873 billion in revenue and $252 million EBIT from its wagering division (including racing media); $107 million and $41 million respectively from its gaming services division; and $208 million and $50 million from its Keno division. Tatts earned $610 million in revenue and $116 million EBIT from its wagering division; $211 million and $53 million respectively from its gaming services division; and $2.139 billion and $320 million from its lotteries division (including Keno). While large sums were earned by both Merger Parties from wagering and gaming services, a significant proportion of these were earned under exclusive licences held by one or the other party in various State and Territory jurisdictions. With respect to the supply of those services to consumers, the exclusive nature of these licences means that there is no competitive tension in the retail channel within their exclusive jurisdictions. This is not to dismiss the observation that the Merger Parties do compete head-on in the provision of some services in other channels, and in the bidding process for those exclusive licences.
 The proposed acquisition is not only dependent on Tribunal authorisation. It also requires approval by a relevant Federal or Supreme Court in accordance with s 411(4)(b) of the Corporations Act 2001 (Cth), various State and Territory regulatory approvals, and approval by Tatts shareholders.
Original request for informal clearance and role of ACCC
 A corporation must not directly or indirectly acquire shares in the capital of a body corporate if the acquisition would have the effect, or be likely to have the effect, of substantially lessening competition in any market: s 50. A corporation can only acquire merger clearance (as distinct from merger authorisation) by applying to the ACCC: s 95AD. The ACCC may grant clearance to a merger proposal, in which case s 50 no longer applies to prevent the acquisition: s 95AC.
 Prior to Tabcorp’s application to the Tribunal for merger authorisation, Tabcorp applied to the ACCC for informal merger clearance. The ACCC conducted a review of the proposed acquisition to determine whether it was likely to substantially lessen competition in a market. The ACCC published a Statement of Issues on 9 March 2017, expressing a preliminary view that several issues raised competition concerns. In its Statement of Issues, the ACCC reached no definitive conclusion as to whether the acquisition would result in a substantial lessening of competition in a market. However, in final submissions before this Tribunal, the ACCC proffered the view that the proposed merger should not be allowed.
 On 13 March 2017, Tabcorp applied to the Tribunal for merger authorisation. This had the effect of bringing the informal clearance request to the ACCC to an end.
 Upon the Tribunal receiving an application for merger authorisation, the ACCC has an important role, as recognised by the Act, in assisting the Tribunal. The ACCC also has an important regulatory role under the Act, and its views as expressed to the Tribunal must be given due weight having regard to this role. Nevertheless, it is the responsibility of the Tribunal to assess for itself all the information provided to the Tribunal and to make an evaluation on that basis.
 The Tribunal makes these further comments on the role of the ACCC. The ACCC’s statutory responsibility to assist the Tribunal in its determination involves making enquiries and providing a report to the Tribunal regarding the application for authorisation: s 95AZEA and s 95AZFA. It may also call witnesses, examine or cross-examine witnesses, report on statements of fact, and make submissions to the Tribunal: s 95AZF. In this respect, when the ACCC appears before the Tribunal, it occupies a different role to that of a traditional regulator. As regulator, it reaches its own conclusion regarding informal or formal merger clearance. When appearing before the Tribunal, the ACCC uses its resources and expertise to assist the Tribunal in an impartial manner, regardless of any conclusions it may have drawn from its earlier analysis in the clearance process. The circumstances of this application have required the ACCC to act first as regulator with the decision-making power that entails, and then transform into an adviser without the ability to make a determination. The transition from decision-maker to adviser cannot always be easy, but the Tribunal was grateful to receive the constructive contributions of the ACCC in this proceeding.
 The legal test by which the Tribunal makes its determination is not the test in s 50. Under s 95AZH, the Tribunal must not grant authorisation unless it is satisfied in all the circumstances that the proposed acquisition would result, or be likely to result, in such a benefit to the public that the acquisition should be allowed to occur.
 In support of its application, Tabcorp submitted witness statements from nine senior executives of Tabcorp and Tatts, expert reports from four consultant economists, and witness statements from 23 participants in the racing industry. The application was accompanied by an annexure entitled ‘Industry Background and Application Overview’ that was largely duplicative of the initiating application. A second annexure contained confidential tables of information in support of Tabcorp’s application, including financial information, take-out rates, key customers and suppliers, Tabcorp’s estimation of market concentration, and pricing information. A third annexure to the application provided similar information with respect to the Tatts business. Additional information was provided by Tabcorp during the course of the hearing, including information directed to be provided by the Tribunal at the request of the various participants.
Victorian Racing Interveners
 Racing Victoria Limited (‘Racing Victoria’) is the governing thoroughbred racing authority in Victoria. It is an unlisted public corporation established pursuant to the Racing Act 1958 (Cth) (‘Racing Act’). The Harness Racing Board (‘Harness Racing Victoria’) is a statutory body established under the Racing Act as the governing authority for harness racing in Victoria. Similarly, the Greyhound Racing Control Board (‘Greyhound Racing Victoria’) is established under the Racing Act to govern greyhound racing in Victoria. These entities were jointly represented and referred to collectively as the Victorian Racing Interveners.
 Generally, the constitutional or statutory objectives of these bodies include the promotion of their respective racing codes; supervising and managing the conduct of those in the industry; and providing support to Victorian racing clubs. PRAs such as the Victorian Racing Interveners seek to aggregate or otherwise coordinate the sale of media rights by racing clubs in pursuit of what they perceive to be in the best interests of the three racing codes in Victoria. In a sense, the racing clubs are the content providers for the wagering and racing media industries.
 In their application to intervene, the Victorian Racing Interveners noted that tens of thousands of people gain their livelihood from the Victorian racing industry; the Merger Parties are the two largest sources of Victorian wagering revenue and prize money for Victorian racing clubs; and that no Victorian industry representatives were included in the 23 witness statements provided by Tabcorp. The merger was said to affect the Victorian Racing Interveners because it would lead to a vertically-integrated entity with increased market power when bidding for racing media rights from the Victorian Racing Interveners. It was also said to reduce the competitive tension for the exclusive Victorian wagering licence, therefore reducing future returns to the industry.
 Racing Victoria, Harness Racing Victoria and Greyhound Racing Victoria were granted leave to intervene in the proceeding and opposed the proposed merger.
 CrownBet Pty Ltd is a bookmaker which supplies off-course wagering products nationwide via online and telephone betting. It is a competitor to Tabcorp and Tatts licensed in the Northern Territory under the Racing and Betting Act (NT), and operates as a subsidiary of Crown Resorts Ltd. Crown Resorts Ltd also owns Betfair Pty Ltd, the only betting exchange operator licensed in Australia.
 CrownBet sought leave to intervene with respect to wagering and racing media. Although companies related to Crown Resorts Ltd operate casinos that offer EGMs to consumers, CrownBet did not seek to intervene with respect to EGM services. Nor did it make a submission with respect to lotteries or Keno.
 The application to intervene submitted by CrownBet noted that the Tribunal would need to consider market definition and the competitive effects of the proposed merger in wagering and racing media. As a participant in these markets (as either a supplier or a customer), it was argued that CrownBet had a real and substantial interest in the proceeding. Although CrownBet had offered assistance to the ACCC, there was no scope for CrownBet to critically assess Tabcorp’s submissions during the informal merger clearance process, whereas an intervener in the Tribunal proceeding could lend assistance with its own submissions. No other bookmaker sought to intervene, but Sportsbet, Betfair, William Hill, Ladbrokes, Bet365 and Unibet provided letters in support of CrownBet’s application.
 CrownBet was granted leave to intervene in the proceeding and opposed the proposed merger.
 Racing.Com Pty Ltd began operating in August 2015 as a joint venture between Racing Victoria Limited (‘RVL’) and Seven West Media Limited. It supplies audio-visual racing content online and via free-to-air and subscription television. RVL (as distinct to Racing.com) also sub-licences Victorian thoroughbred content to bookmakers for use on their digital platforms.
 Racing.com seeks to acquire thoroughbred racing media rights from PRAs in Australia. As such, it is a competitor to Sky Racing when bidding for racing media licences. It recently competed with Sky Racing to acquire broadcasting rights from the Perth Racing Club, and was in negotiations to acquire South Australian broadcasting rights during this proceeding.
 Racing.com noted in its application to intervene that it was the only competitor seeking to disseminate racing media online and on free-to-air, digital and subscription television. It was suggested that the presence of Tatts was a counterweight to Tabcorp in racing media, even though Tatts did not participate in racing media, because Tatts’ retail network was an alternative customer to Tabcorp’s retail network for Racing.com’s product. The implication was that this gave Racing.com the confidence to bid for racing media rights, knowing that Tatts has no incentive to foreclose access by Racing.com to its retail network.
 Insofar as Tabcorp has both racing media and wagering operations, it has a degree of vertical integration that Racing.com does not. In the event of a merger, this vertical integration would encompass Tatts retail jurisdictions. It was said that a ‘nexus’ would arise between wagering and racing media rights that would constrain Racing.com from acquiring media rights in the future, and would foreclose competition for racing media rights more generally. Therefore, Racing.com had a real interest in the proceeding. The application also alluded to issues pertaining to the supply of racing media to third-party venues.
 Racing.com was granted leave to intervene in the proceeding and opposed the proposed merger.
24 As already referred to and attached to these Reasons as Annexure 1 is a Primer of Agreed Facts which contains, with two qualifications, the agreed framework relating to wagering, racing and racing media, EGM services, lotteries and Keno. These two qualifications are as follows.
25 First, in relation to paragraph 44(g), Tabcorp objected to Luxbet being included as one of the major corporate bookmakers in Australia. Tabcorp pointed out that the turnover of Luxbet is less than half that of the smallest of the other corporate bookmakers referred to in paragraph 44. With this observation in mind, it is true that Luxbet should not be treated as a major corporate bookmaker in Australia, although nothing turns on this particular qualification.
26 Second, in relation to paragraph 108, CrownBet suggested that sub-paragraph 108(a) read as “racing industry funding obligations (primarily contributed to be State TABs through product fees and State TAB racing payments under arrangements entered into as a condition of the grant of the exclusive totalisator licence and retail exclusivity in the relevant State or Territory)”. This wording was objected to by Tabcorp. Tabcorp suggested that sub-paragraph 108(a) read as “racing industry funding obligations (primarily contributed to be State TABs through product fees and State TAB racing payments under licences and racing industry agreements)”. Again, nothing turns on this particular debate.
27 The Full Court remitted the matter back to the Tribunal for failing to take into account a relevant consideration. The Full Court did not find that the Tribunal had applied the wrong law, nor did its judgment change the applicable law, although it clarified the appropriate methodology for the application of s 95AZH(1) when the Tribunal considers whether to grant authorisation under s 95AT(1).
28 The relevant legal principles were stated in Application by Tabcorp Holdings Limited  ACompT 1:
 The legal test by which the Tribunal makes its determination is not the test in s 50. Under s 95AZH, the Tribunal must not grant authorisation unless it is satisfied in all the circumstances that the proposed acquisition would result, or be likely to result, in such a benefit to the public that the acquisition should be allowed to occur.
 Section 50 prohibits a corporation from acquiring shares or assets if the acquisition would have the effect, or be likely to have the effect, of substantially lessening competition in any market. However, the Tribunal may grant authorisation to a person to acquire shares in the capital of a body corporate or acquire the assets of another person: s 95AT(1). The Tribunal may grant authorisation subject to specified conditions, including a condition that a person must make and comply with an undertaking to the ACCC under s 87B: s 95AZJ(1) and (2). If Tribunal authorisation is granted the prohibition in s 50 does not apply, provided the authorised acquisition is carried out in accordance with the conditions of its grant: s 95AT(2) and (3).
Test to be applied: s 95AZH
 The Tribunal must not grant an authorisation unless satisfied that, in all of the circumstances, the proposed acquisition would result, or be likely to result, in “such a benefit to the public that the acquisition should be allowed to occur”: s 95AZH(1).
 Section 95AZH(2) specifies certain matters to which the Tribunal must have regard in determining what amounts to a public benefit. If as a consequence of the proposed merger there is likely to be a significant increase in the real value of exports, or a significant substitution of domestic products for imported goods, the Tribunal must regard these as a public benefit: s 95AZH(2)(a). The Tribunal must also take into account, in determining what amounts to a benefit to the public, all other relevant matters that relate to the international competitiveness of any Australian industry: s 95AZH(2)(b).
 However, the Tribunal is not confined to these matters when considering whether such a public benefit has arisen that the transaction should be allowed. The expression “benefit to the public” has been interpreted broadly by the Tribunal since Re Queensland Co-operative Milling Association Ltd; re Defiance Holdings Ltd (1976) 8 ALR 481 (‘Re QCMA’) where the Tribunal said (at 510) that public benefit included:
anything of value to the community generally, any contribution to the aims pursued by the society including as one of its principal elements (in the context of trade practices legislation) the achievement of the economic goals of efficiency and progress.
A public benefit arises “if the benefit would not exist without the acquisition or if the acquisition removes or mitigates a public detriment which would otherwise exist”: Application by Sea Swift Pty Ltd  ACompT 9 at  (‘Sea Swift’).
 The Tribunal has previously adopted a modified total welfare standard when identifying and assessing public benefit: see Qantas Airways Limited  ACompT 9 at  (‘Qantas’). This means that the Tribunal has considered that gains flowing to only a limited number of members of the community may constitute a benefit to the public, but those gains will carry less weight than gains which flow to the community generally.
 In Qantas, the Tribunal considered whether ‘public benefits’ include the gains made by a domestic company’s foreign shareholders. Endorsing Re Howard Smith Industries Pty Ltd (1977) 28 FLR 385, the Tribunal emphasised that:
it is benefits to the Australian public, not to the overseas public, to which the Tribunal should have regard. However, the Tribunal noted the practical difficulties involved in limiting one’s consideration to benefits to the Australian public.
 The Tribunal in that instance concluded that supra-competitive returns and deadweight loss that accrues to foreign shareholders should be disregarded. However, returns to foreign shareholders of Australian companies would constitute a public benefit where they are re-invested in the Australian economy or result in further foreign investment in Australia: Qantas at .
 The method by which the Tribunal assesses the existence and weight of a public benefit was described in Sea Swift at :
A public benefit arises from a proposed acquisition if the benefit would not exist without the acquisition or if the acquisition removes or mitigates a public detriment which would otherwise exist. If a claimed public benefit exists, in part, in a future without the proposal, the weight accorded to the benefit may be reduced appropriately. Public benefit is a wide concept and may include anything of value to the community generally so long as there is a causal link between the proposed acquisition and the benefit: see Application by Medicines Australia Inc (2007) ATPR 42-164;  ACompT 4 (“Medicines Australia”) at , -. Benefits not widely shared may nevertheless be benefits to the public: Hospital Benefit Fund of Western Australia Inc v Australian Competition and Consumer Commission (1997) 76 FCR 369 at 375-377. However, the extent to which the benefits extend to ultimate consumers is a matter to be put in the scales: [Re AGL] at .
 Although s 95AZH does not explicitly refer to public detriment, assessment of public benefit does not occur in a vacuum. The Tribunal must have regard to “all the circumstances” in applying the authorisation test prescribed by the CCA. In Re Queensland Independent Wholesalers Ltd (1995) 132 ALR 225 (‘Re QIW’), the Tribunal said at 234:
The examination of “all the circumstances” must in our view involve the tribunal in an examination of matters of detriment, including anti-competitive detriment, in order to conclude whether in all the circumstances there is such a degree of benefit to the public that the acquisition should be allowed to proceed …
 Public detriments can include, but are not limited to, the reduction of competition resulting from an acquisition: Re QCMA at 512. They may include detriments other than those that relate to anti-competitive effects: Sea Swift at . Much like public benefits, public detriments are broadly framed to include “any impairment to the community generally”, including “any harm or damage to the aims pursued by society including as one of its principal elements the achievement of the goal of economic efficiency”: Qantas at , quoting Re 7-Eleven Stores Pty Ltd, Australian Association of Convenience Stores Incorporated and Queensland Newsagents Federation (1994) ATPR 41-357 at 42,683.
 The consideration of public benefits and detriments arising from a merger necessarily includes the competitive effects of the transaction. This includes consideration of the effects of the merger on the international competitiveness of Australian industry under s 95AZH(2). It also includes any other pro-competitive or anti-competitive effects in a market. The Act includes two definitions of a market: s 4E states that ‘market means a market in Australia and, when used in relation to any goods or services, includes a market for those goods or services and other goods or services that are substitutable for, or otherwise competitive with, the first-mentioned goods or services’. Section 50(6) is directly applicable to the prohibition in s 50(1) of acquisitions that would substantially lessen competition; it adds that ‘market means a market for goods or services in Australia, or a State, or a Territory, or a region of Australia’. Certainly, s 50(6) does not exclude the concept of substitutability, a concept to which the Tribunal will return.
 To assess competitive effects in a market, the market would normally need to be defined, or at least considered.
 In considering the competitive effects of any transaction, there is an emphasis on substitutability (amongst other factors) and the commercial context and the commercial realities relevant to the market and competition. Market identification is an economic tool or instrumental concept to analyse competitive behaviour. Any analysis will necessarily involve value judgements, as such analysis concerns human behaviour and commercial norms of behaviour.
 The Tribunal observes that the High Court of Australia has recently confirmed the principles relevant to market definition and any analysis of competitive behaviour in Air New Zealand Ltd v Australian Competition and Consumer Commission  HCA 21 (‘Air New Zealand’). At -, Kiefel CJ and Bell and Keane JJ stated:
 The authorities confirm that a market, within the meaning of the TPA, is a notional facility which accommodates rivalrous behaviour involving sellers and buyers. In Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd, Deane J, after noting that “[s]ection 4E confines ‘market’ for the purposes of the Act to ‘a market in Australia’”, went on to say that “‘market’ should, in the context of the Act, be understood in the sense of an area of potential close competition in particular goods and/or services and their substitutes”. Dawson J agreed generally with Deane J, adding:
“A market is an area in which the exchange of goods or services between buyer and seller is negotiated. It is sometimes referred to as the sphere within which price is determined and that serves to focus attention upon the way in which the market facilitates exchange by employing price as the mechanism to reconcile competing demands for resources”.
 Similarly, in Boral Besser Masonry Ltd v Australian Competition and Consumer Commission, McHugh J observed:
“[T]he market is the area of actual and potential, and not purely theoretical, interaction between producers and consumers where given the right incentive … substitution will occur. That is to say, either producers will produce another similar product or consumers will purchase an alternative but similar product.”
 Section 4E of the TPA proceeds upon the express footing that, notwithstanding the abstract nature of the concept of a market, it is possible to locate the market where the competition protected by the TPA occurs in Australia. Reconciling the abstract notion of a market with the concrete notion of location, so that they work coherently, presents something of a challenge. Particularly is this so because “competition” describes a process rather than a situation. But given that the TPA regulates the conduct of commerce, it is tolerably clear that the task of attributing to the abstract concept of a market a geographical location in Australia is to be approached as a practical matter of business. It is important that any analysis of the competitive processes involved in the supply of a service is not divorced from the commercial context of the conduct in question.
 At , Nettle J (whilst agreeing with Gordon J) stated as an additional comment:
 As the majority in the Full Court of the Federal Court (Dowsett and Edelman JJ) recognised, market definition is a question of fact. More precisely, it involves “a fact-intensive exercise centered on the commercial realities of the market and competition”. And, as a consequence, the definition of a market is liable to vary according to the purposes of the exercise undertaken.
 At -, Gordon J stated:
 Market identification is not a task undertaken at large, or in a vacuum. The task, and the extent of the task, are tailored to the conduct at issue and the statutory terms governing the contravention. The need to identify the market arises only in the context of determining whether the conduct constitutes a particular contravention of the TPA. That is, the question of whether there is a market “in Australia” is to be asked and answered in the statutory context in which that question arises. It is not to be asked or answered in isolation from that context or by looking only at what appears in s 4E of the TPA.
 The first step is to identify “precisely what it is that is said to have been done in contravention of the section”. As has been rightly said in the Federal Court of Australia, the court begins with the problem at hand and asks “what market identification best assists the assessment of the conduct and its asserted anti-competitive attributes”. Identifying a market is a “focusing process” which is “to be undertaken with a view to assessing whether the substantive criteria for the particular contravention in issue are satisfied, in the commercial context the subject of analysis” … .
 That approach recognises that the concept of a “market” is “not susceptible of precise comprehensive definition”. It recognises that market identification is an economic tool, or instrumental concept, that uses and integrates those legal and economic concepts best adapted to analyse the asserted anti-competitive conduct. It recognises that market identification is “not an exact physical exercise to identify a physical feature of the world” and that there is often little or no utility in debating or identifying “the precise physical metes and bounds of a market”. It recognises that market identification is “not a physical thing, or essence, which can be identified in a manner divorced from the relevant context”. And it recognises that market identification depends upon the issues for determination – the impugned conduct and the statutory provision proscribing anti-competitive behaviour that the conduct is said to contravene.
 That is not to say that a market can be identified arbitrarily. It must be based on findings of fact. “The premise of that proposition”, as the Full Court of the Federal Court said in Australian Competition and Consumer Commission v Australia and New Zealand Banking Group Ltd, is that the identified market “has economic and commercial reality”:
“It must accordingly not be artificial or contrived. Economists frequently construct economic models to analyse complex commercial or economic events or scenarios. But a model is unlikely to be a useful analytical tool if based on unrealistic assumptions that materially depart from the real world facts and circumstances involving commercial behaviour in which the events to be analysed occur.”
 The identification of the market must therefore “accurately [and] realistically describe and reflect the interactions between, and perceptions and actions of, the relevant actors or participants in the alleged market, that is, the commercial community involved”.
 Embedded in the “focusing process” is the recognition that the substantive criteria for a particular contravention in issue will depend on the particular statutory provisions. That process “may lead to the drawing of different lines in different circumstances depending upon the purpose of the provision in question”. In turn, that process may “lead to different market definitions in relation to the same industry” or even different markets within the same case. That potential was recognised more than 25 years ago by Professor Brunt, who wrote that “[t]here can be more than one ‘relevant market’ for a particular case, in the sense of markets that will attract liability”. There is nothing odd about that conclusion. As Professor Brunt pointed out, it reflects the fact that market identification “is but a tool to facilitate a proper orientation for the analysis of market power and competitive processes – and should be taken only a sufficient distance to achieve the legal decision”.
 Recognising that market identification is an economic tool has other important consequences. Economics is a social science and “does not furnish a body of settled conclusions immediately applicable to policy. It is a method rather than a doctrine, an apparatus of the mind, a technique of thinking, which helps its possessor draw correct conclusions”.
 The nature of economics as a social science is often highlighted by the existence of conflicting expert opinions about the identification of a relevant market. Deane J acknowledged as much in Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd, when his Honour said:
“The economy is not divided into an identifiable number of discrete markets into one or other of which all trading activities can be neatly fitted. One overall market may overlap other markets and contain more narrowly defined markets which may, in their turn, overlap, the one with one or more others.”
 When a court is required to draw its own conclusions about market identification, it is therefore inherent in that task – being one founded on economics as a social science – that the court will be required to make “value judgments about which there is some room for legitimate differences of opinion”. As a result, “[m]arket identification and definition is not an exact science. It is rooted in the analysis of commerce as an aspect of human behaviour”.
 However, in this proceeding, there has been no real contest as to market definition although the Tribunal will make some observations specifically relating to various areas of debate in this regard. As indicated, market definition is only a tool for analysing the extent of competitive constraints that apply to the participants engaging in the market.
 The Tribunal appreciates that care must be taken in the consideration of substitutability in any discussion of the concept of a market. Substitutability has never, as a matter of legal principle, been the sole criterion to consider in any debate in defining a market. As the plurality said in Air New Zealand at -:
 In QCMA the Trade Practices Tribunal explained that a market is “the field of actual and potential transactions between buyers and sellers amongst whom there can be strong substitution … if given a sufficient price incentive”. Later, in discussing the distinction between markets and sub-markets, it was said that:
“Where the defining feature of a market is the existence of close substitutes (whether in demand or supply), the defining feature of a sub-market is the existence of still closer and more immediate substitutes.”
 The Tribunal did not say that substitutability will be the defining feature of a market in every case. The passage takes as its premise that it is the defining feature for the question at hand.
 This is not to suggest that substitutability may not be an important, or even a decisive, factor in market definition in some cases, just as barriers to entry may be. It is rather that concepts such as market and cross-elasticity of supply and demand provide no complete solution to the definition of a market, as Dawson J observed in Queensland Wire Industries. Much will depend upon the context in which the question arises. The exercise of market definition needs to take into account the conduct in question and its effects, and the statutory terms governing the question.
 Gordon J (with Nettle J agreeing) made the following comments as to substitutability at -:
 As s 4E of the TPA relevantly provided, a market in relation to services includes a market for those services as well as other services that are substitutable for, or “otherwise competitive with”, those first mentioned services.
 In QCMA, the Tribunal said that “[w]here the defining feature of a market is the existence of close substitutes (whether in demand or supply), the defining feature of a sub-market is the existence of still closer and more immediate substitutes” (emphasis added). In Queensland Wire, Mason CJ and Wilson J referred to that oft cited passage in QCMA as explaining that “the defining feature of a market is substitution”.
 There are a number of points to be made about that statement in Queensland Wire. First, as the Tribunal itself recognised in QCMA, the existence of close substitutes is not the defining feature of every market. Second, as Dawson J pointed out in Queensland Wire, “[i]mportant as they are, elasticities and the notion of substitution provide no complete solution to the definition of a market”. Focusing too closely on the concept of substitutability can obscure the proper identification of the market and undermine the purpose of the relevant statutory provisions.
 As noted earlier, s 45 is concerned to promote competition. Relevantly, it is concerned to proscribe contracts, arrangements or understandings that contain a provision which has the purpose, effect or likely effect of “substantially lessening competition” by, for example, controlling the price for services supplied by a party to that contract, arrangement or understanding. And the competition that is to be promoted is competition in any market in which a corporation that is a party to the contract, arrangement or understanding supplies those services. In that context, questions of substitutability may be relevant but are unlikely to be determinative in the process of market identification.
 The proposition that questions of substitutability are not determinative is not limited to s 45. In the context of s 50 of the TPA, a substantial lessening of competition is assessed by reference to a range of matters. The extent to which substitutes are available is just one of those matters. Other matters relevant to an assessment for the purposes of s 50 include the height of barriers to entry to the market, the degree of countervailing power in the market and dynamic characteristics of the market such as growth, innovation and product differentiation.
 The Tribunal, to the extent that it has needed to consider the concept of a market, has been mindful not to limit itself to questions of substitutability, although this is an important consideration which in economic terms encapsulates, for instance, barriers to entry to the market and product differentiation. It will be apparent from these Reasons that the Tribunal has emphasised substitutability, but necessarily takes other factors into account as specifically identified.
 The Tribunal observes that market definition in Australian law can involve the application of the hypothetical monopolist test to measure substitutability. Put simply, if a small but significant non-transitory increase in price (‘SSNIP’) in one set of products leads consumers to substitute another set of products, then the market could be defined to include both sets of products. Dimensions of substitutability may include product characteristics, geographical limits, the functional level of the transaction, and the temporal aspect.
 The hypothetical monopolist test can, in some instances, be an over-simplification of complex market practices. First, it asks for consideration of consumer responses in aggregate, whereas different consumer sub-markets (or niches) can show very different responses to a SSNIP. Secondly, price takes on differing levels of significance in different markets. For instance, to raise the price even slightly would be to destroy the business model of products which have traditionally been offered for free, such as social media platforms or online search engines. The experts that the Tribunal heard from agreed that competition in wagering services takes place in both price and non-price terms. However, price usually remains the most objective lever to manipulate when considering substitutability.
 The ACCC’s position was that “[s]eparate relevant markets appear to exist” for wagering, gaming, lotteries and Keno. Therefore, any analysis of the proposed merger’s competitive effects needed to be performed separately for each of these product types. There was, perhaps, some indication of the substitutability of these different gambling products contained in the small amount of material tendered before the Tribunal with respect to problem gambling in Australia. The ACCC noted in its s 95AZEA report to the Tribunal that at least some consumers (problem gamblers) switch between different types of gambling product, rather than only participating in one. However, without further agitation of the issue, the Tribunal proceeds on the agreed basis that these product types are to be treated as separate markets.
 The Tribunal pauses here to mention the issue of problem gambling. The ACCC cited the Productivity Commission’s Inquiry Report into Gambling (2010), which estimated that the social cost of problem gambling was at least $4.7 billion a year. The Productivity Commission noted definitional difficulties with respect to ‘problem gamblers’, but concluded that the concept relates to people experiencing a cluster of significant harms. Those harms include health problems, financial distress, difficulties controlling gambling and psychological impacts.
 Wagering, EGM machines, lotteries and Keno are services lawfully provided under regulatory regimes. The merger does not of itself constitute an attempt to target problem gamblers with services that may be harmful if not used in a controlled manner. However, Tatts has the largest database of customers who engage in some sort of gambling through its user accounts. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX X] Several witnesses raised the possibility that the Merged Entity would have an increased ability to engage in customer profiling, targeted digital marketing and cross-selling of gambling products to customers on this database. These witnesses included Mr Tyshing of CrownBet, Mr Twaits (formerly of Racing Victoria and Betfair), and the ACCC’s economic expert, Mr Mellsop. The ACCC raised the possibility that increased profiling and promotional efforts would inevitably be received by vulnerable problem gamblers. Mr Joy of the Australian Lottery and Newsagents Association also raised concerns that the merger may lead to the increased availability of lotteries services to children and problem gamblers, and would certainly increase the prevalence of impulse purchases of lottery tickets.
 As a competition regulator, the ACCC may not be best-placed to assess the implications with respect to problem gambling of the Merged Entity having access to a more extensive customer database. Tabcorp’s economic expert, Dr Simes, addressed the issue most directly. Consistent with the need to balance benefits and detriments under the net public benefits test, Dr Simes concluded that increased consumer welfare outweighed the corresponding detriment from problem gambling, with Mr Mellsop agreeing.
 The net public benefits test must also compare the future with the merger and the future without the merger. According to Mr Cooke, Chief Executive Officer and Managing Director of Tatts, the database of approximately two million user accounts is largely made up of lotteries consumers. Mr Cooke also stated that Tatts had already tried to leverage that database to increase turnover in Tatts’ wagering operations. Whether or not that leveraging had been successful, it was occurring before merger authorisation was sought, and (if it brings commercial results) is likely to continue regardless of whether the merger occurs. There may be questions of efficiencies arising when the databases of Tabcorp and Tatts are merged, but the Tribunal saw no evidence that the intensity of profiling and promotional activity would increase because of the combination of those two databases, or that a larger database would cause problem gambling in the community. The Tribunal notes the broader concerns surrounding problem gambling, but also again notes that the merger does not target vulnerable members of the community, nor does it alleviate any service providers of their obligations under responsible gambling regulations.
Future ‘with and without’
 In applying the net public benefits test, the Tribunal has previously considered it useful to compare the likely future ‘with’ the proposed acquisition to the likely future ‘without’ the proposed acquisition. Citing Re QIW, this was described by the Tribunal in Application for Authorisation of Acquisition of Macquarie Generation by AGL Energy Limited  ACompT 1 (‘AGL’) at :
This test is not a “before and after” test but one in which the Tribunal is to appraise the future in which the acquisition does take place “in light of the alternative outcome, were the acquisition not to take place” …
 Conclusions as to the ‘future without’ (or ‘counterfactual’) necessarily require the assessment of several hypotheticals. The correct approach to the counterfactual is to determine, on the balance of probabilities, the most likely of those hypotheticals: Australian Competition and Consumer Commission v Metcash Trading Ltd (2011) 198 FCR 297 (‘Metcash’) at  (Yates J, Finn J agreeing).
Degree of satisfaction required
 As indicated already, the Act requires that the Tribunal not grant authorisation unless satisfied that the proposed acquisition would be likely to result in such a benefit to the public that it should be allowed to occur. Because it is expressed in the negative, in order to grant authorisation the Tribunal must be satisfied of an outcome that is, in all the circumstances, preferable to the outcome under the counterfactual.
 The Tribunal’s assessment must be based in the real world and not rest on speculation or theory alone: see Sea Swift at , citing Australian Gas Light Company v Australian Competition and Consumer Commission (No 3) (2003) 137 FCR 317 (‘Australian Gas Light Company’). It is the balance of public benefit and detriment with the merger, compared to the balance of public benefit and detriment under the counterfactual, which leads to the Tribunal’s conclusions.
 The Tribunal must be satisfied that “there is a real chance, and not a mere possibility” of the benefit or detriment eventuating: Qantas at -, citing Australian Gas Light Company; see also Re VFF Chicken Meat Growers’ Boycott Authorisation  ACompT 2 at . There must be a commercial likelihood that the applicant will act in such a way as to bring about the claimed benefits or detriments. Various options for achieving claimed benefits or avoiding claimed detriments, including any less anti-competitive options, may be explored and weighted appropriately: Qantas at ; AGL at .
 Claimed benefits and detriments must be of substance and have durability: see Qantas at ; see also Sea Swift at . They should be sufficiently capable of exposition, whether quantitatively or otherwise, rather than “ephemeral or illusory”: see Qantas at ; see also Sea Swift at . Any estimate as to their quantification should be robust and commercially realistic: see Qantas at ; see also Sea Swift at ; see also AGL at . The assumptions underlying claimed benefits or detriments must be spelled out in such a way that they can be tested and verified: see AGL at ; see also Sea Swift at -.
 As stated in Qantas at :
Whilst we recognise that public benefits are easy to assert, but are much harder to prove in advance of their creation, that does not deter us from demanding a high standard of commercial and social accountability in the estimates presented to us. Accordingly, we do not believe that there is anything to be gained by fanciful and speculative modelling of benefits where the underlying assumptions are not clearly spelled out, where the estimates have not been subject to rigorous sensitivity analysis, and where the estimating process is not wholly transparent.
 Nevertheless, in AGL at , the Tribunal stated:
The language of s 95AZH does not dictate mathematical precision. In practice it will often be the case that the factors going to the balancing exercise to determine whether the Tribunal has the necessary satisfaction as specified do not lend themselves to precise quantification. Even if precise quantification of the value of all competing benefits and detriments to the public cannot be made, the Tribunal is required to decide whether it has the specified level of satisfaction. If it does not, it may not approve the proposed merger or acquisition. If it does, it may do so. As the ACCC said in its final submissions, the Tribunal is called upon to make a robust and commercially realistic judgment, exposed by its reasoning process: cf Re Qantas at -.
 Finally, it is to be observed that even if the Tribunal is satisfied that the acquisition is likely to result in such a benefit to the public that it should be allowed to occur, the Tribunal has a residual discretion to refuse authorisation: Application by Medicines Australia Inc  ACompT 4 at - (‘Medicines Australia’).
29 The legal principles underpinning the Tribunal’s mandatory considerations were also described in Application by Tabcorp Holdings Limited  ACompT 1:
 Section 95AZG(2) sets out matters that the Tribunal is required to take into account in making its determination which include:
(1) any submissions in relation to the application made to it within the period specified by the Tribunal. Written and oral submissions were received from Tabcorp, Tatts, the ACCC, the Victorian Racing Interveners, CrownBet and Racing.com. In addition, the Tribunal received written submissions from Australian Leisure and Hospitality Group, Arana Leagues Club, Australian Hotels Association (National), Australian Hotels Association (Victoria), Australian Lottery and Newsagents Association, Community Clubs Victoria, Mr David Fowler, Mercury Group Victoria, Queensland Hotels Association, RWWA, Racing Clubs Tasmania, Responsible Wagering Australia, TAB Agents’ Association of NSW, Tasmanian Hospitality Association, and Victorian Off-Course Agents Association;
(2) any information received pursuant to a notice issued by the Tribunal under s 95AZC. Notices were issued to Tabcorp, and responses received;
(3) any information received pursuant to a notice issued by the Tribunal under s 95AZD(1). Notices were issued to Tatts, the Victorian Racing Interveners, CrownBet, Racing.com, and interested third parties including VicRacing, Ladbrokes, William Hill, Betchoice, Sportsbet, Betfair and Bet365;
(4) any information obtained from consultations under s 95AZD(2);
(5) a report by the ACCC provided to the Tribunal under s 95AZEA (received 27 April 2017); and
(6) any information or evidence provided to the Tribunal in the course of the ACCC assisting it under s 95AZF.
 The Tribunal has not canvassed individually each and every submission or piece of information provided to the Tribunal. However, the Tribunal has taken into account in the course of these Reasons the information and submissions provided to it. The vast majority of the content of the submissions and information provided to the Tribunal was covered in the submissions and information provided by the various participants at the hearing.
30 The Tribunal reiterates in these Reasons that the applicable legal principles and mandatory considerations remain unchanged from its earlier Reasons. We supplement these with the following observations regarding the proper approach to assessing claimed benefits or detriments.
31 The Full Court reiterated in ACCC v Australian Competition Tribunal at :
[t]he language of s 95AZH(1) of the Act requires the benefit to the public to result from, or be likely to result from, the proposed acquisition. Those words import a requirement of causation or probable causation.
The Tribunal must consider the claimed benefits and detriments that will be caused or probably caused by the proposed merger. Benefits and detriments that will or may arise in both the future with and without the merger are not relevant to the analysis. The claimed benefits and detriments must be of substance and have durability. Any estimate as to their quantification should be robust and commercially realistic. Together with the requirement of commercial likelihood, the necessity of substance and durability effectively means benefits and detriments must be material to the assessment of “such a benefit to the public that the acquisition should be allowed to occur”.
32 The Full Court did provide some guidance on the “balancing exercise” required. At , the Full Court stated:
Having examined the benefits and detriments resulting from, or likely to result from, the proposed acquisition, the Tribunal is then to determine whether the overall benefit is ‘such’ that the acquisition should be permitted. This requires a balancing exercise to determine the public benefit. The Tribunal has referred to this as a balance-sheet approach (Re Queensland Co-operative Milling Association Ltd (1976) 8 ALR 481 (‘QCMA’) at 512) and this is an informative metaphor. It may suggest, however, that the detriments are to be deducted from the benefits leaving only a net benefit. This is informative but may be likely to be a little unrealistic. Many of the benefits and detriments will be incommensurable and possibly unmeasurable as well. To take an example from this case: how does one weigh the improved efficiency of the wagering market against the perils of problem gambling? It seems to us that the benefits and detriments may more usefully be assayed by means of a process of ‘instinctive synthesis’ sometimes referred to in the law surrounding the formulation of criminal sentences where a similar problem is encountered: see Wong v The Queen  HCA 64; (2001) 207 CLR 584 at 611 - per Gaudron, Gummow and Hayne JJ. This may be referred to as weighing, but to refer to balancing, or a balance-sheet approach, may suggest that the essential qualitative assessment has a greater degree of precision than the statutory subject-matter permits.
33 The Tribunal makes some further observations on this reference to “instinctive synthesis”. The Tribunal must still identify, with as much precision as possible, each relevant detriment and benefit, and explain as far as possible, the balancing exercise undertaken by it.
34 As explained in Wong v The Queen (2001) 207 CLR 584, by Gaudron, Gummow and Hayne JJ at :
[T]he task of the sentencer is to take account of all of the relevant factors and to arrive at a single result which takes due account of them all. That is what is meant by saying that the task is to arrive at an “instinctive synthesis”. This expression is used, not as might be supposed, to cloak the task of the sentencer in some mystery, but to make plain that the sentencer is called on to reach a single sentence which, in the case of an offence like the one now under discussion, balances many different and conflicting features.
(Emphasis in original; footnote omitted)
35 The statement has been approved by the High Court on many occasions: see eg. Director of Public Prosecutions v Dalgliesh (a pseudonym)  HCA 41 at .
36 The other observation to make is that the nature of the benefit or detriment will influence the extent that such are commensurable or measureable. For instance, there is a method of making a more exacting determination as to the dollar value of cost savings, whereas, for example, the perils of problem gambling may not be easily quantified. In the case of cost savings, it will be apparent the Tribunal has considered all the specific evidence available and has then considered the evidence with the advantage of its own expertise and the submissions of the parties and participants.
37 The Tribunal makes an observation as to the concept of benefit to the “public”. The Tribunal observes that in ACT 1 of 2017, CrownBet stated in its submissions:
A “public benefit” is “anything of value to the community generally… The “public” is the Australian public. However, the more limited the section of the community that receives the benefit, the less weight it should receive. Thus, a firm’s cost savings can be a public benefit, but they will be given more weight if they are passed through to consumers than if they are retained by the firm’s shareholders.
38 However, CrownBet submitted that the Tribunal erred in its construction of the term “benefit to the public” in s 95AZH(1) of the Act in Application by Tabcorp Holdings Limited  ACompT 1. In particular, CrownBet submitted that benefits that only accrue to a limited section of the community cannot qualify as benefits “to the public”:
In some previous decisions, the Tribunal considered that benefits that only accrue to a limited section of the community could be benefits “to the public” (albeit they should be given less weight than gains that flow to the community generally). Thus, the Tribunal has considered that cost savings that will be retained by the merged entity may constitute public benefits. The Full Court’s reasons in [Australian Competition and Consumer Commission v Australian Competition Tribunal  FCAFC 150] might also be read as suggesting such an approach is legitimate.
That approach is erroneous. The plain meaning of “the public” is “the community in general” or “the people as a whole”. A benefit that accrues only to a limited class or group or people is not a benefit to the community “in general” or people “as a whole”. Indeed, construing section 95AZH(1) so as to allow a benefit that accrues to only a limited class of persons to be taken into account makes the words “to the public” in section 95AZH(1) superfluous. Such a construction would also be contrary to the object of enhancing the welfare of Australians “through the promotion of competition”. As the High Court has repeatedly observed, the purpose of the Act is “to promote competition, not to protect the private interests of particular persons or corporations”. What is relevant “is the flow-on effect … the effect on consumers”. Retaining cost savings rather than passing them on to consumers or the public generally (in the form of lower prices and/or improved services) indicates the existence of market power and an absence of competitive constraint – the antithesis of the object of the Act.
39 CrownBet also submitted that, by reason of the racing industry being a joint production partner in the supply of these services with the Merger Parties, it should not be considered a relevant part of the public for the purposes of ascertaining public benefits under the Act.
40 The ACCC, by contrast, accepted that the term “benefit to the public” does not exclude benefits retained by the Merged Entity, but rather submitted that such benefits should be afforded lesser weight through a “modified total welfare standard” as applied by the Tribunal in past determinations. It also noted that the Full Court did not conclude that the Act required application of the modified total welfare standard over any other measure: ACCC v Australian Competition Tribunal at .
41 The Tribunal’s preferred approach has already been indicated. The Tribunal does not need to delay in finally adjudicating on this controversy, as on either approach the result is the same in the circumstances of these applications. In other words, whatever approach is taken, the Determinations will be one and the same, and the different approach taken by CrownBet is immaterial to the outcome. This is primarily because the Tribunal is of the view that the acquisition will result, or is likely to result, in benefit to consumers generally because of an increased amount of competition. Additionally, there would also be a benefit to the racing industry in the form of increased product fees and by way of the benefits to shareholders from cost savings. We will elaborate on these matters later in these Reasons.
42 The Tribunal makes this further observation on this issue. The standard economic interpretation of “public benefit” is based on the “potential Pareto principle” and the effects of changes in market conditions are assessed on whether winners could potentially compensate losers and still be better off. The outcomes of perfectly competitive markets are therefore allocatively efficient because they leave no changes to the allocation of production or consumption that would allow such a “potential Pareto improvement”. Application of this principle in competition analysis means the costs and benefits incurred by, or accruing to, firms and consumers are weighted equally. Consequently, for instance, if a technological advance increases profits in an industry without initially changing prices, those profits are a public benefit, notwithstanding that they accrue only to the suppliers. If competition between suppliers subsequently means those profits are lost to lower prices and higher volumes of output, further net public benefits arise because consumers’ gains outweigh suppliers’ lost profits. Such analysis makes no distinction between the identities of the winners and losers, nor is it concerned about the end distribution of wealth and income that arises from market processes. Those redistributive issues are considered best addressed by political processes.
43 Competition is the process that drives market outcomes: prices and the quantities traded and their allocation between buyers and sellers. The strength of that process is measured by the extent to which it leads to allocatively efficient outcomes, i.e. the exhaustion of potential Pareto improvements. The competitive process may therefore encompass takeovers and mergers where this lowers industry costs. Conversely, mergers may lead to a lessening of competition by weakening the processes that ensure efficient outcomes, for instance, if a merged entity acquires and exercises the power to unilaterally and profitably increase prices. However, where a vigorous competitive fringe exists, the removal of a competitor, even a vigorous one, need not lead to a lessening of competition or the creation of competitive detriment.
44 The standard economic approach underlies the calculations submitted by Mr Mellsop and Mr Houston of the potential competitive detriment from hypothetical increases in wagering yields. Although their method could easily be extended to estimate the distribution of gains and losses between bookmakers and punters, their results are reported as unweighted, or equally-weighted, net losses.
45 The Tribunal does need to assess the public benefits of a merger slightly differently, first because assessment of public benefits may require the assaying of “incommensurable and immeasurable” benefits and detriments necessitating the use of a process of “instinctive synthesis” and, second, because it may be appropriate to apply the “modified total welfare standard” and weigh certain of the benefits and detriments differently, both to reflect the uncertainty of their realisation as well as their distribution between the Merger Parties and the wider public.
46 Putting aside the real benefit to consumers because of an increase in competition, the benefits claimed by Tabcorp and Tatts accrue directly to the Merger Parties in the first instance and are associated with secondary benefits to racing stakeholders and governments. It is clear that some of the benefits will accrue to the “public”, being parties other than Tabcorp and Tatts, but the direct merger benefits nevertheless also contribute public benefits for the purpose of the Tribunal’s assessment. Cost reductions free resources for use elsewhere in the economy and increased profitability generates benefits for Australian shareholders. Even if it created no benefits other than cost savings, a merger without detriments would still generate public benefits as long as those savings pass to Australian shareholders. Whether there are net public benefits (that is, “such a benefit to the public that the acquisition should be allowed to occur”) when there is also the possibility of a lessening of competition then depends on the balance of the cost savings against the magnitude of the competitive detriments. The Tribunal in these applications is of the view that there is not any real possibility of a lessening of competition, but on the contrary, an increased amount of competition is the likely result.
47 The Tribunal had received copious relevant materials for the purpose of reaching its Determination of 22 June 2017. The Tribunal made some preliminary observations on these in Application by Tabcorp Holdings Limited  ACompT 1. These observations still apply to the current applications:
 It is useful to make some preliminary observations.
 Merger control must be carried out with great care, because it involves a prediction of events which are more or less likely to occur in any given scenario, the substantive analysis being forward-looking. Significantly in this proceeding, the realities must be considered: it is unacceptable to proceed purely on the basis of theory. This is particularly the case in this proceeding where the wagering industry is in a state of change and various views have been expressed as to the future.
 There are different types of evidence or material that can be of assistance to the Tribunal. These include documents that were produced before the merger was contemplated, such as corporate strategy documents; documents produced for the purpose of the merger, such as planning and economic analysis; descriptive evidence from participants in the market, such as customers and competitors; written responses to requests for information from the Tribunal; and expert and quantitative evidence, as from industry experts or economists. To various extents, the Tribunal has had the advantage of considering each of the above types of evidence. Despite calls for more information by various participants during the hearing, the Tribunal considers that by the end of the hearing, it was in possession of sufficient information to make a determination in the terms of the statutory requirements.
 The Tribunal has allowed the interveners to take a very active part in the proceedings, recognising that they have an ability and an incentive to put before the Tribunal relevant material in opposition to the proposed merger. This opportunity given to the interveners has been availed of within the confines of the function and responsibilities of the Tribunal.
 By the end of the hearing, the Tribunal had before it a wealth of material provided by Tabcorp, Tatts, the interveners, other third parties and the ACCC. Whilst the Tribunal has an inquisitional role, with the assistance of the ACCC, and having regard to the role taken by the participants before the Tribunal, the Tribunal primarily relies upon the material specifically referred to by the participants and relied upon by them. These Reasons focus on what the Tribunal regards as the relevant and determinative matters for reaching a final decision on the application of Tabcorp.
 Various witnesses have been called to give evidence, and some have been cross-examined by various participants. The cross-examination has been confined – necessarily so because of the issues before the Tribunal, the function of the Tribunal, the responsibility of the Tribunal to proceed within statutory time limits, and the Tribunal’s own expertise to assess and evaluate for itself the material before it.
 Included within the witnesses heard by the Tribunal were a number of experts. Many matters of opinion were agreed by the time the experts provided their joint statements and appeared before the Tribunal, but a number of differences of opinion still remained between the experts as to the substantive issues. Each expert contributed to the debate, and provided to the Tribunal the various approaches that could be taken to the issue of competition and public benefit.
 At a very general level, the Tribunal observes that the various issues that arise in this proceeding require an evaluative approach by the Tribunal. There are many competing considerations, each of which may be valid, but which need to be considered in context and evaluated side by side. It is also to be remembered that the Tribunal needs to assess for itself the future of the wagering industry, based upon historical behaviour trends, various participants’ views as to the future, and the Tribunal’s own assessment of business incentives, practices, and behaviour. Whether one describes the current position of the wagering industry as ‘dynamic’, there is no doubt that the wagering industry has been in recent years, and will continue to be for the relevant time frame the Tribunal is considering, in a rapidly changing environment.
 It is useful for the Tribunal to indicate at the outset that the retail wagering model that has operated in Australia on a State and Territory basis is under threat as customer preferences move online and away from traditional pari-mutuel products to fixed-odds wagering. The question is not simply to determine whether as corporate entities Tabcorp and Tatts are businesses in decline. With the corporate bookmakers now on the competitive scene, the merger will enable Tabcorp and Tatts to compete effectively. The Tribunal will be returning in detail to these matters.
 All persons who gave information to the Tribunal presented that information based upon their experience, knowledge and own perspectives. In addition, those witnesses who presented evidence and were cross-examined similarly gave truthful evidence based upon their experience, knowledge and own perspectives. In many respects, the evidence given by industry participants and the parties related to future trends and predictions as to the wagering market. Many of the witnesses called by the participants had a material interest in proffering a particular view as to the future of the wagering industry and their part within that industry. This evidence must be weighed with the documentary material put before the Tribunal but, more importantly, must be considered by the Tribunal as an expert Tribunal entitled to evaluate the evidence based upon this expertise and experience. This is the reason the Parliament establishes tribunals such as the Australian Competition Tribunal. This is not to say the Tribunal ignores the material before it, or the invaluable assistance given by those participants in the industry, and the expert evidence relied upon in this proceeding. Whilst the Tribunal is not bound by the rules of evidence, it must formulate its views based upon relevant material put before the Tribunal. However, it is for the Tribunal to finally evaluate the different views given by various witnesses, viewed with the aid of the Tribunal’s own expertise and experience.
 The Tribunal accepts that, given the purpose of the Act and the subject matter the Tribunal is considering, a very important consideration of detriment or potential detriment will be any anti-competitive effects. Further, Tabcorp has a responsibility to place relevant information before the Tribunal to satisfy the Tribunal that the authorisation should be made. In considering both detriments and benefits, the Tribunal, in making an appraisal, must do so with an appreciation of the competitive functioning of the wagering industry, with and without the merger. To a large extent, the Tribunal is concerned with commercial likelihoods. In looking at the alleged benefits, it will be necessary to make certain predictions as to market behaviour and market performance of the companies involved and of the market or markets generally, with and without the merger.
48 The Tribunal also made some observations relating to lay witnesses, industry support for the application, expert witnesses, the regulatory environment, and the proposed conditions in Application by Tabcorp Holdings Limited  ACompT 1. Subject to the additional evidence and materials received as commented on below, these observations are still relevant to the applications before the Tribunal:
 The Tribunal received statements from each of the lay witnesses set out in Annexure 3 to these Reasons. Lay witness included officers and employees of Tabcorp, Tatts, and the non-Tatts interveners; competitors, customers, and suppliers of the Merger Parties; Principal Racing Authorities (referred to as ‘PRAs’); industry associations; and individuals with industry experience. Some gave oral evidence before the Tribunal.
 It is relevant to consider whether, in the views of industry participants, the proposed transaction is likely to yield benefits or be productive of harm.
 The evidence before the Tribunal from the racing industry and retail sector is overwhelmingly supportive of the proposed merger or does not actively oppose the proposed merger:
(1) With only one exception (Victoria), all of the State racing peak bodies support the proposed merger and have put evidence before the Tribunal to this effect. There is evidence before the Tribunal from Racing NSW, Harness Racing NSW, NSW Greyhound Breeders, Owners & Trainers’ Association, Wyong Racing Club/Provincial Racing Association of NSW, Racing Queensland, Brisbane Greyhound Racing Club, Albion Park Harness Racing Clubs, RWWA, Perth Racing, Thoroughbred Racing SA, Harness Racing SA, Greyhound Racing SA, Canberra Racing, Canberra Harness Racing Club, Thoroughbred Racing NT, Darwin Turf Club, Darwin Greyhounds Association, Australian Trainers’ Association, and Australian Jockeys’ Association.
(2) With respect to media rights, specifically, the proposition that the merger will impact on competition for such rights is expressly rejected by certain rights holders themselves. It is expressly rejected by Dr Forbes, CEO of Racing Queensland, Professor Yovich, CEO of Perth Racing, Mr Watters, CEO of Thoroughbred Racing SA, Mr Matthew Corby of Greyhound Racing SA, Mr Peter V’landys of Racing NSW, Mr Dumesny, CEO of Harness Racing NSW, Mr Vaughan Lynch of Tasracing, Mr Andrew O’Toole of Thoroughbred Racing NT, and Mr Gregory Aldam of Darwin Greyhounds Association.
(3) No State government has opposed the merger.
(4) With respect to retail venues, the proposition that the merger will be harmful to such venues is expressly rejected in the evidence of representatives from various peak hotel and clubs bodies, including Mr Stephen Ferguson of the Australian Hotels Association (‘AHA’) National, Mr Leon Wiegard of Community Clubs Victoria, Mr David Curry of Australian Leisure and Hospitality Group, Mr Patrick O’Sullivan of AHA Victoria, Mr Bernie Hogan of the Queensland Hotels Association, Mr Steve Old of the Tasmania Hotels Association, and Mr Ian Horne of AHA SA. An exception in this regard is the Registered Clubs Association of New South Wales (‘ClubsNSW’), which has recently entered into a commercial partnership with CrownBet.
 Tabcorp referred specifically as follows to evidence that reveals broad and reasoned support for the transaction:
(1) Brett Dixon, Chairman of the Darwin Turf Club: “I support the Tatts/Tabcorp Transaction because I consider that the Transaction is likely to lead to increased funding for DTC, which will in turn enable DTC to increase its investment in the Darwin racing industry”.
(2) Jim Watters, Chief Executive Officer of Thoroughbred Racing South Australia (‘TRSA’): “I believe that the merger has the potential to bring about significant benefits for TRSA and the South Australian thoroughbred racing industry”.
(3) John Lewis, Chief Executive Officer of Harness Racing SA: “HRSA believes that a merger of Tabcorp & Tatts Group is essential in ensuring that we have a viable harness racing industry into the future”.
(4) Matthew Corby, Chief Executive Officer of Greyhound Racing SA: “The merging of Tabcorp and Tatts will foreseeably result in a more competitive wagering market, evidenced by greater innovation, better product offering and enhanced service levels. That heightened competition will produce improved outcomes for wagering customers and act as a catalyst for greater customer choice … The synergies that the merged entity will be capable of realising will only serve to bring it into closer alignment with the circumstances of the online corporate bookmakers within the context of the greater cost and regulatory impositions under which Tabcorp and Tatts are required to operate. I believe that this will produce a healthier competitive environment generally that will drive stronger returns back to the racing industry and government”.
(5) Andrew Nicholl, Chief Executive Officer of Australian Trainers Association: “Increased prize money and funding for racing clubs would also allow [clubs] to improve the quality of facilities, with flow on benefits for the whole industry. As a representative of trainers, I consider these to be extremely positive features of the Proposed Transaction … In summary, while there will always be challenges with securing the necessary funding to sustain the immediate and longer-term future of the Australian racing industry, I believe the opportunity to anchor this objective exists with the Tabcorp/Tatts merger. There will also be benefits for the wagering public (particularly through product innovation and customer engagement) and industry participants as a result of greater capital investment, improved race club facilities and the prospect of further increases in prizemoney”.
(6) Andrew O’Toole, Chief Executive Officer of Thoroughbred Racing NT: “I support the Proposed Transaction for a number of reasons. These are set out in TRNT’s letter to the Australian Competition and Consumer Commission of 12 December 2016”.
(7) Luke Gatehouse, Chief Executive Officer of Brisbane Greyhound Racing Club: “I consider that the Proposed Transaction will strengthen the Queensland wagering operator and allow additional benefits to flow to the Queensland racing industry”.
(8) Dr Eliot Forbes, Chief Executive Officer of Racing Queensland: “I consider that the Proposed Transaction is likely to deliver better returns for the racing industry in Queensland …”
(9) Greg Aldam, Manager and Secretary of Darwin Greyhounds Association: “I consider the alignment of product offerings between Tatts’ and Tabcorp’s wagering operations will mean the merged firm is in a better position to compete with corporate bookmakers in the Northern Territory because Tabcorp currently has better product offerings than UBET, in particular for exotic bet types. I expect that the benefits of the Proposed Transaction will pass through to the greyhound racing industry in the Northern Territory as a stronger tote promotes the ongoing funding arrangements of the racing industry”.
(10) John Dumesny, Chief Executive Officer of Harness Racing NSW: “I consider that it is important that the Proposed Transaction proceed for the racing industry to remain sustainable. I do not consider that the Proposed Transaction will reduce competition in the wagering industry, and instead it will allow the merged company to compete with other large international wagering operators in Australia”.
(11) Peter V’landys, Chief Executive of Racing NSW: “[T]he health of the NSW thoroughbred racing industry is directly linked to the health of NSWTAB, due to the revenue it receives under the RDA and tax parity. A successful totalizator operator in New South Wales is essential to the ongoing viability of the NSW thoroughbred racing industry … For the reasons set out above, I am of the view that the Proposed Transaction will result in a significant increase in competition which is beneficial to both the consumers and to the NSW racing industry. This in turn will help sustain and potentially increase the economic and social contribution of thoroughbred racing throughout NSW”.
 The relevance of this evidence for present purposes is that it demonstrates a very general level of support for the proposed acquisition from a range of differently situated stakeholders around Australia. However, the Tribunal does not conclude that this in itself is suggestive of the fact that the proposed transaction has significant public benefits and no real public detriments.
 The Tribunal needs to determine the issues before it on the basis of all the evidence, material and analysis before it, including the submissions of the participants.
 Generalised statements of support for the proposed acquisition need to be carefully considered. Some PRAs have relied on presentations given by Tabcorp propounding the benefits of the proposed acquisition and this may well be the basis of their support. In some cases, such as Racing Queensland and RWWA, the PRAs have entered into arrangements with Tabcorp designed to protect the interests of those PRAs in the future with the proposed acquisition.
 Seven expert economist witnesses were engaged by Tabcorp, the ACCC, or the interveners. Each provided an individual report, and several provided individual responses to the individual reports of others. All experts were called to give evidence at the hearing.
 Other witness statements were accompanied by claims of expertise founded on experience. The Tribunal found it useful to equate ‘expert’ evidence with the technical evidence of economists, rather than equating it with the expertise of experienced industry professionals. These are distinctions of classification, rather than of the relevant weight that ought to be afforded to these statements by the Tribunal.
 Experts who provided reports include:
• Professor Flavio Menezes, University of Queensland, on behalf of Tabcorp;
• Dr Christopher Pleatsikas, Vice President of Charles River Associates, on behalf of Tabcorp;
• Dr Ric Simes, Senior Advisor of Deloitte Access Economics, on behalf of Tabcorp;
• Mr Patrick Smith, Partner of RBB Economics, on behalf of Tabcorp;
• Mr James Mellsop, Managing Director of NERA Economic Consulting, on behalf of the ACCC;
• Mr Gregory Houston, Partner of HoustonKemp Economists, on behalf of CrownBet; and
• Dr Tom Hird, Director of CEG Asia-Pacific, on behalf of the Victorian Racing Interveners.
 The parties agreed that the best course was to hear oral evidence from experts via four ‘hot tubs’ with distinct themes. Those four themes were ‘Consumer wagering’, ‘Bidding for licences’, ‘Racing media’, and ‘Public benefits’. Each hot tub constituted two Tabcorp experts, and two non-Tabcorp experts, as agreed by the parties. After an initial statement, experts were given an opportunity to respond to each other. The Tribunal and counsel followed with questions of their own.
 The Tribunal first heard from Dr Pleatsikas, Mr Smith, Mr Mellsop and Mr Houston with respect to competition in the consumer wagering market. Secondly, Dr Hird, Mr Mellsop, Professor Menezes and Dr Pleatsikas discussed bidding for licences, with a focus on the Victorian and Western Australian wagering licences. Thirdly, Dr Pleatsikas, Mr Smith, Dr Hird and Mr Houston participated in the racing media hot tub. Finally, Dr Simes, Dr Pleatsikas, Mr Mellsop and Mr Houston considered the existence and quantification of public benefits arising from the proposed merger.
THE PROPOSED ACQUISITION
Overview of the regulatory environment
 Wagering services in Australia may only be lawfully provided by licensed bookmakers. The most prominent licensed bookmakers in Australia include Tabcorp, Luxbet, Tatts, the Western Australian TAB (‘WA TAB’), Sportsbet, William Hill, Ladbrokes, CrownBet, Bet365 and Betchoice. The Tribunal received some submissions which noted the occurrence of unlawful wagering activity with foreign bookmakers, the subject of the Commonwealth Government’s Review of Illegal Offshore Wagering. However, the Tribunal received scant evidence of the scale of unlawful wagering, and could make no assessment of the impact of the proposed merger on the magnitude of such activity.
 Wagering services in Australia are provided on-course, via retail venues, online and by telephone. Each State and Territory in Australia has its own regulatory regime within which wagering operators are licensed to operate. These regimes regulate who may offer wagering services within the State or Territory; the circumstances in which those services can be supplied; the maximum revenue that operators may take from the sum of all wagers placed with that operator; the taxes that must be paid on wagering services; the products that may be offered by wagering operators; and the advertising of wagering services and products.
 The largest wagering services provider in each jurisdiction has traditionally been the licensed pari-mutuel (or totalisator) wagering service provider. All State and Territory governments have privatised their pari-mutuel wagering services provider, except for Western Australia. In each jurisdiction, only one pari-mutuel wagering licence has been issued. That licence generally lasts for decades: for example, the New South Wales and Queensland licences expire in 2097 and 2098 respectively. The Victorian licence is scheduled to expire before any other jurisdiction, in 2024 (or 2026 if extended within the terms of the current licence).
 The pari-mutuel licence in each jurisdiction generally also confers exclusivity over the provision of retail wagering services. However, the decision in Betfair Pty Ltd v Western Australia (2008) 234 CLR 418 (‘Betfair’) prevented State or Territory governments from denying consumers in that jurisdiction access to the online or telephone services of a bookmaker licensed in another jurisdiction, on the basis that such State or Territory legislation was in breach of the constitutional right to freedom of interstate trade. As a result, a bookmaker may acquire the least expensive wagering licence available in any jurisdiction in Australia, and provide online and telephone non-pari-mutuel wagering to consumers anywhere in Australia.
 Licensed wagering service providers who do not have a licence to provide pari-mutuel wagering services, nor a licence to provide retail wagering services, are known in Australia as ‘corporate bookmakers’. Luxbet (owned by Tabcorp), Sportsbet, William Hill, Ladbrokes, CrownBet, Bet365 and Betchoice are corporate bookmakers licensed in the Northern Territory due to the favourable licensing conditions and regulatory environment in that jurisdiction. As is apparent, licences issued in the Northern Territory are non-exclusive.
 The holder of the retail and pari-mutuel monopoly licence in Victoria, New South Wales, Queensland and South Australia is required to pay what Mr Cooke of Tatts refers to as ‘Product Fees’, what Mr Freeman of Tabcorp calls ‘racing industry agreement payments’, and what Mr Tyshing of CrownBet characterises as the “consideration payable for their exclusive totalisator licences and retail exclusivity”. ‘Race field fees’ apply to all licensed bookmakers in all jurisdictions in Australia. They are levied in return for the use in their wagering businesses of race field information compiled by State and Territory racing bodies. Because they apply equally, there is no relevant distinction in the levying of race field fees between the exclusive retail licensee and all other licensed bookmakers.
 As already alluded to, the current and future regulatory environment is rapidly changing, and likely to have to respond to legal and technological changes that have eroded the value of exclusive retail licences. State governments were previously able to exercise effective control over gambling by licensing wagering in retail venues (on-course, agencies, and licensed pubs and clubs) and to use the proceeds to support the racing industry and generate significant tax revenue for State Treasuries. After Betfair, State-based retail licensees were exposed to national competition both from each other and from corporate bookmakers via on-line and telephone wagering. Although this competition was initially limited, the advent of pervasive mobile internet access means wagering is now national and State governments are no longer able to control the level of turnover or returns to the racing industry or taxation solely through regulation of licensed bookmakers’ take-out rates. The future regulatory environment, including the terms of any bidding for retail licences, will have to adapt to this.
 As concisely explained by Mr Burt, Chief Executive Officer of RWWA in testimony:
Actually – and this is my firm view – I actually believe that the landscape has changed demonstrably from the lead-up period of around 2009/10 leading into the relicensing of the Victorian licence in 2012, [and] has changed dramatically to what it will be when it expires in 2024. The landscape [for] retail betting will be substantially low [sic] as a share of channel, pari-mutuel betting will be substantially lower, and the presence of competitive brands will be substantially different. So I think the relicensing conditions for governments to consider will be a lot more open and I think they will be a lot more complex and they will have to change the model or the way in which they approach it as less of an exclusive monopoly relicensing process and much more of an innovative approach [regarding] what conditions prevail at that time.
 The Tribunal will return to proposed conditions later, but it is convenient at this stage to mention some preliminary matters.
 The ACCC may accept written undertakings given by a person in connection with an application for merger authorisation – s 87B(1A). As the Act makes clear, the Tribunal may grant authorisation subject to specified conditions, including a condition that a person must make and comply with an undertaking to the ACCC under s 87B: s 95AZJ(1) and (2). The Tribunal can express conditions in other ways, and in framing those conditions it may seek assistance from anyone to whom it makes inquiries under s 95AZC and s 95AZD.
 Unless an enforceable undertaking is required as a condition of authorisation, the only recourse if a breach of a condition is identified would be for the ACCC or another party to:
(1) apply to the Tribunal for a revocation of the authorisation pursuant to s 95AZM(6)(b); or
(2) to commence proceedings in the Federal Court alleging a contravention of s 50, by reason of the operation of s 95AT(2) which provides that an acquisition is not in accordance with an authorisation if any conditions are not complied with (whether before, during or after the acquisition).
 Neither of these actions would involve directly enforcing the terms of the conditions imposed by the Tribunal when authorising the merger.
 The Tribunal accepts though that the prospect that authorisation would be revoked (which leads to potential exposure under s 50 of the Act) is a strong incentive for Tabcorp to comply with the conditions.
 Expressed broadly, s 95AZJ does not limit the discretion exercisable by the Tribunal solely to conditions framed as undertakings under s 87B. Nor is the Tribunal confined to accepting or rejecting conditions in the form in which the applicant, the ACCC or an intervener has presented them. However, as the ACCC rightly pointed out, the enforcement of behavioural conditions of authorisation may raise practical difficulties unless they are contained in an undertaking provided to the ACCC under s 87B.
 Nevertheless, it will always be a matter for the Tribunal to assess whether it is preferable that an undertaking be provided. In addition to providing for a direct and practical remedy for enforcing a condition given by way of undertaking to the ACCC, a form of condition that is dealing with ongoing matters may be better suited to be given by way of undertaking.
 The Tribunal also observes that the discretion to set conditions is not limited to factors relevant to the satisfaction of the statutory test for authorisation. The Tribunal in Medicines Australia at  decided that “in a case in which the proposal has satisfied the relevant public benefit test”, a discretion remained to impose conditions.
 For instance, conditions may be imposed to reduce the weight – relative to the likely public benefits – to be given to anti-competitive detriment if such detriment is likely to arise from the proposed merger. This is a relevant matter in this proceeding to consider in the context of (particularly) media rights and visual media, and Tabcorp’s Sky Racing Service. The Tribunal will address this in more detail later in these Reasons, but one point should be emphasised. The Tribunal should not just impose conditions to give comfort to potential competitors of the Merged Parties or impose conditions not likely to be required or be of any real impact in the future with the merger in place. For the reasons explained later, the Tribunal does not consider it should, or needs to, impose any conditions other than in respect of one matter upon which Tabcorp and ACCC had agreed that an undertaking should be made and complied with by Tabcorp, namely relating to the divestment of Odyssey.
 The Tribunal is of the view that the imposing of the conditions sought by some of the participants is not critical to the ultimate view the Tribunal has reached, namely that the proposed merger would result, or would be likely to result, in such a benefit to the public that the acquisition should be allowed to occur. In other words, without any of the conditions as suggested by various participants being imposed, the Tribunal has still reached the level of satisfaction required to determine that the merger should occur. Further, the Tribunal does not consider there is a need (in the exercise of any residual discretion) to impose any conditions other than the condition relating to the divestment of Odyssey.
Content of conditions
 With the exception of the ACCC, Tabcorp and the interveners participate in the markets under consideration by the Tribunal in this application. For its part, the ACCC brings a wealth of expertise in competition matters. On this basis the Tribunal notified participants that where possible it was preferable for conditions to be formulated by parties and interveners, rather than by the Tribunal itself. If the application presented concerns regarding detriments to the public, the Tribunal may find the conditions as formulated by participants to be a useful guide to their commercial practicality.
 In the Statement of Issues released on 9 March 2017 as part of its informal merger clearance processes, the ACCC had expressed a preliminary view that the proposed merger was likely to substantially lessen competition in Queensland for the supply of EGM monitoring and repair and maintenance services by combining Maxgaming and Odyssey Gaming (subsidiaries of Tatts and Tabcorp respectively). This concern was largely addressed before the hearing and the position of Tabcorp was that the Odyssey Gaming business in Queensland would be divested if authorisation was granted, and that this divestment should be a condition of authorisation, but no other conditions were necessary to meet the net public benefits test permitting authorisation. No doubt mindful of the Tribunal’s earlier suggestion that it would prefer to rely on conditions as expressed by participants, Tabcorp (on its own motion) submitted a number of additional conditions expressed in terms that Tabcorp found acceptable. These conditions related to the supply of Sky Racing to the providers of retail channel wagering, the supply of pooling services to RWWA and any future rival pari-mutuel wagering operator in Victoria, a commitment to dispute resolution mechanisms, and a commitment to compliance reporting.
 Suggested conditions were also received from the ACCC, Racing.com and the Victorian Racing Interveners. CrownBet made broad suggestions as to the objectives of which the Tribunal should be mindful if and when it turned its mind to conditions; however, it did not frame conditions with any specificity.
 Conditions suggested by the ACCC and interveners were directed to various potentially anti-competitive outcomes of the proposed merger. With respect to racing media, some conditions sought to prevent exclusivity in Tabcorp’s acquisition or supply of media rights, including the waiver of first or last rights of refusal when bidding for racing media content; others were directed towards avoiding the withholding of Sky vision from racing venues who promote wagering service providers in competition with Tabcorp. With respect to bidding for State and Territory licences, some sought to ensure that under future agreements PRAs would retain no less favourable share of wagering revenues than in current agreements; and others were directed to ensuring that any competitor who won a State or Territory bidding licence could combine their pool with that of Tabcorp in other jurisdictions on reasonable terms.
 The Tribunal received responses to some of these conditions from Mr Watters of TRSA, and from Professor Yovich, CEO and Managing Director of Western Australian Turf Club. These responses highlighted that, far from having the effect of constraining any anti-competitive conduct by Tabcorp, the suggested conditions had the effect of constraining PRAs from achieving the best outcome for their members and affiliates. These submissions emphasised that the respective PRAs already considered themselves capable of constraining the market power that the Merged Entity would have in future negotiations to acquire racing media rights because the PRA could set bidding conditions.
 The Tribunal shall return to these matters later in these Reasons.
The position of the Merger Parties
 Tabcorp outlined several public benefits which it is worthwhile to summarise here. First, it forecast the Merged Entity would deliver substantial synergies to the Merged Entity [XXXX XXXX XXXXX XXX XXX X XXX XXXXX XXXXXX XXXXX XXXX XXXX XXXXX XXX XXX X XXX XXXXX XXXXXX XXXX]. Secondly, while some of these synergies would be retained by Tabcorp, more than half would pass through to PRAs, third-party licensed venues, sporting bodies, and Federal and State governments. [XXXX XXXX XXXXX XXX XXX X XXX XXXXX XXXXXX XXXXX XXXX XXXX XXXXX XXX XXX X XXX XXXXX]. Thirdly, because PRAs are responsible for managing the ongoing financial strength of racing codes in Victoria, New South Wales, Queensland and South Australia, it was argued that the financial benefit to PRAs would maintain the viability of the racing industry [XXXX XXXX XXXXX XXX XXX X XXX XXXXX XXXX XXX]. Fourthly, greater investment in existing businesses and new product development would lead to enhanced customer experience. Fifthly, the Merged Entity would compete more effectively against other bookmakers, enhancing competition for the supply of wagering products and services. Sixthly, a national pari-mutuel wagering pool would be more efficient than two or more separate pools; the likelihood of national pooling would increase by removing the need for two separate and competitive commercial entities to negotiate a mutually beneficial outcome. Finally, the synergies would produce a consequential substitution of domestic products for imported products in such industries as tourism, improving the productive efficiency of the broader Australian economy as a result.
 Tabcorp did not concede that any detriment to the public would arise as a result of the merger.
49 Annexure 3 to these Reasons includes all the lay witnesses who have given statements in respect of the applications.
50 Following the Full Court’s judgment of 20 September 2017, further evidence and material was presented in the form of written submissions, affidavits, third party submissions, responses to Tribunal information requests, and oral testimony. This further material was largely (but not solely) directed to developments since the earlier Determination.
51 Affidavits in support of submissions were received from Christopher White, Group Operations Manager, Club Central; Timothy Wright, General Manager, Greenbank RSL Club and Board Member, RSL (Qld); Anne Tucker, General Counsel and Company Secretary, Tatts; Matthew Dean Zaba, General Manager: Legal and Regulatory, Tabcorp; Michael Warren Scott, General Manager, Secretariat and Shareholder Relations, Tabcorp; Nicholas Tyshing, Chief Operating Officer, CrownBet; James Mellsop, Managing Director, NERA Economic Consulting; Mr Patrick Brown, General Counsel and Corporate Affairs Manager, Ladbrokes Digital Australia; and Gregory John Houston, Partner, HoustonKemp Economics. Mr Mellsop and Mr Houston also submitted updates to their reports as submitted in respect of the first application.
52 Documents were supplied in support of the assertions made in these affidavits. These documents often took the form of board minutes, high-level strategy documents, performance data, details of regulatory changes, media releases and articles, and correspondence between industry participants.
53 Third party submissions were received from Jason Scott, Chief Executive Officer, Ladbrokes Digital Australia; Patrick John Brown, General Counsel & Corporate Affairs Manager, Ladbrokes Digital Australia; Adam Joy, Chief Executive Officer, Australian Lottery and Newsagents Association; Darren Pearce, Chief Executive Officer, Australian Turf Club and Member, NSW Racing Industry Consulting Group; David Fowler; Leon Wiegard, President, Community Clubs Victoria; Gregory Aldam, Manager & Secretary, Darwin Greyhounds Association; Matthew Corby, Chief Executive Officer, Greyhound Racing South Australia; Brett Dixon, Chairman, Darwin Turf Club; Vaughn Lynch, Chief Executive Officer, Tasracing Pty Ltd; Dr Eliot Forbes, Chief Executive Officer, Racing Queensland; Luke Gatehouse, Chief Executive Officer, Brisbane Greyhound Racing Club; Paul Innes, Chief Executive Officer, Australian Jockeys’ Association; David Jewell, Chief Executive Officer, Wyong Race Club and Chairman, Provincial Racing Association of NSW; Andrew Raymond O’Toole, Chief Executive Officer, Thoroughbred Racing NT; Peter V’landys, Chief Executive, Racing NSW; Professor John Yovich, Managing Director & Chief Executive Officer, Perth Racing; John Dumesny, Chief Executive Officer, Harness Racing NSW; and James Watters, Chief Executive Officer, Thoroughbred Racing SA Ltd.
54 Tabcorp received requests for further information from the Tribunal under s 95AZC, and responses were received. In response to further information requests made by the Tribunal under s 95AZD(1), evidence was received from Tatts, CrownBet and Ladbrokes.
55 Oral evidence was heard from Mark Schiavello, Head of Distribution Strategy and Transformation, Tabcorp.
56 The Tribunal will refer later to in these Reasons to any relevant changes that have occurred since 22 June 2017. However, having considered the evidence and submissions, and deliberated further, the Tribunal reiterates its views (as expressed in Application by Tabcorp Holdings Limited  ACompT 1) as to consumer wagering, wagering content and the nature of ‘price’ in the wagering market:
 It is helpful to consider the current state of wagering in Australia according to the outcomes the subject of the wager (the content), the types of wagering product, the distribution channels for wagering services, and the complexity of wagering products. Demand trends and supplier profiles are considered. Having engaged in this process, the Tribunal is then in a position to assess whether a substantial lessening of competition (and therefore a public detriment) will arise from the potential merger.
 The vast majority of wagering in Australia is placed on outcomes of the three racing codes (thoroughbred, harness and greyhound) and sports. Provided that a bookmaker is willing to offer odds on that outcome, and provided that it is not unlawful to provide wagering services on that outcome under legislation, regulations, or the terms of the bookmaker’s licence, a wagering consumer may place a bet on any contingency. Some limitations on the ability of bookmakers to offer wagering services vary by jurisdiction. For instance, Tabcorp noted restrictions on its ability to accept wagers on election results in New South Wales, while the Victorian Commission for Gambling and Liquor Regulation prevents Tabcorp from accepting wagers on Ultimate Fighting Championship events. However, the volume of wagering on these contingencies is very small, and these limitations therefore have very little impact on a bookmaker’s operations.
 As background, there is an important distinction to note between wagering on racing and wagering on sport. Sporting events seek to derive revenue primarily from attendance fees, sponsorships and licence fees for the broadcast of its events. The racing industry derives its revenue primarily from product and race field fees drawn from wagering. As a result, the racing industry and wagering service providers share a mutual dependence that does not exist to the same degree for peak sports authorities and sports clubs.
The concept of ‘price’
 Wagering services do not readily lend themselves to a discussion of ‘price’. One consumer may choose to place $2 on the favourite in a five-horse race, while the next may place $500 on the same horse, or on the rank outsider in a 22-horse race. Certainly, the value of the wager (or ‘stake’) placed by a consumer cannot be the price because, with the exception of extremely large bets that a bookmaker may refuse to accept owing to the increased risk, consumers can vary the stake as much or as little as their purposes require.
 The expected payout (or ‘odds’) is certainly a factor in descriptions of price for wagering services. But how are odds determined? Despite the terms being used interchangeably in many of the submissions to the Tribunal, price, odds, take-out and yield are all separate concepts.
 The economic experts commissioned by the ACCC and interveners relied on yield as a measure of price, following a standard practice in the economic analysis of gambling products, such as lotteries and poker machines, for which there is a clear link between the lottery organiser’s target take-out and the odds offered to the gambler to influence their decision to take particular gambles.
 In light of their obvious importance, the ACCC provided a useful summary of these price concepts as Annexure A to their closing submissions:
1. The concepts of price, take out rate and yield are central to understanding the competition issues in this case.
2. The assumptions provided by Tabcorp to Dr Simes define:
a) “Turnover” as the total amount of money staked by punters; and
b) “Revenue” as an operator’s return on gambling, which is equal to the total amount of turnover, less the value of any payouts paid.
3. Takeout rates and yield refer to the relationship between a wagering service provider’s level of turnover and revenue. In the context of pari-mutuel wagering, the amount of revenue earned by a totalisator operator is sometimes referred to as the “takeout”. The “takeout rate” is, therefore, the proportion of turnover wagered on a product that is kept – or taken out – by the wagering service provider as its fee for providing the wagering product to punters.
4. The opposite of the takeout rate is the “payout rate”. This is equal to the proportion of turnover wagered on a product that is returned (or “paid-out”) to punters in the form of winnings.
5. An equivalent concept often used in the context of fixed odds wagering is yield. Mr Johnston defines fixed odds yield as the proportion of turnover that fixed odds bookmakers retain after the payment of winnings. The statement of Mr Johnston also suggests that the term “payout” is relevant when describing the amount returned to punters who make fixed odds wagers.
 In reviewing the submissions, it quickly became clear to the Tribunal that the structure of racing wagering products meant that the links between operator take-out and the odds faced by punters were not direct, and that neither yield nor take-out could necessarily be interpreted as the price of wagering in the usual economic sense of a cost per unit of additional consumption, with all its attendant implications for consumer welfare and economic efficiency.
 The participants in this proceeding spent some time discussing whether price equates to the odds offered to a given consumer, or whether price is better considered to be the yield that bookmakers earn on their entire book in aggregate. Wagering is, essentially, both a financial product and an entertainment service. As a simple financial product, it may provide a rapid return on investment. For sophisticated wagering consumers, variations in odds offered by different bookmakers on the same outcome can be used as a hedging strategy.
 As an entertainment product, a consumer who places a losing bet (and therefore receives no financial benefit) still receives some utility from the thrill of the event, in the same way that a consumer who buys a cinema ticket leaves the cinema with nothing but the memory of the film’s events and an entertaining night out. But entertainment usually has a set price per event; the consumer wagers as much or as little as is required to provide the enjoyment sought. Potential suppliers use price to make an evaluative judgment as to whether to commence supply to that market. Potential consumers use price to make an evaluative judgement as to whether to enter the market to purchase that product.
 An individual consumer placing a single bet will not have enough information to make an assessment of the bookmaker’s yield. That single wager will be made as a function of the consumer’s assessment of the probability of a certain contingency, in the context of competitive offers from other bookmakers. At this level, the odds for each contingency appear to act as the price. Over time, repeat consumers may make an assessment of the yield provided by given bookmakers, and this may influence their choice of wagering service provider.
 Some wagering consumers are loyal to a single bookmaker, while others demonstrate agnosticism, particularly in online wagering where a consumer can efficiently select the bookmaker that offers the most favourable odds on a given contingency. Smartphone apps facilitate a timely comparison, and some corporate bookmakers offer best-odds products. Regular consumers may identify differences in yield that lead them to form a preference as to the competitive set of wagering service providers from whom they seek ‘quotes’ on a given contingency, but consumers buy a discrete product, rather than an ongoing stream of yield according to the bookmaker’s take-out. When one accepts that bookmakers run a business for profit and that the house (almost) always wins, there is a degree of irrationality in aggregate consumer behaviour. However, each individual consumer is discretely buying a potential reward based on a single contingency (or a combination of single contingencies, in the case of exotics, discussed further below).
 Therefore the Tribunal considers odds a better indication of price, and this will vary according to the vastly differentiated offers in the market. Differentiation occurs not only in the forms of wagering on offer: win, place, exotics, first goal, fastest ace, and so on. It also exists within each event, as a ten-horse race has ten possible winners, and an exponentially more complex series of contingencies when one considers possible combinations of place-getters. As will become clear, there is a direct link between the odds offered and the take-out in pari-mutuel wagering; the link may be less obvious to consumers in fixed-odds wagering, but it is critical to a sustainable bookmaker’s operations.
57 Having considered the evidence and submissions (including the further evidence and submissions), and deliberated further, the earlier conclusions of the Tribunal surrounding the different types of wagering products available and trends in the wagering market remain valid (if not reinforced):
Types of wagering product
 Tabcorp identified and defined four types of wagering product: totalisator (or pari-mutuel) wagering, fixed-odds wagering, tote derivative wagering, and wagering via a betting exchange. The ACCC accepted that this is a useful way to classify wagering services. No single operator offers all four types of wagering product.
 Totalisator (pari-mutuel) wagering occurs where all bets are pooled by a single operator, the operator deducts a set rate (known as the ‘take-out rate’) from the pool, and the remainder is distributed to winning customers. There is a single operator licensed in each State or Territory to provide pari-mutuel wagering in that jurisdiction. The Merger Parties are the only private corporations licensed to provide pari-mutuel wagering services in Australia; RWWA is a public body corporate with the only licence to provide pari-mutuel services in Western Australia.
 The revenue taken by a pari-mutuel wagering operator is used to meet its regulatory and commercial commitments. It is apparent that the operator of a pari-mutuel wagering pool bears virtually no risk; regardless of the outcome of a race or sporting contest, the operator takes its revenue from the total amount of wagering turnover by reference to a certain take-out per-centage. There are circumstances in which the take-out rate may be increased, but generally the take-out rate is restricted by licence conditions and regulations (which set a maximum) or by agreements between pari-mutuel wagering operators and PRAs (which set a minimum).
 Two conclusions may be drawn about the essential nature of pari-mutuel wagering. First, consumers are essentially betting against each other. As much was confirmed by the Executive General Manager of Commercial Development for Tabcorp, Mr Freeman, when discussing the attractiveness of pari-mutuel pools to premium customers who “want to bet into those pools because they’re effectively betting against losing punters”. At its extreme, if all consumers bet in a pari-mutuel pool for the same horse to win, then they cannot make a return on their wagering. Secondly, the corollary of a fixed take-out rate is uncertainty, on the part of both consumers and bookmakers, as to exactly what has just been purchased. Mr Freeman also provided support for this conclusion in noting that premium punters “want to win money off the losing punters and … to do that well, they cannot afford to be too much of the pool”. As both Mr Cooke and Mr Freeman noted in their statements, the larger the pool, the more even the distribution of funds wagered on each outcome, and the greater the stability between the quoted odds and the consumer’s payout.
 For pari-mutuel products, the operator is not directly in control of the odds faced by punters at the time they place their bets. Those odds will be “indicative”, reflecting the balance of wagers already in the pool and the predetermined take-out rate applied by the operator to the pool, and will vary as the pool grows if the new bets do not follow the distribution of prior wagers. The actual payout received for a winning bet is determined by the take-out rate and the balance of wagers at the close of bets and can be considerably different from the indicative odds displayed before the event, particularly if a relatively large wager is placed just before the close of bets. A pari-mutuel operator cannot set odds for particular wagers, but through the take-out rate does set the average yield on the event (or combination of events in the case of “exotic” pari-mutuel products such as a trifecta).
 A punter deciding to place a pari-mutuel wager therefore faces a price which comprises the indicative odds and an uncertain return that depends on both the probability of winning and the unknown pattern and quantity of other wagers into the pool after they place their bet. Punters cannot easily tell ex-ante what take-out rate has been set for a particular event, although once details of pool sizes became available it may eventually be clear to them that an operator had increased their take-out rate (and therefore raised the price/worsened the odds/increased their yield) on a particular pari-mutuel product. Although punters are therefore unlikely to react quickly to changes in take-out rates for pari-mutuel products, those rates are an important determinant of the long-run demand for pari-mutuel wagering.
 Pari-mutuel operators can influence odds and indicative payout by varying their take-out (and the risk-free yield on the event) but, since the take-out rate for a particular event is set before the pool opens, cannot use it to influence the quantity of wagers placed or compete with rival pari-mutuel operators (or other forms of wagering, such as tote derivatives and traditional fixed-odds wagers) for a higher share of wagers on a particular event. Pari-mutuel take-out is therefore unlikely to be a driver of short-run demand and turnover, although it will quickly affect revenue. Competition between operators for short-run pari-mutuel wagering is more likely to respond to non-price initiatives such as brand marketing and improvements in quality of service (eg simpler smartphone apps) and, where possible, direct price initiatives unrelated to payouts, such as loyalty rebates or bonus payouts.
 Although punters are unlikely to respond quickly to a change in the pari-mutuel take-out rate, such a change would eventually lead to a demand response, so that ex-post take-out rates (and the equivalent yield) can be used as measures of ex-ante prices of pari-mutuel products. Some caution still needs to be exercised when drawing inferences about the welfare consequences of changes in take-out rates in the short-term, but sustained changes in take-out rates can be treated as equivalent to a change in price.
 Fixed-odds wagering, as the name suggests, is a wagering service where the odds do not change from the moment the bet is placed to the completion of the event (and payment to winning consumers). With only minor exceptions for contingencies such as scratchings, a winning customer will receive payment that reflects the odds offered by the bookmaker at the time the bet was made.
 Bookmakers directly set the price of fixed-odds products through the odds offered on individual wagers. Those odds are the product of “balancing the book” on events for a given level of target take-out (as opposed to the fixed, risk-free take-out in tote wagering) and the bookmaker’s own assessment of the probabilities associated with event outcomes. Although bookmakers are able while building their book to vary their ex-ante target take-out, to encourage a larger turnover or attract market share, their realised take-out, and consequent ex-post yield, will depend on the outcome of the event.
 Unlike tote, where payout is uncertain, punters know their winning payout at the time they place their bet. However, they run the risk that the bookmaker might offer better odds later in the process of building their book. Again, there is no direct link ex-ante between a bookmaker’s target yield and odds, since odds may be varied to encourage wagers that help balance the bookmaker’s exposure on particular outcomes, even though the target yield remains constant.
 Realised yields will reflect the price offered to punters on average, but also the bookmaker’s success in assessing the objective odds of outcomes, in building a balanced book and in otherwise managing the risk in the portfolio of wagers placed with them. Even holding all of these factors constant, realised yield will vary from event to event for a given bookmaker simply as a result of luck – the random factors that mean even the most rational and sophisticated assessment of odds will not always successfully predict outcomes. Over time, with other factors constant, a bookmaker with higher target take-out rates would earn a higher average yield and their customers would be paying a higher price for their wagers (bet at worse odds/receive lower payout).
 Nevertheless, changes in fixed-odds yield can arise separately from the odds offered to punters. Consequently, caution is needed when drawing conclusions about odds offered, and the associated welfare implications, solely on the basis of realised fixed-odds yields when, as has recently been the case in Australia, bookmakers have been improving their book building and risk management techniques.
 All operators (the Merger Parties, corporate bookmakers, and traditional track-side bookmakers) offer fixed-odds wagering.
Tote derivative wagering
 In tote derivative wagering, a bookmaker without a pari-mutuel wagering licence sets wagering odds by reference to the final dividend (or odds) offered by the licensed operator of a pari-mutuel pool. For the consumer, pricing stability is not as certain as it is for a fixed-odds bet. However, a corporate bookmaker providing tote derivative wagering may make a promotional offer that increases the payout relative to the pari-mutuel payout, using expressions such as “tote plus five per cent”.
 It is apparent that consumers who prefer to bet against other consumers in the pari-mutuel pool may find tote derivative wagering an appealing substitute to pari-mutuel wagering. For a bookmaker, however, the risk profile of tote derivative wagering is similar to fixed-odds wagering. This is because a bookmaker offering tote derivative wagering does not derive revenue according to a set take-out (as in pari-mutuel wagering) and then pay out winning bets. Instead, the bookmaker must pay out winnings as determined by the final odds of a rival wagering service provider’s pari-mutuel pool. The best way to mitigate the risk is to try to ensure that the corporate bookmaker’s spread of bets closely matches the pari-mutuel operator’s spread of bets for that event, which in turn is best achieved by accepting the largest and widest possible spread of bets. However, the risk in providing tote derivative products cannot be eliminated in the same way that pari-mutuel pools eliminate risk.
 Betting exchanges match a customer’s bet with a directly opposing bet from another customer. For instance, in a ten-horse race, a wager that Horse A will win must be matched against a wager that Horse A will not win (rather than a wager that Horse B will win). This differs from pari-mutuel wagering because pari-mutuel wagering merely requires consumers to wager on a range of outcomes that cannot all occur. However, as with pari-mutuel wagering, the bookmaker acts as a customer-matching platform to take a commission without taking on risk.
 Tabcorp stated that Betfair is the only participant in betting exchange wagering in Australia. Tabcorp is also licensed to offer a betting exchange, but does not offer this product at present. Whilst Betfair did not make submissions to the Tribunal, Betfair and CrownBet are related parties: Crown Resorts Ltd owns 100% of Betfair and 62% of CrownBet.
 It was also clear to the Tribunal that the calculation of average yields across products was disguising important changes in the composition of the products offered and sold by the Merger Parties and corporate bookmakers and that these changes were being driven by the competitive adjustment of the wagering industry to new entrants and the rapid growth of online wagering. Whilst the take-out rate and yield are directly related for individual pari-mutuel products, average yield across a number of products with different take-out rates can vary with changes in the balance of turnover allocated to products. Therefore, when interpreting trends in average yields, care needs to be taken to distinguish changes due to variations in take-out for individual products types, and changes due to the mix of product types.
 Total national wagering expenditure has grown steadily for the past decade. In FY2006, total wagering turnover on racing and sports in Australia was $18.45 billion; in FY2015, it was $30.05 billion, having grown in every financial year. Tabcorp estimates that the compound annual growth rate (‘CAGR’) of total Australian wagering turnover from FY2001 to FY2015 was 6.3% per annum.
 The Tribunal received evidence of a number of significant trends in consumer wagering behaviour. The existence of these trends was generally accepted (notwithstanding some questions of nuance) by all participants and witnesses, including representatives of the Merger Parties, the ACCC, corporate bookmakers, PRAs and racing media. They fall within the topics of wagering products, content, channel, and bet complexity.
Types of wagering product
 Fixed-odds wagering and tote derivative wagering are increasing their shares of total wagering turnover, at the expense of pari-mutuel wagering. In the period 2001-2015, Tabcorp estimated that pari-mutuel wagering turnover in Australia grew at 0.1% CAGR, while fixed-odds racing wagering turnover grew at 17.2%, and fixed-odds sports grew at 14.2%. These trends meant that while pari-mutuel wagering in FY2001 accounted for 81% of all wagering turnover in Australia, this figure had declined to 35% in FY2015. In the same period, fixed-odds wagering turnover (including tote derivative products) increased from 19% to 63% of Australian wagering turnover. (The remaining 2% in 2015 is accounted for by Tabcorp’s computer-simulated race wagering product, Trackside.)
 The trend is not being driven by the performance of individual operators. Rather, it is consistent across the three pari-mutuel wagering operators in Australia. As reported in Tabcorp’s Annual Reports in FY2015 and FY2016, Tabcorp’s totalisator revenue declined by 2.1% and 4.4% per annum. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XX] The Chief Executive Officer of RWWA, Mr Burt, stated that wagering customers (in aggregate) are migrating from traditional pari-mutuel pools to fixed-odds betting products. In oral testimony Mr Burt stated that pari-mutuel pooling was “reducing over time” and that in 2024, when the Victorian licence was due to be awarded, pari-mutuel wagering would be “substantially lower”. Racing Victoria’s evidence showed that fixed-odds wagering eclipsed the popularity of pari-mutuel wagering (by turnover) between 2010 and 2015. [XXXXX XXX XXX XXX XXXXX XXX XXXXX XX XXX XXXX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XXX]
 A great cause for concern amongst pari-mutuel wagering operators is the risk of a vicious circle of reducing liquidity. Put simply, consumers are attracted to pools that provide stability of odds. The smaller the pool, the less stable the odds. The less popular pari-mutuel wagering becomes, the smaller the pool, and the more difficult it is for these bookmakers to convince consumers to choose pari-mutuel wagering over fixed-odds wagering. Mr Thompson of Racing Victoria noted that “liquidity is important in a pool to help address some of the decline”. Mr Attenborough of Tabcorp noted the “structural trend” away from pari-mutuel wagering. Mr Cooke of Tatts noted the risk of network effects exacerbating the decline of pari-mutuel:
The beauty of the licences we’ve got is … we can migrate our business from pari-mutuel to fixed price … we’re not beholden to one or the other. So we can deal with where the customer ultimately wants to go. But my personal view is… I think the tote will get to a position where it – where it plateaus out. The risk to that thesis is if the pool sizes aren’t sustainable and the liquidity drops away and then they keep declining.
 In the period 2006-2015, racing wagering turnover in Australia showed growth in each financial year, with a CAGR of 4% per annum. Sports wagering turnover showed a 14% CAGR, albeit from a smaller base. The impact of these different rates of growth in turnover was to lift sports wagering’s share of total wagering from 11% in FY2006 to 21% in FY2015. Tabcorp’s own sales data showed similar trends [XXXX XXXX XXXXX XXX XXX X XXX XXXXX XXXXXX XXXXX XXXX XXXX XXXXX XXX XXX X XXX XXXXX XXXXXX XXXXX XXXX XXXX XXXXX XXX XXX X XXX XXXXX XXXXXX XXXXX XXXX XXXX XXXXX XXX XXX X XXX XXXXX XXX]. Consumers can engage in wagering on events other than racing and sports, but turnover volumes are negligible.
 The Tribunal was presented with data showing that wagering on sports is relatively more popular amongst younger consumers, wagering on racing is relatively more popular amongst older consumers, and a significant proportion of consumers bet across both racing and sport.
 The licensed off-course, retail wagering model that has operated in Australia since the 1960s is being challenged by low-cost online business models, and by consumer preferences for online wagering. The operators of traditional retail channels must invest in online product delivery to compete with the primarily online business model of corporate bookmakers. This trend is important for at least two reasons. First, it has a direct impact on competition in the provision of consumer wagering services. Secondly, the value of the exclusive retail wagering licence in future will be dependent on the degree of consumer demand for wagering services in retail channels.
 From FY2001 to FY2015, Tabcorp estimated that the retail share of wagering turnover in Australia declined from 66% to 33%, while the share of online wagering turnover increased from 3% to 51%. [XXXXX XXX XXX XXX XXXXX XXX XXXXX XX XXX XXXX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X.] As mentioned, overall expenditure was growing strongly; despite the declining share of retail, retail wagering turnover in nominal terms actually increased by 1.2% CAGR in the same period. As a result, there was some conjecture about whether online and retail services are in direct competition with each other, or whether online bookmakers are introducing new consumers to wagering services. This question is revisited below.
 During the same period, telephone wagering declined from 18% to 10% of wagering turnover. The advantage of telephone services to provide in-play betting services was diminished when click-to-call functionality became unlawful. The Tribunal takes the view that without a regulatory advantage, it is difficult to imagine telephone wagering experiencing a renaissance against the speed and convenience of smartphone apps and websites.
 Mr Cooke summarised a commonly reported trend in wagering distribution channels:
The nature of the retail franchise has changed from when I started in the business in 1999 … [T]he pub and club network is the largest part of the footprint, and that is an important part of our distribution model, and I would see that as continuing. It’s part of the social fabric. You go to the pub, people tend to bet. It’s an activity people do in a more social environment, and that is where the retail network, in my view, will continue to be, you know, sustain itself in that type of environment. But it does come with more challenges as the digital devices are becoming more prevalent and people are betting more, you know, in a digital sense. So they will go to an outlet but they might be on a digital device and they might be betting with a competitor in a – in a pub or club.
 In response to these shifts, retail operators have implemented strategies to engender consumer loyalty to their wagering products when consumers are not in a venue, whether at home or anywhere else, via smartphone apps, websites and telephone. [XXXX XXXX XXXXX XXX XXX X XXX XXXXX XXXXXX XXXXX XXXX XXXX XXXXX XXX XXX X XXX XXXXX XXXXXX XXXXX XXXX XXXX XXXXX XXX XXX X XXX]. These strategies also attempt to counter the competitive effects of ‘multi-homing’: the use of rival apps or websites by a consumer within the same market. [XXXX XXXX XXXXX XXX XXX X XXX XXXXX XXXXXX XXXXX XXXX XXXX XXXXX XXX XXX X XXX XXXXX XXXXXX XXXXX XXXX XXXX XXXXX XXX XXX X XXX]
 ‘Exotic’ wagering occurs where a consumer places a bet on more than one contingency. A ‘multi’ is a type of wager where bookmaker permits a consumer to combine a series of single wagers (or ‘legs’) into one larger wagering product, with the odds multiplying with each additional leg. Each time a leg is successful, the dividend and original stake from that leg are wagered on the next leg. The combinations of exotics and multis offered, and the nomenclature, can vary from bookmaker to bookmaker. For the purposes of this proceeding it was not necessary to define these products in detail, and the Tribunal uses the terms ‘exotics’ and ‘multis’ interchangeably, notwithstanding the differences that they may imply to any individual bookmaker or consumer.
 ‘In-play wagering’ occurs where consumers place a wager after an event has started, allowing consumers and bookmakers to react to what is happening as the event unfolds. By definition, time is a restrictive factor for the provision of in-play wagering, although there is obviously less time pressure where there is a long period before the outcome of an event (such as a Test match or the Tour de France) is known. The online provision of in-play wagering is unlawful under ss 5, 8A and 15 of the Interactive Gambling Act 2001 (Cth), whereas the provision of in-play wagering via retail or telephone channels is not unlawful. Therefore corporate bookmakers can only offer in-play wagering via telephone. This was previously facilitated by ‘click-to-call’ functionality, where bookmakers used automated voice recognition, allowing consumers to place a bet more quickly. In 2016 conditions were imposed on the licences issued to corporate bookmakers, effectively prohibiting ‘click-to-call’ functionality, causing increased call-centre costs and decreases in the volume of wagers accepted within the limited window of time that in-play betting could occur.
 ‘In-play’ wagering, and the relative competitive advantage held by retail wagering operators compared to corporate bookmakers, was the subject of some attention during Tribunal proceedings. As with other subjects of possible future legislative change, including point of consumption (‘POC’) taxes and advertising restrictions, this discussion was useful to the extent that it informed the Tribunal’s view of the future with and without the merger. However, to the extent that the Tribunal was asked to consider factors that remain unchanged by the merger, the Tribunal was mindful not to allow its proceedings to be used for a collateral purpose.
58 The Tribunal observes that CrownBet noted that competitive detriment need not arise at the level of a market, however it remains important for the Tribunal to consider any substantial lessening of competition in a market:
The focus of inquiry as to competitive detriments under section 95AZH(1) of the Act is broader than that under section 50, because it is not limited to a lessening of competition to which section 50 might otherwise apply. However, whether the acquisition would result in a substantial lessening of competition is not irrelevant, particularly when a substantial lessening of competition has been alleged.
59 The Tribunal earlier considered market definition for the purpose of assessing any material lessening of competition in the market:
 In closing submissions, the Tribunal heard from Tabcorp of the “Australian online wagering market”; Tatts spoke of Sportsbet as the market leader in the “online wagering market”; CrownBet analysed the “relative market shares in sports wagering”. It is understandable that when considering the behaviour of consumers and suppliers, one looks for patterns that can increase one’s understanding, and it is easy to slip into the commercial language of a ‘market’ for wagering on the Melbourne Cup field, on smartphone apps, or for tote derivatives. But each of these statements is conclusory, and therefore unhelpful to the Tribunal’s task of legally defining markets.
 The Tribunal has already referred to the principles relevant to market definition as recently stated by the High Court in Air New Zealand. However, it is useful to refer to Metcash, where Yates J (Finn J agreeing) stated at -:
The seminal expression of “the market” for the purposes of Australian competition law is to be found in [Re QCMA] (1976) 25 FLR 169 at 190; 8 ALR 481 at 516-517, where the Trade Practices Tribunal said:
We take the concept of a market to be basically a very simple idea. A market is the area of close competition between firms or, putting it a little differently, the field of rivalry between them. (If there is no close competition there is of course a monopolistic market.) Within the bounds of a market there is substitution — substitution between one product and another, and between one source of supply and another, in response to changing prices. So a market is the field of actual and potential transactions between buyers and sellers amongst whom there can be strong substitution, at least in the long run, if given a sufficient price incentive. Let us suppose that the price of one supplier goes up. Then on the demand side buyers may switch their patronage from this firm’s product to another, or from this geographic source of supply to another. As well, on the supply side, sellers can adjust their production plans, substituting one product for another in their output mix, or substituting one geographic source of supply for another. Whether such substitution is feasible or likely depends ultimately on customer attitudes, technology, distance, and cost and price incentives…
The need to consider the possibilities of substitution in defining a market for competition law purposes is enshrined in the definition of “market” for the purposes of the Act …
 Relevantly here, markets are defined by reference to substitutability. In the experts’ joint report on wagering competition, there was general agreement that the ‘hypothetical monopolist test’ remained a conceptual basis for market definition for the purposes of the determination by the Tribunal.
 The ACCC submitted that the wagering market is highly complex and involves the provision of differentiated products. These differentiated products have varying degrees of substitutability along dimensions of wagering product type, channel, and geography. It remains to be considered whether there is or is not substitutability across these three dimensions.
Product type: demand-side substitution
 Product differentiation in consumer wagering was noted by the ACCC and interveners. For instance, the Tribunal was asked to consider the impact of the merger on ‘premium’ consumers: a very small number of high-value, high-volume professional operators who generally reside in foreign jurisdictions, will place wagers anywhere in the world, and are unlikely to switch from their preferred pari-mutuel products into fixed-odds products. Markets are not generally defined by the intrinsic characteristics of consumers, nor by the volume or value of their consumption (although the distinct functional levels at which customers operate may contribute to the definition). Despite the existence of ‘core’ customers such as premium punters, the Tribunal is of the view that a SSNIP in pari-mutuel wagering will lead to lower demand and profitability as consumers switch to fixed-odds, tote derivative, or betting exchange wagering.
 The Tribunal also takes the view that the market for consumer wagering products is not defined according to a preference for a particular distribution channel. There are many reasons for this conclusion. First, the availability of retail, telephone and online wagering is close to ubiquitous. Some consumers may prefer wagering in a social environment, or the convenience of a smartphone app, but if one channel was to experience a SSNIP there would be very little to prevent consumers acquiring wagering services via a different channel.
 Secondly, these channels offer very similar products. Most differences in products (such as the lack of tote offerings by the corporate bookmakers, or the lack of tote derivative offers in retail) are caused by the terms of statutory licences, not the nature of consumer demand. If corporate bookmakers want to supply pari-mutuel wagering products, they could do so by successfully bidding for a licence in any Australian jurisdiction. Thirdly, there were many reports of consumers entering a retail venue, watching the events on the venue’s televisions, and wagering via smartphone apps. The presence of online consumer behaviour in venues demonstrates a high degree of substitutability between retail and online wagering. Fourthly, Tabcorp, Tatts, Sportsbet and CrownBet consider the retail monopolies of the Merger Parties to be an advantage in recruiting multi-channel wagering consumers. The exclusive retail licensee has the commercial opportunity to convert retail consumers into online consumers of their own wagering products.
 Lock-in effects can lead to more tightly defined markets; they arise when a supplier is able to inhibit a customer’s ability to seek similar products from rival suppliers. For example, the operators of mobile telephone networks originally denied portability of a customer’s unique phone number to another network; as a result, consumers would have to take on a different number if they were to switch networks, and would need to engage in the time-consuming process of informing their contacts of the new number. The existence of lock-in effects is less likely where consumers can easily switch suppliers, and this is facilitated in consumer wagering by the adoption of ‘multi-homing’: the use by a consumer of more than one app or website offering similar products. Within the digital wagering channel, the number of bookmaker mobile apps used by consumers has increased [XXXX XXXX XXXXX XXX XXX X XXX XXXXX XXXXXX XXXXX XXXX] The presence of multi-homing behaviour signifies a lack of structural lock-in effects or consumer loyalty to a particular supplier, and is an indication of strong competition within a market.
 Demographic differences in preference for sports and racing wagering are accepted by the Tribunal. However, this does not lead to the conclusion that there is no substitutability between the two. Tabcorp’s own data showed that in some age groups up to [XXXX XXXX XXXXX XXX XX] of consumers wagered on both forms of content.
 Wagering complexity appears to appeal to a subset of wagering consumers. Exotics and in-play wagering are rightly seen as a particular configuration of standard wagering products, rather than separate product classes in their own right. While the yields offered for exotics show consistent differences to those of standard single-leg products, the Tribunal considers that this may be more a function of the probability of multiple contingencies arising, rather than a function of the odds having undergone a SSNIP without a demonstration of substitutability. Therefore, the wide array of wagering products are included within the single consumer wagering market.
Product type: supply-side substitution
 To some extent, different wagering products have different inputs, and competitive rivals vary in these capabilities. For instance, the systems involved in running a pari-mutuel pool and managing risk may differ from those required to run a fixed-odds book and manage the different types of risk faced. However, Mr Burt of RWWA rejected the proposition that experience in the operation of pari-mutuel pools is an important advantage held by the Merger Parties: [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX] Tabcorp, Tatts and the corporate bookmakers offer fixed-odds wagering, which is reliant on more complex systems and requires greater expertise than running a pari-mutuel pool. Therefore, the Tribunal considers that barriers to entry into pooling are low, and in a perfect market a SSNIP in pari-mutuel wagering by existing players would entice new entrants into the field. Government licensing restricts such entry, but this remains a relevant consideration when we turn to the process of bidding for licences.
 Systems and risk management capabilities will also impact on the ability of a bookmaker to commence supply of highly complex wagering products. This is considered in detail later in this determination, with respect to Tabcorp’s claimed revenue benefits. Certainly, capital and time must be invested in building systems capable of offering exotics with multiple permutations of legs and exit points (that is, ‘cashing out’). For his part, Mr Burt of RWWA stated that he believed that these capabilities are “easily replicated”.
 Distribution channels present another obstacle for new players who may wish to take advantage of a SSNIP. Even if regulatory frameworks preventing multiple retail operators were absent, it is clear that a large capital investment would be required to enter the retail channel. However, to the extent that retail operations or highly complex wagering products only require investments of capital and labour, and any new entrant can make such investments, the Tribunal does not consider that these systems represent a barrier to entry. This is particularly apt where specific potential entrants have been identified. Those specific entities include several well-resourced international corporations such as Sportsbet’s parent company, Paddy Power Betfair PLC (with ‘proforma revenue’ in its 2016 Annual Report of GBP £1,551 million), and domestic corporations such as CrownBet’s parent, Crown Resorts Ltd (with ‘normalised revenue’ in its 2016 Annual Report of AUD $3,585 million).
 The regulatory frameworks that prevent entry into the provision of pari-mutuel and retail wagering services constitute an insurmountable barrier to entry – but only when the tender process closes. This legislative obstacle operates for the duration of a licence, but does not operate to prevent rivals from bidding to win that licence, and therefore over the long-term the primary restriction to providing retail and pari-mutuel wagering services is access to enough capital to secure the licence.
 No arguments were mounted to the effect that a wagering operator in one type of content (such as racing) would not also supply wagering services for other types of content (such as sports or elections). While one can imagine an on-course bookmaker, as a sole trader, not offering sports wagering due to a lack of personal expertise, this is not to the point. Apart from a few local regulations that differ by jurisdiction, there is no structural barrier preventing the offer of wagering services on other content. Therefore, there is a high level of supply-side substitutability in the provision of wagering services by content.
 Clearly, each jurisdiction imposes a monopoly over the supply of retail wagering services. If wagering services could only be sourced from retail venues, this would restrict market definition to that jurisdiction. There was some conjecture about whether online and retail services are in direct competition with each other, or whether online bookmakers are introducing new consumers to the market that would not have otherwise visited a retail venue. If the two channels were so distinct that they operated in different markets, then geography would serve to limit market definition to each separate State and Territory under which exclusive licences are awarded. However, the Tribunal considers the various channels to be substitutable.
 The strength of online and telephone wagering operations, coupled with the ubiquity of online access via smartphones, tablets and personal computers, leads to the conclusion that the single retail licence cannot restrict the geographical definition of the market. As much follows from the decision in Betfair at -:
The evidence shows that there is a developed market throughout Australia for the provision by means of the telephone and the internet of wagering services on racing and sporting events … Within the Commonwealth the events may take place in one State, the customer be in another and the licensed bookmaker or TAB be in a third … The inhibition to competition presented by geographic separation between rival suppliers and between supplier and customer is reduced by the omnipresence of the internet and the ease of its use.
The apprehension expressed in the Report as to the operations of betting exchanges, with lower commission rates, upon the revenue streams derived by TABs and licensed bookmakers, is indicative of cross-elasticity of demand and thus of close substitutability between the various methods of wagering.
 The single licence issued by each jurisdiction for the supply of retail wagering services also confers exclusivity over pari-mutuel wagering services. However, this cannot constitute a monopoly in pari-mutuel wagering, because of the availability of online pari-mutuel wagering services from interstate suppliers. Again, the reasons in Betfair continue to apply, such that there is no relevant geographic restriction on competition in the provision of pari-mutuel wagering services in Australia.
Market definition: conclusions
 Tabcorp submitted that there is a single national market in Australia for the supply to consumers of wagering on horse races and other sporting events, comprising pari-mutuel, fixed-odds and tote derivative odds betting as well as wagering through a betting exchange. The ACCC agreed that this single broad market definition may be appropriate, although the market dynamics are highly complex. The joint expert report on wagering competition records that none of the experts disagree with the definition of a national market for the supply of wagering services, noting differentiation within that market according to forms of wagering product, channels by which wagers are made available to punters, and geographic locations for retail wagering. To this, the Tribunal adds that some differentiation exists in wagering content and complexity. Ultimately, the Tribunal agrees that consumer wagering occurs in a single national market.
Substantial lessening of competition
 The Tribunal is then in a position to assess whether the merger will lead to a substantial lessening of competition in that market, such that a public detriment will arise from the merger.
 By combining the market shares of each Merger Party, the Merged Entity’s share of turnover and revenue in the market will be aggregated [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX]. However, as stated in Qantas at :
It is a simple exercise to take a snapshot of a market at a moment in time and see a combined market share … However, such a snapshot tells us nothing about the conduct in the market leading to that market share, or about the potential dynamic interaction in that market with other competitors within the market who have either recently entered it or who have recently commenced an expansion of their activities in it.
 The Tribunal adopts this statement. A substantial lessening of competition in the consumer wagering market is not demonstrated by a snapshot of market share arising from the proposed merger.
 The Tribunal whilst mentioning market share makes the following observation. The Tribunal agrees with the proposition, put by Tabcorp, that a firm in a growing market cannot simply accept a continuing decline of market share on the basis that it is holding its historic revenues stable in absolute terms. The fact that this decline is driven in the two fields of endeavour in which the Merger Parties hold their exclusive licences – retail and pari-mutuel wagering – indicates that the business models of the Merger Parties will continue to come under substantial pressure.
 The distinctions between yields of various operators have already been noted, as have the reasons for those distinctions. The Tribunal does not conclude that yield is a definitive measure of the ability of suppliers to charge either a marginal cost price or monopoly pricing. Analysis of the details of Tabcorp’s Project Alfred is a case in point.
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 [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XX] Indeed, the economic theories of optimal taxation and pricing suggest that, for a fixed level of revenue in excess of marginal costs, overall consumer welfare can be increased if a supplier engages in price discrimination between distinct market segments, albeit at the likely risk of leaving some consumers worse off in the process. Even if revenue is allowed to increase, introducing a degree of price discrimination can allow an increase in total surplus (consumers and producers combined) because it reduces the deadweight costs associated with uniform pricing across distinct market segments. An increase in total quantity demanded after the price changes would generally indicate increased welfare.
Competition between Tabcorp and Tatts?
 The ACCC noted that fixed-odds and pari-mutuel wagering appear to be differentiated, and drew attention to the competition between Tabcorp and Tatts as the only two providers of pari-mutuel wagering in Australia (apart from RWWA, which is dependent on pooling arrangements with Tabcorp, and is therefore more of a partner to Tabcorp than a competitor). Once the market has been defined to include all types of wagering product, and not simply pari-mutuel wagering, it becomes difficult to describe any lessening of competition arising from restrictions on a segment of that market as ‘substantial’. With the introduction of tote derivative products, it may be doubted that Tabcorp and Tatts could ever really engage in any anti-competitive profiteering in pari-mutuel wagering. Even if it was possible, such conduct by the Merged Entity in pari-mutuel wagering will inevitably lead to substitution into fixed-odds products. The same comments apply to any submissions regarding the effect of the merger on the Merger Parties’ fixed-odds performance.
 Market definition guides the analysis, and having concluded that there is a market in which there are more participants than just the Merger Parties, it is appropriate that the analysis factors in all actual and potential suppliers to that market. As the ACCC suggested, there is good reason to consider whether the target of the acquisition is likely to be a vigorous competitor under the counterfactual, and more is said of this with respect to public benefits and merger specificity below. But analysis of the counterfactual is only necessary if analysis shows that the merger is likely to result in a detriment; and we can only reach that point if the Tribunal concludes that there will be a substantial lessening of competition in the market for consumer wagering services. Therefore, the starting point for competition analysis is the market, not a limited view of competition between the two Merger Parties.
Competition in wagering
 Mr Cooke expressed the view that many current demand trends are likely to continue into the future:
[It is] always difficult to go out that far, but, look, my view, in five years’ time, you will continue to see – and this is assuming all things stay the same – you will continue to see growth in the digital arena. I think that is something consumers are looking for… the convenience, the ease of use and the choice that the digital arena provides in… the wagering space, and I think digital will continue to grow strongly.
As I’ve – as I’ve mentioned in my evidence, I think there will be continuing decline in totalisator betting in the win/place arena, but I do think that will, as I mentioned, normalise at a point in time but there will be pressure on some of the minor codes and the night meetings, as I – as I mentioned…
I think the consumer appetite for betting on sport will continue to grow. I think – and the challenge for racing is its positioning in the product mix. I think there is a natural tendency for people to be attracted to betting on sport. It’s part of the everyday. It’s a simpler betting proposition and it is something that people are passionate about and the betting activity on that sort of fits hand in glove. The demographic, you know, the 18s to 45s, I mean, that’s the spot that they’re really operating in, and the wagering punter tends to be an older – older demographic, and more – you know, it’s been part of – part of their lives for a long time but the racing industry’s challenge is how it attaches itself to the younger market and I think that’s something the industry is grappling with and will continue to grapple with. But I think sport will continue to grow strongly. I think racing will have some challenges.
 The Tribunal agrees broadly with this view. Clearly, it has some ramifications for the business model adopted by the Merger Parties relative to that adopted by corporate bookmakers. Competition in Australia is a means to the end of protecting the interests of consumers rather than competitors in the market: Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd (1989) 167 CLR 177 at 191 (Mason CJ and Wilson J). However, the performance of rivals is relevant to the analysis, and particularly so when rivals have very different business models. The Tribunal received detailed submissions as to the current performance trends of all major wagering suppliers.
 The corporate bookmakers have collectively experienced rapid growth in the recent past. Tabcorp claims that as a group they have increased their turnover by 19.6% CAGR from FY2011 to FY2015, and now represent over 40% of total wagering turnover. Tabcorp also claims that the total marketing spend by corporate bookmakers has increased threefold in the same period. Intuitively this seems correct: in a rapidly growing market, it is natural for rivals to want to ensure that they build revenues and market share, so that when the market reaches maturity consumer behaviour favours them as an incumbent.
 However, corporate bookmakers must not be treated as a single entity. The fact that they collectively earn over 40% of turnover does not lead to the conclusion that they are able to constrain the Merger Parties through some sort of collective influence. They each have their own management, structures and strategies. The past six years has seen consolidation of wagering operators in Australia: Crown Resorts acquired Betfair, Ladbrokes acquired Betstar, William Hill acquired Tom Waterhouse.com, Centrebet and Sportingbet, and Paddy Power acquired Sportsbet. Notwithstanding Mr Freeman’s assertion that Tatts earns the second-largest wagering revenues in Australia, Sportsbet is in fact larger than Tatts on many metrics [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X]. Using turnover as the measure, medium-sized rivals in the Australian market include William Hill, Bet365, Ladbrokes and CrownBet [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX XXX]. Smaller rivals include Unibet/Betchoice, Luxbet (owned by Tabcorp) and Betfair.
 Each rival competes with the Merger Parties. They also compete with other corporate bookmakers. Even amongst rivals of similar turnover, differences in strategy are apparent. Some seek rapid growth at the expense of yield, while others opt to maintain yield and devote resources to marketing expenditure. The difference is enlightening because low yield is likely to appeal to a particular type of high-volume consumer, while the use of promotional campaigns such as brand advertising and ‘free’ bets appeal to different types of consumer.
 The different structural advantages and strategies of each competitor lead to differences in performance measures. As a crude summary of the operating profitability of each competitor, the Tribunal noted trends in EBIT before and after marketing and sponsorship costs were removed. CrownBet pointed out that one must be careful in using EBIT, because EBIT is not a good measure of market power or the relative profitability of different firms with different product ranges and cost structures, especially if they have high capital costs. In particular, if certain competitors incur promotional costs that are not accounted for by EBIT, the calculation may inflate their revenue disproportionately when compared to the revenue of other competitors. However, the Tribunal is tasked with considering the likely future with and without the merger, and with respect to future trends in both demand and supply. EBIT may still be used as an indicator of current profitability for all firms in the market, upon which the Tribunal may form a view as to the ongoing competitive performance of existing firms who may or may not represent a competitive constraint on the Merged Entity in the event of authorisation.
 Larger firms show remarkably consistent EBIT measures (with and without marketing and sponsorship costs) over the period FY2013 to FY2016. [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X.] Others showed marked changes in these measures, coinciding with new ownership (in the case of William Hill, Ladbrokes and Bet365) or new entry into the market (in the case of CrownBet). [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXXX.]
 These results indicate the margins that are available to the corporate bookmakers to invest in marketing in order to build demand for their fixed-odds products, and their market share relative to the Merger Parties. This is not to deny the importance of large promotional budgets for rivals without a retail network who cannot rely on convenience, a high street presence, or hospitality services to attract custom. But given that firms with a primarily online business model must attract consumers through marketing spend in the future, it is important for the Tribunal to draw a conclusion as to whether this expenditure is sustainable.
 The Tribunal agrees with Tabcorp that for many of the Merger Parties’ rivals, the combination of global scale, a lower cost base, and heavy investment in marketing and promotion has delivered very significant growth in turnover for corporate bookmakers over the last decade [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX]. The Tribunal considers Tabcorp’s application to be consistent with the larger trend to industry consolidation which has been seen to occur repeatedly in the recent past, and was spoken of by Mr Barry of Sportsbet in March 2016:
If you look at any e-commerce sector there’s typically only one or two dominant players – there’s only one Facebook, there’s only one Google, one Amazon. I don’t think there’s any reason why online betting doesn’t end up in the same place … There’s a really, really material gap now between the likes of Bet365, Paddy Power/Betfair at a global level and what are effectively becoming small local players like Tabcorp and Tatts … As technology gets more sophisticated, the investment required to create that quality product increases.
The Tribunal does not necessarily share the view that there will only be “one or two” wagering rivals in Australia in the medium-term. However, it does anticipate ongoing consolidation.
 More importantly for the sake of this analysis, the Tribunal takes the view that there will not be a substantial lessening of competition in the consumer wagering market as a result of the proposed merger. In this respect, no detriment to the public is likely to arise.
60 The Tribunal’s considerations and reasoning regarding material lessening of competition in the wagering market remain unchanged from its earlier Reasons in Application by Tabcorp Holdings Limited  ACompT 1.
61 We make the following observations in that regard. First, while competition between Tabcorp and Tatts, now and in the likely future without the merger, is important to the assessment of the impact of the merger, it needs to be viewed in the context of the whole market (and relevant market segments thereof) and other competitors. The loss of competition between the Merger Parties may not be material if there are strong competitive processes driven by other rivals.
62 Second, the word “substantial” was the subject of considerable argument before the Full Court. The Tribunal made it clear that it was not applying the test in s 50 of the Act: see Application by Tabcorp Holdings Limited  ACompT 1 at . The use of the word “substantial” (with the benefit of hindsight) was unfortunate. Other than when the Tribunal referred to “substantial” in the context of s 50, the term “substantial” should be read and should now be read as “material” (see Application by Tabcorp Holdings Limited  ACompT 1 at ,  (and its preceding heading), , , , , , , , , the heading preceding , and ). As the Full Court observed at , care is required in the use of the words “of substance” or “substantive” lest they suggest a connection with the enquiry under s 50. The Tribunal – in relation to detriments – used the term “material detriments” (see Application by Tabcorp Holdings Limited  ACompT 1 at ), and will continue to use that term as indicating the notion of a detriment of substance or materiality in the context of the focus of s 95AZH(1) and the weighing up of detriments and benefits. Equally, in the context of competitive detriment, the phrase “material” will include any non-trivial competitive detriment which will result, or would be likely to result, from the acquisition. Of course, we reiterate that the Tribunal is not only concerned with competitive benefits and detriments.
63 Finally, in respect of the state of competition in the market for the provision of wagering services, the Tribunal reiterates in particular its acceptance of Mr Barry’s evidence anticipating ongoing consolidation, without coming to a conclusion as to exactly how many providers there will be at any given point in the future. Suffice to say, in the Tribunal’s preferred counterfactual, the wagering services industry is likely to undergo further consolidation over the medium term.
64 The ACCC and CrownBet structured their submissions regarding competition between the Merger Parties in terms of totalisator products and fixed odd products due to the alleged lack of substitutability between these products. We address each of these in turn below. However, we begin with some preliminary remarks.
65 The starting proposition seems to be that if a rival is removed, a detriment prima facie arises. The ACCC contended that ‘the mere fact that totalisator products and fixed odds wagering products are provided in the same market does not enable a conclusion to be drawn that the removal of Tabcorp’s only principal competitor in the provision of totalisator products (ie, Tatts) will not have an anti-competitive effect.’ This reasoning over-simplifies the analysis. The Tribunal makes no conclusion as to the presence or absence of detriment until it has considered the constraints supplied by all competitors, product differentiation, consumer trends, supplier constraints, and the geographic presence and channels available to each rival.
66 We also note that this is an area in which the Full Court found error with the Tribunal’s earlier approach. Tabcorp described the Full Court’s assessment of the omitted relevant consideration in the following manner:
The Full Court described the ACCC’s argument as to detriment in the wagering market (which the Full Court found that the Tribunal had overlooked) at  as follows: the ACCC submitted that if the merger proceeded, the merged entity would no longer be constrained by Tabcorp in setting its pari-mutuel take-out rate in Queensland, Tasmania, South Australia or the Northern Territory and that it would be able to increase that rate to its legal maximum in an unconstrained fashion. This argument was reflected in the ACCC’s written closing submissions at  –  and addressed in Tabcorp’s written closing submissions including at  – .
Tabcorp does not understand the Tribunal to have overlooked the ACCC’s argument in its decision. In particular, Tabcorp understands that the Tribunal responded to this argument in the way in which it considered questions of market definition and therefore whether competition between Tabcorp and Tatts was of any significance. In this regard, in the Tribunal’s consideration of market definition, the Tribunal relevantly found that there is demand side substitutability between pari-mutuel wagering products and a wide variety of other wagering products included within the single wagering market. At , the Tribunal held that an SSNIP in pari-mutuel wagering will lead to lower demand and profitability as consumers switch to fixed odds, tote derivative, or betting exchange wagering.
The Tribunal also found that there is supply-side substitutability in the provision of pari-mutuel wagering products and other wagering products. In this regard, it held at  that the merger parties and the corporate bookmakers offer fixed-odds wagering which is reliant on more complex systems and requires greater expertise than running a pari-mutuel pool and that barriers to pooling are low, and also held at  that if corporate bookmakers want to supply pari-mutuel wagering products they could do so by successfully bidding for a licence in any Australian jurisdiction. Relatedly, the Tribunal found at  –  that corporate bookmakers would have a strong interest in participating in the bidding processes for both the Victorian and Western Australian licences and rejected the argument that alleged disadvantages would prevent them from doing so.
Then, the Tribunal at  said that:
The ACCC noted that fixed-odds and pari-mutuel wagering appear to be differentiated, and drew attention to the competition between Tabcorp and Tatts as the only two providers of pari-mutuel wagering in Australia (apart from RWWA, which is dependent on pooling arrangements with Tabcorp, and is therefore more of a partner to Tabcorp than a competitor). Once the market has been defined to include all types of wagering product, and not simply pari-mutuel wagering, it becomes difficult to describe any lessening of competition arising from restrictions on a segment of that market as ‘substantial’. With the introduction of tote derivative produces [sic], it may be doubted that Tabcorp and Tatts could ever really engage in any anticompetitive profiteering in pari-mutuel wagering. Even if it was possible, such conduct by the Merger Entity in pari-mutuel wagering will inevitably lead to substitution into fixed-odds products. The same comments apply to any submissions regarding the effect of the merger on the Merger Parties’ fixed-odds performance.
There is then reference in  to “the counterfactual”, and reference to a “substantial lessening of competition”. Tabcorp understands the reference to “the counterfactual” to be a reference to a counterfactual relevant to competition between Tabcorp and Tatts only (as the heading to  indicates), but the form of  and  has given rise to ambiguity. In particular, the use of the word “substantial” in  and  caused the Full Court to conclude that the Tribunal had not had regard to an ACCC argument about detriment comprising a lessening of competition that is less than substantial. Given that “substantial lessening of competition” has been observed in leading cases to mean “meaningful or relevant to the competitive process”, the distinction between a lessening of competition that could constitute a public detriment and a substantial lessening of competition may be very fine indeed. It is not clear why a lessening of competition that it not meaningful, or is not relevant, to the competitive process would be a public detriment. Nevertheless, the Full Court’s reasons require that distinction to be drawn.
As noted in Tabcorp’s previous written closing submissions, there is ample evidence to support the propositions that pari-mutuel wagering products are highly substitutable with other wagering products and that the merged firm will continue to be constrained by corporate bookmakers in the highly competitive national wagering market from increasing its pari-mutuel take-out rate in the Tatts states. In this regard, Tabcorp refers in particular to the evidence of Mr Cooke and others referred to in Tabcorp’s previous written closing submissions at  – .
In view of the evidence before the Tribunal, and the marked [sic] analysis in the Tribunal’s reasons, there is no basis for a finding of any lessening of competition in the national wagering market in the manner contended by the ACCC. In short, the ACCC’s case is without foundation and is flawed because it ignores the substitutability between pari-mutuel wagering products and other wagering products such as fixed odds and tote derivatives and the competitive constraint provided by the corporate bookmakers in a highly competitive national wagering market and their incentive and ability to obtain a licence to provide pari-mutuel products in the likely future with and without the merger
The further evidence that has been filed with the Tribunal since 2 June 2017 equally contains no support for the ACCC’s case. Indeed, as explained below, it provides further support for the conclusion that the merger will likely promote competition in the national wagering market contrary to the ACCC’s case.
67 In relation to the broader question of pari-mutuel take-out rates in the Tatts jurisdictions of Queensland, South Australia, Tasmania and the Northern Territory, this submission by Tabcorp accurately summarised the Tribunal’s reasons for concluding that there is no material detriment to be found and the position now taken by the Tribunal in these applications. The ACCC’s submission was predicated on the notion that Tabcorp provides Tatts with the competitive constraint to keep Tatts’ takeout rate lower than allowed under State regulations. The Tribunal takes the view that pari-mutuel, tote derivative, and fixed-odds wagering are substitutable for the vast majority of consumers, and are in ready supply in these States online. The ACCC noted that these wagering products are ‘not perfectly substitutable’; as anyone who has engaged in a SSNIP analysis will be aware, the Tribunal’s view that these products provide a competitive constraint is not dependent on perfect substitutability. Therefore the competitive constraint on Tatts in its exclusive retail jurisdictions is supplied by all wagering service providers, not just Tabcorp, and the Tribunal does not perceive any material detriment will arise in the Tatts jurisdictions as a result of the proposed merger because it is unlikely that the Merged Entity could profitably set a higher takeout rate or less favourable odds, constrained as it will be by competitive offers from tote derivative or fixed-odds products. We mention here that whilst it may be accepted that almost any increase in take-out rates (or decrease in the odds of fixed odds products) may well result in a supply detriment to consumers, the Tribunal does not consider that such an increase (or corresponding decrease) is likely to occur.
68 This leaves the narrower question of whether the proposed merger may lead to a material detriment in the provision of online pari-mutuel wagering services for those consumers who cannot switch to available substitutes. By virtue of their exclusive State-based licences, the corporate bookmakers are excluded from providing pari-mutuel wagering services. By virtue of the retail exclusivity provided under these licences, the Merger Parties can only compete directly with each other in online channels. And it is accepted that some customers prefer pari-mutuel wagering to such an extent that they will not switch to tote derivative or fixed-odds wagering.
69 In essence, the ACCC and CrownBet submitted that the Merger Parties are the only competitors offering totalisator wagering products (aside from the special case of RWWA), and that these products are not readily substitutable with other products. Therefore, in this particular market segment, the removal of the only competitive constraint will lessen competition in respect of totalisator products. In particular, the ACCC submitted as follows:
Effect on competition of the removal of Tatts as a competitor
There will clearly be some lessening of competition in the national wagering market as a result of the proposed acquisition.
Tabcorp and Tatts are the only competitors offering totalisator wagering products (aside from the RWWA). While RWWA offers totalisator wagering products, because of its pooling arrangement with Tabcorp, it does not have the ability to set an independent take-out rate.
Tabcorp and Tatts also offer totalisator products through the online and telephone channels and several factors demonstrate that they compete with each other in that regard. First, the evidence before the Tribunal is that [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX], which indicates that punters can and do switch between totalisator providers using online and telephone wagering. Second, [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX X], suggests that Tabcorp and Tatts are exercising a competitive constraint on each other with respect to those products. As noted in a Tabcorp internal email between Mr Clare and Mr Schiavello [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XX XX]
There is evidence that totalisator products are differentiated from other wagering products. Accordingly, competition by corporate bookmakers is unlikely to be able to entirely ameliorate the reduction in competition that arises from the removal of Tatts as a competitor for the provision of those totalisator products. That is to say, that the mere fact that totalisator products and fixed odds wagering products are provided in the same market does not enable a conclusion to be drawn that the removal of Tabcorp’s only principal competitor in the provision of totalisator products (i.e., Tatts) will not have an anti-competitive effect.
Further, there is evidence before the Tribunal that supports the proposition that Tatts, in the future without the proposed acquisition, is likely to be a vigorous competitor, and it has been implementing initiatives to improve Tatts’ online wagering position. Mr Robbie Cooke, the CEO of Tatts, gave evidence of efforts that were being undertaken by Tatts to improve its online wagering position, including implementing a fixed odds management system, the launch of bet interceptor technology to enhance and automate yield management, being open to launching new products, planning to licence a UK virtual racing product (subject to regulatory approval) and installing cash handling service terminals, such initiative specifically described as an “initiative which is trying to catch up on something that Tabcorp has had in place for some years”.
The Tribunal noted that it received no evidence that in a future without the merger Tatts planned to divert resources from its lotteries division to its wagering division, and the Tribunal then concluded that it was reasonable for it to conclude that Tatts has no plans to do so: at . The ACCC respectfully submits that the question of whether or not Tatts plans to divert resources from its lotteries division to its wagering division is not directly relevant to the question of whether or not Tatts plans to continue investing in its wagering division. There is no evidence before the Tribunal that Tatts plans to cease investing in its wagering division.
If the proposed acquisition proceeds, the constraint Tabcorp imposes on Tatts, and vice versa, for the supply of online and telephone totalisator products will be lost, with the result that the market for wagering products will be less competitive. This is the case irrespective of the existence of (and competitive constraint provided by) corporate bookmakers.
70 CrownBet submitted as follows:
Tatts’ average take-out rates are currently about [XX XXX XXXXX XXX XXX XXX], which is substantially below the 25% statutory maximum that it can charge. Tatts would obviously increase those rates if it were profit maximising to do so. At present, however, it is constrained from increasing its take-out rates by the potential for inelastic tote consumers to switch to Tabcorp’s tote products. That is why Tabcorp’s and Tatts’ take-out rates are currently [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX X XX XX], and [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XXX]
If the merger does not proceed, Tabcorp will continue to be a source of actual and potential competition that will constrain Tatts’ takeout rates and, if Tabcorp’s statutory take out rates are lifted, vice versa. If the merger proceeds, however, the merged entity will be the sole supplier of tote products across Australia. It would have the ability to increase take-out rates immediately without the need for any regulatory approval. And it could increase take-out rates profitably. Whereas inelastic tote consumers would have previously responded by switching to the tote product of a competitor (ie. Tabcorp), they would now switch to a tote product of the merged entity. Accordingly, the merged entity would retain the benefit of higher take-out rates in the Tatts states, with limited loss of turnover.
Given the value of tote wagering in Australia, the detriment that would be caused by such conduct is substantial. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XXX XX] Although tote wagering has reduced in recent years, Tatts considers that tote wagering will stop declining and “plateau”. Tatts forecasts that the [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX]. Tabcorp has forecast that there will still be [XXXXX XX XXX XX XXX XXXX] in tote turnover in FY20.
Further, the detriment from an increase in take-out rates in the Tatts states would not be limited to inelastic tote consumers. Some elastic consumers would likely respond by switching to fixed odds products. However, this would increase demand for fixed odds products. The natural consequence of an increase in demand for fixed odds products would be an increase in the price of those products. Accordingly, if take out rates in the Tatts states increase, there is likely to be an increase in the prices of fixed odds products as well.
Mr Mellsop and Mr Houston have considered the detriment that would be caused by an increase in both tote and fixed odds products. Their analysis shows that almost any such increase is likely to result in a detriment that would outweigh the limited public benefits that might result from the proposed merger. For example, Mr Houston estimates that an increase in average takeout rates / yield of 5% for all racing wagering would give rise to a detriment over ten years of [XX XXX XXXXX XXX XXX XXX XXXXX XX]. If Tatts’ current average take-out rates (of [XX XXX XXXXX XXX XXX]) were to increase by 5%, they would become [XX XXX XXXXX XXX XXX XXXX] – still well below the 25% statutory maximum.
71 As the foregoing submissions demonstrate, the alleged basis for the existence of a competitive constraint between Tabcorp and Tatts in respect of totalisator products is the ability for consumers to switch between the two.
72 The principal evidence in that regard is that [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX]. However, it does not necessarily follow that such “switching” is a consequence of competitive tension between the Tabcorp and Tatts. It could be explained by other factors. For instance, Mr Patrick Smith suggested that such switching could be explained by large punters betting across pools in order to achieve the benefits of co-mingling, in which case the different tote pools would not be competing with one another:
The [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XX] turnover that indicates punters betting into pools not operated by their home tote pool operator may be significantly explained by large punters… I consider that large punters would have the strongest incentives to bet into multiple pools, even for the same betting opportunity, in order to achieve much of the benefits of co-mingling across these different pools. Large punters are likely to be most aware of the benefits of betting into deeper pools, and betting into multiple pools for the same betting opportunity, as large bets will have the greatest negative effect on tote payout rates for the punter concerned, especially within smaller pools. In the case of large punters betting across pools in order to achieve the benefits of co-mingling, these different tote pools would not be competing with one another, but are rather offering the same punter two independent pools in which to place his bets, to allow him to spread the effect of his bets across the different pools.
73 With that in mind, we cannot conclude that the fact that a [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX X] is, in and of itself, demonstrative of a competitive constraint between Tabcorp and Tatts. Indeed, the evidence does not suggest that customers in Tatts States place online wagering with Tabcorp in order to obtain more favourable payout rates. On the contrary, average payout rates appear to be [XXXXX XX XXX XX XXX XXXX XXXX XXX XXX] for Tatts than Tabcorp. This lends weight to Mr Patrick Smith’s explanation for the switching.
74 Further, such evidence would not necessarily be demonstrative of detriment. This is because – accepting for the moment that Mr Patrick Smith’s explanation is correct – large punters would still be able to access the pool or pools of the Merged Entity. Additionally, according to Mr Patrick Smith, “[t]hese punters would have the best ability to counteract any putative harm that might arise from the merger” due to their enhanced sophistication. Therefore, we cannot conclude that the merger would lead to a detriment as a result of a lessening of competition between Tatts’ and Tabcorp’s totalisator products.
75 The ACCC and CrownBet also submitted that the fact that Tatts had not raised its takeout rate to the statutory maximum was indicative of the existence of a competitive constraint. The ACCC pointed to evidence of Mr Cooke [XXXX XXXX XXXXX XXX XXX X XXX XXXXX XXXXXX XXXXX XXXX XXXX XXXXX XXX XXX X XXX XXXXX XXXXXX XXX]. CrownBet pointed to evidence of Mr Freeman suggesting that Tabcorp monitors Tatts’ rates:
COUNSEL: You keep a close eye in your business, Tabcorp’s wagering business, on just how Tatts and other competitors are going, don’t you?
MR FREEMAN: Yes. I do.
COUNSEL: Tabcorp monitors Tatts as one of its important competitors in the Australian wagering market, precisely how it’s going in the digital space. For example, how many downloads its app receives?
MR FREEMAN We monitor all – all competitors including Tatts.
COUNSEL: It’s Tabcorp’s experience, is it not, Mr Freeman, that there are at least some customers or punters that are just not price sensitive to take-out rates. That has been your experience based on trials; correct?
MR FREEMAN: I would agree.
COUNSEL: Yes. So, therefore, I put to you again: there must be an incentive for you to pull the only lever you’re able to pull, that is raising prices to maximise your revenues if statute and competitive positioning allows you to?
MR FREEMAN: Well, clearly, if all the factors align, then a decision like that could be considered. But it’s a highly competitive market.
COUNSEL … if, hypothetically, Mr Freeman, if Tatts were today to raise its actual take-out rates to around about 25 per cent and Tabcorp were to leave its actual take-out rates at the current persistent levels, I suggest to you that there would be a class of punters who would, over time, notice that Tatts’ tote dividends were consistently less favourable to consumers and punters than Tabcorp’s and that that would result in a volume drop to Tatts through its tote operations. Do you agree with that proposition?
Mr FREEMAN: Yes. They would drop some turnover. It would go to corporate bookmakers predominantly because the prices are – are – in comparison to the corporate bookmakers, the key competitors to Tatts, will be significantly better. So, yes, that’s the potential that would happen.
76 Tabcorp responded that it is not surprising that Tatts might see Tabcorp as a competitor. Not only is Tabcorp’s share of the wagering market much larger than Tatts’ share, but more generally Tabcorp is a reasonably sized competitor in the Australian wagering market. Tabcorp continued its submissions by making the following the points. For Tabcorp, however, the key issue is whether it perceives Tatts as a competitor, and not vice versa. This is because the merger would result in the removal of Tatts, not Tabcorp. In that regard, Tabcorp further submitted that Tatts was not perceived by Tabcorp to provide any significant competition. Tabcorp noted that the Project Alfred documents do not refer to Tatts as a competitor, and Mr Freeman’s evidence that:
[XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XX]
77 Despite acknowledging that Tatts’ rates were monitored by Tabcorp along with other competitors, Mr Freeman’s consistent evidence was that Tabcorp’s rates were not set by reference to Tatts’ rates in this market segment.
78 In the Tribunal’s view, the fact that Tatts has not raised its take-out rates to the statutory maximum is not, in and of itself, demonstrative of a competitive constraint applying as between Tatts’ and Tabcorp’s totalisator products. Rather, the evidence of Mr Cooke and Mr Freeman was that the corporate bookmakers are the main source of competition:
COUNSEL: [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX X
MR FREEMAN: XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XX]
COUNSEL: [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX X
Mr COOKE: XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX X]
79 Relevantly, Mr Cooke also stated:
[XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XX]
80 More generally in respect of the online channel, Mr Freeman stated:
COUNSEL: Tabcorp and Tatts compete online throughout Australia, don’t they, Mr Freeman?
MR FREEMAN: Tatts is a – is one – is a competitor, not a strong competitor, in that space.
COUNSEL: It’s a competitor of yours, though, throughout the country, isn’t it?
MR FREEMAN: It’s a competitor, just like the corporate bookmakers. I mean, they’re the ones we really focus on. They’re the main competitors.
COUNSEL: …And Tabcorp plans to grow its online businesses in the Tatts states further, doesn’t it?---
MR FREEMAN: To be honest, the growth in the Tatts states is not expected to be great at all. The – the reality is is that we have found it very difficult to grow online turnover out of the Tatts states. What we have found is that the customers in Tatts states – and in fact in our states as well – are very loyal to the local TAB. If the customer’s going to have a second account, it won’t be with another TAB, it will actually be with a corporate bookmaker.
81 These explanations of Mr Cooke and Mr Freeman are corroborated by the data before us comparing the turnover shares of market participants in the online channels, which are the channels where Tatts and Tabcorp co-exist as direct competitors given their exclusivity in retail.
82 In particular, when considering totalisator and totalisator derivative products in the online channels, it is apparent that Tatts’ share is comparatively low at [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXXX] (we include totalisator derivative products in this comparison due to our conclusion above regarding tote derivative wagering as a substitute for pari-mutuel wagering). The corporate bookmakers’ respective shares of turnover and revenue respectively in this segment are [XXX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XX XX]. Thus, according to these metrics, Tatts is a comparatively smaller participant in this market segment, which corroborates the evidence extracted above that Tabcorp does not perceive Tatts as a primary competitor.
83 Further, this data provides an indication of the source of competitive pressure in this market segment. Although the trends are not uniform, it is apparent that the corporate bookmakers have captured significant shares of turnover and revenue from totalisator and totalisator derivative products in the online channels since financial year 2011-12. At that time, Tatts’ share of turnover and revenue was [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXX], and Tabcorp’s share was [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX]. Thus, Tatts is not only a comparatively [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX X] based on this data. Again, this corroborates the evidence extracted above that Tabcorp does not perceive Tatts as a primary competitor. It counters the view that Tatts is the source of competitive constraint on Tabcorp raising its takeout rates. (The Tribunal notes that the figures from the NERA data referred to in these Reasons are to the nearest integer as set out in the tables prepared for the Tribunal by NERA in respect of the first application. The Tribunal also notes that its observations in these Reasons concerning the NERA data on shares of turnover are reinforced if Luxbet’s share of turnover is added to that of Tabcorp. The Tribunal further notes that its references to NERA data from financial year 2016-17 – generally expressed as FY2017 (YTD) – are year-to-date figures through to 31 March 2017.)
84 CrownBet sought to contextualise the growth of tote derivative products:
Tote derivative products have been in decline for some time. Across the entire market, tote derivative turnover has [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX]…
Initially, tote derivatives were relied on by corporate bookmakers as a “marketing exercise”. Now, however, [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX XXX]. [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XX].
85 The Tribunal rejects the argument that tote derivatives are somehow in decline and therefore place no competitive constraint on the Merger Parties’ online pari-mutuel wagering services. Tatts presented evidence that tote derivative products were presently being advertised actively to consumers. Tabcorp presented evidence that if there was any decline in tote derivative turnover and revenue, this was outstripped by the rate of decline in pari-mutuel wagering consumption.
86 We also mention briefly the email between Mr Clare and Mr Schiavello referred to by the ACCC and CrownBet. We observe that the correspondence occurred in the context of [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX] We therefore do not consider it authoritative as to whether Tabcorp sets its take-out rates by reference to Tatts.
87 In our view, therefore, the setting of Tatts’ take-out rates below the statutory maximum does not prove the existence of a competitive constraint as between Tabcorp and Tatts with respect to totalisator products. Rather, the evidence suggests that the corporate bookmakers would be the source of competitive pressure.
88 CrownBet submitted that the category of “inelastic” tote consumers in this segment of the wagering market is large, and relied upon Project Alfred as evidence in that regard. However, CrownBet was unable to point with precision to how much of this market segment is elastic and how much is inelastic, and the data it referred to did not pertain directly to elasticity. In that context, we do not consider there is sufficient evidence before us to conclude that the inelastic portion of tote consumers is large. Even accepting CrownBet’s submission regarding inelastic tote consumers, it is nonetheless acknowledged by CrownBet that a portion of consumers are elastic and those customers could be lost if takeout rates are set too high, thus providing a constraint in respect of such rates.
89 In summary, neither the “switching” of customers in Tatts States to Tabcorp, nor the setting of Tatts’ take-out rate below the statutory maximum, provide a sufficient evidentiary basis for concluding that there is competitive tension between Tatts’ and Tabcorp’s totalisator products.
90 Rather, the evidence suggests that in the online channels, where Tabcorp’s and Tatts’ totalisator products co-exist as direct competitors, Tatts’ share of turnover is comparatively [XX XXX XXXXX XXX XXX XXX XXXX.] The evidence does not suggest that Tatts is driving competition in that market segment. Instead, the evidence suggests that corporate bookmakers are driving such competition.
91 Therefore, even if the mere presence of Tatts in this market segment sufficed to demonstrate some form of contribution to competition, the degree of such contribution is attenuated substantially by the comparatively [XX XXX XXXXX XXX XXX XXX XXX] nature of Tatts’ presence, from which it can be inferred that Tatts is not a leading competitor in this market segment. If anything, Tatts is following the lead set by the corporate bookmakers. In that context, the removal of Tatts as a provider of totalisator products would not lessen competition in such a way that detriment would follow.
92 We make a number of further observations regarding the sub-market for totalisator products in which Tatts’ and Tabcorp’s offerings overlap.
93 First, we note that the competitive tension between the Merger Parties in the provision of online pari-mutuel wagering services is not absolute, because Racing and Wagering Western Australia (RWWA) also provides online pari-mutuel wagering services in Australia. Mr Freeman, Tabcorp’s Executive General Manager (Commercial Development) stated that RWWA adopts a very different business model than Tabcorp with respect to its pari-mutuel wagering offer, such that it has a ‘disproportionate amount of premium customer turnover… More than… we have in our own pool.’ Despite its dependence on pooling services provided by Tabcorp, RWWA clearly provides a third alternative for any non-switching customers.
94 Second, the only non-switching customers the Tribunal learned of were a small number of ‘premium customers’ [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XXXX], for whom the absence of competitive constraint between Tabcorp and Tatts following a merger was said to be likely to lead to a detriment in the form of higher takeout rates in the Tatts-exclusive pari-mutuel jurisdictions of Queensland, South Australia, Tasmania and the Northern Territory. These premium customers would presumably respond to a higher takeout rate by choosing not to place bets in Australia with the Merged Entity, rather than by choosing to place fixed-odds bets with one of many Australian corporate bookmakers, or pari-mutuel bets with RWWA or with foreign bookmakers.
95 The Tribunal notes that the number of premium customers is incredibly small. Their failure to substitute fixed-odds for pari-mutuel wagering is a self-imposed preference, rather than a structural barrier. It is very hard to conceive of any effect, on these premium customers, of a hypothetical increase in the takeout rate of online pari-mutuel wagering as a ‘detriment’; and any such increase is purely hypothetical, given that the Tribunal does not accept that it is a likely outcome. David Attenborough, Tabcorp’s Managing Director and Chief Executive Officer, stated that these premium customers do not perceive any risk of higher takeout rates:
I haven’t had one complaint from one premium customer about this merger, not one, and they are – they are big customers. They’re not worried about it.
96 In the opinion of Mr Attenborough, the size of the pool and the betting patterns of all consumers in the pool determined whether these premium customers placed a bet with either Tabcorp or Tatts, rather than the take-out rate:
You’re buying an outcome and that is far more driven by how the customer betting pattern plays out over that race than any take-out.
Mr Freeman elaborated:
[Premium customers] bet in virtually every pool around the world. In the case of Tatts and Tabcorp, we don’t compete for premium customers. The customer wants to be in the Tatts pool. They also want to be in the Tabcorp pool. They tend to operate – to represent about 10 to 20 per cent of the pool at any one time. They need to – they want to bet into those pools because they’re effectively betting against losing punters. They want to win money off the losing punters and… for them to do that well, they cannot afford to be too much of the pool.
97 These comments go to Tabcorp’s primary objective with respect to pari-mutuel wagering in Australia. Tabcorp does not seek to merge with Tatts in order to achieve monopoly pricing. How could it, when the vast majority of consumers can switch to tote derivative or fixed-odds wagering. Instead, Tabcorp seeks to increase the liquidity of the pari-mutuel pool by combining those pools where possible (although Tabcorp has already experienced some regulatory resistance to the combination of its SuperTAB and NSWTAB). The Tribunal previously acknowledged that the particular characteristics of pari-mutuel wagering mean that if the corporate bookmakers are too successful in drawing customers away from pari-mutuel pools with their fixed-odds and synthetic pools products, the pari-mutuel offer could become far less predictable (and far less attractive to consumers). Tabcorp hopes to increase the size of the pool, increase the stability of its pool, lure more consumers into the pool, and lure premium customers into the pool more frequently. Tabcorp hopes that this will counteract the trend from pari-mutuel to fixed-odds wagering, which places the long-term attractiveness and predictability of the pool at risk.
98 Third, we note that that ACCC submitted that there were high barriers to entry in the provision of totalisator wagering services. For instance, the ACCC submitted that:
[T]he market for the provision of wagering products is characterised by high barriers to entry and legal and commercial structural advantages. ..
[C]ertain wagering products such as totalisator products, as you would know, can only be provided pursuant to an exclusive licence, and they are differentiated from other wagering products. Now, a small but significant non-transient increase in price won’t attract new entrants to provide totalisator products because there can be no new entrance to provide totalisator products. They’re provided through an exclusive state monopoly.
99 We do not accept the ACCC’s submissions in this regard. In our view, the conferral of monopoly licences is not properly characterised as an anti-trust issue, but rather a matter of how governments choose to regulate a given market. The advantages that the holder of a monopoly licence might accrue, such as the conversion of retail consumers into online consumers, relate to the regulatory structure and not the conditions of competition between market participants. Moreover, such advantages are unlikely to be affected by the merger. Relatedly, the exclusive nature of such licences must be viewed in light of product substitutability in the market. If a product or service provided pursuant to an exclusive licence competes with other products or services that are generally substitutable and whose provision is non-exclusive, then it would not follow that the exclusive nature of the licence presents a barrier to entry. The Tribunal considers discussion of barriers to entry to a sub-market of dubious relevance. We add that the SSNIP test is a tool designed to assist the process of market definition. It is not only inappropriate but misleading to define the sub-market under consideration – in this instance as relating only to tote products – and then apply a SSNIP to determine whether new providers would be likely to enter the market.
100 For these reasons, Tabcorp would be in no position to gouge punters in its online pari-mutuel wagering offer in the absence of competition from Tatts. The Tribunal concludes that no material detriment in the provision of online pari-mutuel wagering services is likely to arise as a result of the proposed merger.
101 The ACCC submitted that Tabcorp and Tatts compete with each other – as well as with corporate bookmakers – in the supply of fixed odds products, and therefore the removal of Tatts’ competitive constraint in that regard will lessen competition and result in detriment:
Fixed odds products
Tabcorp and Tatts have substantial market share in the provision of online fixed odds wagering services. [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXX].
[XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX XX] suggests that Tabcorp may not be sufficiently constrained in its supply of fixed odds wagering products.
Tabcorp and Tatts compete with each other, as well as with corporate bookmakers in the supply of fixed odds products. As referred to in paragraph 38, there is evidence before the Tribunal that supports the proposition that Tatts, in the future without the proposed acquisition, is likely to be a vigorous competitor, and it has been implementing initiatives to improve Tatts’ online wagering position.
In those circumstances, in the future with the proposed acquisition, Tatts will no longer impose a competitive constraint on Tabcorp and other market participants, which amounts to a detriment for the purposes of section 95AZH.
102 CrownBet submitted that the proposed acquisition would likely lead to a decrease in the odds offered and therefore to a price increase in the provision of Tatts-branded fixed odds products:
Even if tote take-out rates did not increase by reason of the merger, the price of many of Tatts’ fixed odds products would increase. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XX]. Given the disparity between Tabcorp’s and Tatts’ fixed odds yield (eg., for online fixed odds wagering, Tabcorp’s yield is over [XX XXX XXXXX XXX XXX XXX] whereas Tatts’ is less than [XX XXX XXXXX XXX XXX]), this is likely to mean that [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXX].
103 Both the ACCC and CrownBet link yield to price. In the respect of the first application, the Tribunal’s approach was as follows:
 Once it is accepted that the Merger Parties and corporate bookmakers supply a range of differentiated products, it no longer immediately follows that higher average yields necessarily lead to any inference about the competitive constraints exercised on Tabcorp. Even at the narrow level of product specification (online and telephone fixed-odds wagering) referred to by the ACCC, products are differentiated by marketing to different customer segments. Mr Tyshing, Chief Operating Officer of CrownBet, agreed that it was critical for an online wagering operator to release a constant stream of exciting, new, and differentiated products. Realised yields reflect both this and the effectiveness of operators’ risk management systems and their relative abilities to build their books (recalling that realised yields also reflect operators’ success at betting against their customers).
104 The Tribunal is still of this view. It is clear from the data relied upon by the ACCC that the market participants with the three highest yields all offer pari-mutuel products, and all supply wagering services via retail networks. The Tribunal sees no reason why such higher yields could not, for instance, be a function of higher costs in supplying such products. In particular, the Tribunal recalls the evidence of Mr Attenborough that:
So yield is, essentially, the overall return – average return to the – essentially that you retain overall. What drives that is not price. Yield is not price. And to explain that, you need to think about it, really, around four different levers. You have customer mix. So generally you have a whole bunch of customers who bet daily small amounts and then you’ve got some sophisticated customers who – who give a lower – they win more. And it’s the blend of those that partly drives yield. Then you’ve got product mix. If you have a – more weighting towards multiple pettings [sic], and we have 20 leg multis, so – where they link lots of bets together. They can yield up to 40 per cent. So the more multi-betting happening, the higher the overall average yield you will get in a year. Then you have risk management, which people will talk about, and that’s how you manage that sophisticated group. That’s not how you manage the bulk of your – that’s how you manage that small group of sophisticated customers, and you manage how much they can place into your fixed odds betting book, and how you manage them is based on the fourth input, which is cost. Your cost base. If you’re a high cost operator like we are, you have to risk manage really carefully, because you’re carrying a huge amount of costs. So if you have a winning customer that generally only loses about 2 per cent, and your cost base is far higher than that, you can’t take that customer – you can’t allow them to have more than a small amount into your book. If you are an online bookmaker with a low cost base, you can allow a lot more activity from those sophisticated customers and that will pull your average yield down, but the price that’s seen by the customers isn’t any different. And a good example in the UK, UK retail, highly competitive market – all these bookmakers here today, highly competitive market, and it yields well above 16 per cent for the bookmakers, because it’s a broad base of average general punters. So that’s yield. The average is not driven by us changing our prices, it’s driven by the mix of customers, the mix of product, the cost base, and how we risk manage that small group of sophisticated customers, and they are a small group, and they shop around.
105 In any case, Tatts and Tabcorp are not the main source of competitive constraint on each other’s fixed odds products in the online channels. [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXX.] Tabcorp’s share of turnover in this market segment [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XX] In the same period Tatts has also experienced a [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX] This contrasts with FY2017 (YTD) turnover and revenue respectively of [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX X] It is true that some of those corporate bookmakers’ shares of turnover have declined in recent years as other corporate bookmakers have entered the market. However, the data demonstrates clearly that most individual bookmakers, and the corporate bookmakers as a whole, have significantly increased their share of turnover and revenue in online fixed odds wagering.
106 The existence and extent of a competitive constraint as between Tabcorp’s and Tatts’ fixed odds products in the online channels must be viewed against that background. [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXXXX XXXX XX.] Thus, to suggest that the removal of the competitive constraint reflected by [XX XXX XXXXX XXX XXX XXX XXXXX XXX XX] would have a material impact on either Tabcorp or the other corporate bookmakers in this market segment seems unlikely. Rather, it appears from this data that the competitive pressure in this segment is being driven by the corporate bookmakers.
107 Our understanding of this data is consistent with Mr Attenborough’s characterisation of the competition between Tabcorp and Tatts in the provision of online wagering services:
COUNSEL: But, essentially, where you do view Tatts as a competitor would be in the – where you’re both competing for online wagering?
MR ATTENBOROUGH: Yes. But that’s why I explained, if I might – if you look – our penetration in their states overall is really low, single digit.
COUNSEL: Very low number, yes?
MR ATTENBOROUGH: And yet, listening to all the evidence, we’ve had our brand being pummelled to every single person betting on racing around the country for years on Sky, and we’ve got a penetration of down below that very low per cent that you would have seen. So that tells you that it doesn’t – it’s actually – it’s not – our products are not compelling compared to Tatts’ in their home states. It – despite our brand being all over their home states on the Sky channel, it is all about the difference. So you have your Tatts’ account in Tatts’ states, and then you will have a Sportsbet account, and probably one of the others as well. The average number has three or close to three accounts. UK it’s closer to four or five.
108 One more point must be addressed. CrownBet stated that any increase in tote take-out rates would also lead to switching to fixed-odds products, and that:
… this would increase demand for fixed odds products. The natural consequence of an increase in demand for fixed odds products would be an increase in the price of those products. Accordingly, if take out rates in the Tatts states increase, there is likely to be an increase in the prices of fixed odds products as well.
109 This contention does not accord with the nature of supply and demand in wagering services. Demand for fixed odds wagering has grown strongly for over a decade now. The Tribunal was taken to no evidence of the ‘natural consequence’ that the price of fixed odds wagering services has increased over this period. The fixed odds which are offered by a bookmaker are a function of the spread of demand for different contingencies across an event. They are not a function of the overall level of demand for fixed odds wagering services. Indeed, there is a strong argument that as demand goes up, the cost base of the bookmaker’s business is spread across a larger revenue base, meaning that the price of wagering services could actually decrease as demand increases.
110 For the foregoing reasons, we do not consider that the proposed acquisition would cause detriment due to the removal of Tatts’ competitive constraint in the online channels for fixed odds products. Rather, based on the evidence before us, it is the corporate bookmakers that are generating the competitive pressure in this market segment vis-à-vis Tabcorp, as particularly evidenced by their large and growing share of turnover. We cannot see how the loss of Tatts’ [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX X] could lessen competition and thereby cause detriment when set against the broader dynamics in this market segment.
111 In addition to submissions on the particular market segments encompassing fixed odd products and totalisator products, the ACCC submitted more generally in respect of online wagering services that:
There will clearly be some lessening of competition in the national wagering market which will result from the proposed acquisition. In the provision of online wagering services, Tabcorp and Tatts are the only competitors offering totalisator wagering products (aside from the RWWA) and are both significant competitors in offering fixed odds and other wagering products. While RWWA offers totalisator wagering products, because of its pooling arrangement with Tabcorp, it does not have the ability to set an independent take-out rate.
Tatts and Tabcorp currently compete with each other for the provision of online and telephone totalisator wagering services, and the competition is likely to become more intense and significant in the future as telephone and online wagering takes up an increasing proportion of overall totalisator wagering.
112 When considering the provision of total online wagering services generally, the Tribunal’s assessment is consistent with the separate assessments regarding pari-mutuel and fixed odds wagering services. In particular, if one expands the assessment to a segment comprising all online and telephone turnover (including totalisator, tote derivatives and fixed odds), it is clear that Tatts’ share of turnover has [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XXXXX XXX] This trend is repeated for Tatts’ share of revenue [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX] Thus, by these metrics, Tatts is a comparatively [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXXXX XXX XX] over time.
113 In that context, it stands to reason that Tabcorp – whose share of turnover has likewise [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX] and whose share of revenue has [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX] over the same time period in this market segment – would not perceive Tatts as a primary competitor.
114 As we have observed earlier, the precise nature and degree of substitutability of products in the online and telephone channels is contested, even in circumstances where the definition of a single national market in wagering is accepted. At a minimum, however, this data comprising all online turnover does not contradict – but rather confirms – our respective observations above concerning pari-mutuel and fixed odds wagering services as separate market segments. It appears from this data that the competitive pressure in the total online wagering segment is being driven by the corporate bookmakers. It is not clear to us that the removal of the competitive constraint reflected by Tatts’ [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXXXX XXX XX] would have a material impact on either Tabcorp or the other corporate bookmakers in this market segment.
115 The ACCC and CrownBet emphasised certain alleged features of the wagering market which, in their view, meant that the removal of Tatts would lead to less competition and cause detriment. These alleged features variously included high market concentration, high barriers to entry, no legal imports, legal and commercial structural advantages (for example Tabcorp’s ownership of Sky Racing, and Tabcorp and Tatts’ State retail monopolies), negligible countervailing power, and differentiated products.
116 For the ACCC, the presence of some of the features is indicative of an “imperfectly” competitive market in which the removal of a competitor with a significant market share necessarily causes a lessening of the competitive constraint on the remaining market participants. This stands in contrast to a perfectively competitive market in which all firms are price takers, and the industry is characterised by freedom of entry and exit. The ACCC thus stated that the Tribunal’s analysis must ‘inevitably’ lead to the conclusion that one less competitor is necessarily detrimental:
It is not in dispute between the parties that in Australia wagering products are supplied in a single national wagering market. The definition of that market simply frames an issue for consideration by the Tribunal, namely: if the proposed acquisition proceeds, is the removal of Tatts as a direct competitor to Tabcorp likely to result in a lessening of competition in that market? Market definition does not provide the answer to that question. The fact that there are other market participants providing substitutable products does not preclude a finding that there will be a lessening of competition in the market if a significant market participant is removed.
The removal of Tatts as a competitor will inevitably cause a lessening of competition, simply by reason of the fact that it will no longer be competing with Tabcorp and other market participants. There may be debate about the magnitude of that detriment (as discussed below, the ACCC submits it is likely to be significant), but the fact that there will be detriment constituted by a lessening of competition is clear…
[T]he ACCC sets out further market share analysis, which demonstrates the size of Tabcorp and Tatts’ share of the wagering market. That analysis is also inconsistent with the market for the provision of wagering services approaching anything like perfect competition (which is generally characterised by market participants having a small market share).
117 CrownBet similarly argued that, in view of these features, the primary competitive constraint in the market is therefore the constraint that Tatts and Tabcorp impose on each other.
118 This is conclusory reasoning. The High Court has stated that ‘“competition” describes a process rather than a situation’: Air New Zealand  HCA 21 at  (Kiefel CJ, Bell and Keane JJ). The Tribunal does not conclude that a competitive detriment will arise simply because the situation will change when the number of wagering service providers is reduced from, say, nine to eight. The ACCC and CrownBet seem to be proposing that if the market cannot be described as ‘anything like perfect competition’, it will inevitably suffer competitive detriment upon further consolidation.
119 The Tribunal warned against the use of static analysis in Application by Tabcorp Holdings Limited  ACompT 1:
 By combining the market shares of each Merger Party, the Merged Entity’s share of turnover and revenue in the market will be aggregated [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XXXXX]. However, as stated in Qantas at :
It is a simple exercise to take a snapshot of a market at a moment in time and see a combined market share … However, such a snapshot tells us nothing about the conduct in the market leading to that market share, or about the potential dynamic interaction in that market with other competitors within the market who have either recently entered it or who have recently commenced an expansion of their activities in it.
 The Tribunal adopts this statement. A substantial lessening of competition in the consumer wagering market is not demonstrated by a snapshot of market share arising from the proposed merger.
120 In the space of a few short months these market share forecasts are already dated because they did not consider the dynamics of the competitive process, including (but not restricted to) consumption trends and market share trends over time. Tabcorp in particular submitted that further evidence of recent financial statements of the Merger Parties and the corporate bookmakers indicate that the trends identified by the Tribunal in its earlier Reasons have continued. Whereas revenue for Tabcorp and Tatts have largely remained comparable with the foregoing financial year, the evidence of corporate bookmakers including CrownBet, Sportsbet, and Ladbrokes variously indicates material increases in revenue, active customers, or both. [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX X]. Tatts drew the Tribunal’s attention to the recent entry of another online wagering services provider, NEDS, which suggests that CrownBet’s assertion of high barriers to entry may be overstated.
121 It is true that the Tribunal originally expressed the proposition in the context of a ‘substantial lessening of competition’, which led to some confusion. Having considered the matter, the Tribunal expresses the same proposition with respect to any competitive detriment, though it may be doubted whether whole-of-market concentration analysis can tell us anything about competitive detriment in a smaller market segment. CrownBet emphasised the high market concentration with updated figures, and there was a good deal of focus in respect of the present applications concerning market concentration as measured by the commonly accepted Herfindahl-Hirschman Index (HHI) measure of market concentration. The ACCC presented the Tribunal with calculations of the change in the HHI for wagering turnover that would arise from the merger. The increase [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX] was substantially larger than the change, identified in the 19 August 2010 Horizontal Merger Guidelines issued by the U.S. Department of Justice and the Federal Trade Commission, that would signify a merger that would “potentially raise significant competitive concerns” for either Moderately Concentrated or Highly Concentrated Markets. The Tribunal accepts the HHI is a useful tool for identifying mergers of prima facie concern, however, as noted in both the Horizontal Merger Guidelines and the ACCC’s own Merger Guidelines, further assessment will rely on exploring the other dimensions of the competitive dynamics of the market such as trends in pricing and market shares, barriers to entry and differences in rivals’ strategies, cost structures and technologies.
122 A lessening of competition in the consumer wagering market is not demonstrated solely by a snapshot of market share arising from the proposed merger. We observe in this regard that the ACCC’s Merger Guidelines (November 2008) state:
Market concentration refers to the number and size of participants in the market. It provides a snapshot of market structure as well as an approximation of the size of the merger parties, which can assist when considering the other merger factors. Changes in market concentration over time can also reveal the frequency of new entry and provide insight into the ability of new entrants and smaller competitors to attract custom and expand.
However, market concentration is not determinative in itself. For example, firms can gain a high market share by adopting more efficient technology, lowering costs and reducing prices. In such cases, high levels of market concentration are not necessarily reflective of a non-competitive market. Measures of concentration in markets characterised by product differentiation may also obscure the closeness of competitors.
Notwithstanding these limitations, market concentration can help to determine whether a merger is likely to result in unilateral and/or coordinated effects. It is the link between concentration and the strength of competition that is important for merger analysis and this ultimately requires consideration of all relevant factors before a final conclusion can be reached.
123 As required, the Tribunal has given fresh consideration to this matter. However, the Tribunal is not assisted by adopting the tools of market concentration analysis to what is a task of assessing the current and likely future state of competitive pressures. Cutting data in different ways can show that any given market player is dominant in fields in which it has a superior differentiated offer. For illustrative purposes in this context, consider the value of the HHI for online wagering. Carving out online wagering data draws attention to the obverse proposition: one could also analyse concentration in retail wagering. The Merger Parties are necessarily dominant in retail wagering by virtue of their exclusive licences. Should the Tribunal conclude that the proposed merger must lead to a competitive detriment in retail wagering services, despite the fact that either Tabcorp, Tatts or RWWA already have absolute retail exclusivity in any given jurisdiction? The Tribunal has concluded that it receives no assistance from measures of sub-market concentration when assessing whether a competitive detriment will arise as a result of a merger between two rivals.
124 In respect of countervailing power, two issues were raised, one of which we address below regarding the ability of relevant PRAs to negotiate for media rights after the proposed merger. The other issue related to the countervailing power of consumers in the national wagering market. In particular, it was submitted that consumers placing bets at the track, or on the phone or internet, have no ability to exert any countervailing power on wagering services providers in relation to the price or odds offered. Thus, with the exception of sophisticated premium punters, consumers effectively get the odds or tote dividends that are set. In our view, this argument incorrectly characterises the relevance of the concept of countervailing power. That power is the ability of a sole or small number of buyers credibly to withhold demand to "push back" against the price setting behaviour of a monopoly supplier. In markets with many sellers, consumers do not have to negotiate better prices, they have the ability to switch between providers and products. This ability to switch gives consumers a choice to pursue the most attractive offer available. There will remain a number of providers in the national wagering market after the proposed acquisition offering products and services that are substitutable to the extent we have described.
125 CrownBet also contended that Tatts and Tabcorp would compete more aggressively if the merger did not proceed. According to CrownBet, this is because Tatts and Tabcorp are able to attract punters to their (retail and online) businesses without having to compete as aggressively as other suppliers due to the unique value and advantage conferred by their retail assets, while outside of their home jurisdictions, Tabcorp and Tatts do not currently have these advantages and they must compete more aggressively, in the same way as corporate bookmakers. Given that [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX X], CrownBet submits that they would compete more aggressively without the merger. By contrast, the merger would provide retail exclusivity in seven out of eight States and Territories, thus making this more aggressive competition unnecessary. For the Tribunal, these assertions do not accord with the data surveyed above indicating that the corporate bookmakers are a source of significant competitive tension in the various wagering market segments. In particular, this data corroborates the position that Tabcorp and Tatts are primarily responding to the competitive tension generated by the corporate bookmakers. In view of marked changes in relative shares of turnover and revenue in recent years, we would not expect the Merged Entity to be competing less aggressively vis-à-vis Tatts and Tabcorp as separate entities.
126 The Tribunal notes that the ACCC and CrownBet made arguments to the effect that Tatts would be a stronger competitor if the merger did not proceed. The ACCC stated:
There is evidence that Tatts is capable of improving its wagering businesses on its own and that the claimed improvements are not merger-specific. Consistently with the evidence given by Tatts’ CEO Robbie Cooke at the hearing, Tatts is continuing to invest in improving its wagering business. This includes opening 321 refurbished UBET outlets, installing 2,229 new wagering point of sale terminals, and commissioning UBET cash handling self-service terminals in the past financial year.
127 Essentially, the ACCC argued that the removal of Tatts lessens competition and therefore causes detriment. CrownBet relied on evidence given by Mr Cooke in respect of the first application, as well as further evidence such as from Tatts’ 2017 Annual Report, in emphasising the success of Tatts’ refurbishment and re-equipping of its retail outlets and indicating [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX X]:
[I]f the merger does not proceed, Tatts is likely become an even stronger competitor than it is today. [sic]
Tatts is already the second largest wagering operator (by revenue) and the third most profitable operator. Until recently, however, Tatts had under-invested in its wagering business (particularly its online business) and failed to develop initiatives that would use its retail exclusivity to drive online wagering growth in the way Tabcorp had done. As a result, Tatts’ digital assets were “well and truly underdone” and frozen in time. It had underinvested in its its retail network, marketing and promotions. Indeed, it had a [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX X]
However, following a change in senior management in 2013 it started developing a series of initiatives to improve its business, which it began rolling out on 30 April 2015. They included a new website and app, a new brand (“UBET”), a program to refurbish and re-equip its stores, new products and bet types and a new national marketing campaign, which included advertising in print media and on free-to–air and Pay TV, sponsorships, sign-up bonuses, mobile push and SMS campaigns and other promotions.
These investments have already resulted in significant improvements in Tatts’ business. In FY16 its online business grew by 22.5% (more than any other operator in Australia), downloads of its app quadrupled to 163,000, its brand recognition increased significantly (from a standing start) and its turnover increased by 4.1%. Its FY17 results were also positive. Its win rate increased to 15.3% (from 14.3% in the first half of FY17). Although its turnover growth was down 6.9%, this reflected heightened emphasis on risk management and poor weather on the racing calendar (347 more races were lost due to bad weather than the previous year), and a reduction in racing field sizes. Further, revenue was only down 3.7%. There was also strong lift in UBET app downloads (increasing to more than 411,000 from approximately 165,000 in FY16), it signed up more than 70,000 new members to its loyalty and rewards program, and it undertook its first cross selling of wagering bets to lottery customers, with 40,000 mystery bets sold for the Melbourne Cup from its lotteries website.
The (ongoing) refurbishment and re-equipping of its retail outlets is proving highly successful. [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XX] As at May 2017, Tatts had commenced a [rollout of new operator terminals (Orion) at its UBET venues and during April 2017 average bet values via Orions were 24% higher than the older terminals they replaced.] As at 17 August 2017, [505 venues had been refurbished and were performing 5.0% better than other sites for the year-todate].
Similarly Tatts had also commenced a rollout of new cash self-service terminals (SSTs) at its retail venues, featuring cash-in and ticket-in – ticket-out technology. Tatts is only at the beginning of this refurbishment program, which suggests that its retail performance will improve considerably in the coming years.
Its performance is likely to improve considerably in the future. [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXXX].
Further, approximately three quarters of its retail outlets are yet to be refurbished, it is ramping up its marketing (including in the Tabcorp states) and improving its digital platform, and it has recently introduced a new risk management system (which it is continually developing). It also plans to further expand its product range and offerings, including with UBET Live (an inplay betting product available on tablets in retail outlets), which it is currently heavily promoting and considers will be a “huge advantage” in growing market share. Accordingly, its [FY18 budget provides for substantial ongoing investment in its business, including in its retail outlets ($42.9m), SSTs and signage ($33.2m), initiatives such as payment programs and UBET rewards ($2.4m), website and app enhancements ($1.9m), a “bet builder” app ($1.5m) and various other initiatives ($3.9m)].
[XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX XXXXX XXX XXX XXX XXXXX.] Its forecast expenditure for FY18 is set out in Attachment G.
Tatts is likely to be a particularly strong constraint on Tabcorp in the future. [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XX] and it plans to increase that share in the future, including by [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXX]. It is in as favourable a position as any corporate bookmaker to target customers outside its home states because it can [and does allocate punters to its Tasmanian licence and thereby avoid paying any incremental wagering tax or racing industry fees].
Tatts will also have substantial competitive advantages that are not available to corporate bookmakers. It will have a database of 2.2 million customers that straddle wagering and lotteries, providing the [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX X]. As noted above, it has only just begun to take advantage of this database.
The likely improvement in Tatts’ business and competitive position is reflected in the recent bids to acquire it (by Tabcorp and Pacific Consortium). Those bids imply that others see substantial further value to be extracted from the company. They suggest that, in the future without the merger, its performance will significantly improve (whether under current or new ownership) and the constraint that it imposes on its competitors will substantially increase.
128 The ACCC pointed to evidence given by Mr Cooke in respect of the first application. It also submitted that the Tribunal’s consideration in respect of the first application as to whether Tatts planned to divert resources from its lotteries division to its wagering division was not relevant to the question of whether or not Tatts plans to continue investing in its wagering division, noting the absence of any evidence that Tatts plans to cease investing in its wagering division.
129 Tatts responded to these comments, by the ACCC and CrownBet, on its likely performance in a future without the merger:
Paragraphs 72 – 81 record a number of observations about Tatts’ business. The reference in paragraph 79 to [XX XXX XXXXX XXX XXX XXX XXXXX XX] is the budget provision in FY 18 for Tatts’ wagering business which includes expenditure on [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX]. It is correct that [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX]. But that does not demonstrate a willingness to “divert resources” from Tatts’ lotteries division.
Tatts submitted to the Tribunal and maintains the position that if the merger does not proceed, it will continue to compete as best it can. The Tribunal found that the trends of consumers preferring online fixed odds and sports wagering to tote products will continue in the future and would not be “turned around” by the merger (see paragraph 10 of Tatts’ submissions in chief).
130 The Tribunal addressed broadly similar arguments in respect of the first application at :
…As the ACCC suggested, there is good reason to consider whether the target of the acquisition is likely to be a vigorous competitor under the counterfactual, and more is said of this with respect to public benefits and merger specificity below. But analysis of the counterfactual is only necessary if analysis shows that the merger is likely to result in a detriment; and we can only reach that point if the Tribunal concludes that there will be a substantial lessening of competition in the market for consumer wagering services. Therefore, the starting point for competition analysis is the market, not a limited view of competition between the two Merger Parties.
131 Having heard extensive argument about the competitive efforts of Tatts in the counterfactual, the Tribunal continues to take the view that the merger will not lead to a material lessening of competition in the market for wagering services. But following the decision of the Full Court, more can and should be said on this. Insofar as Tatts (under the counterfactual) will continue to invest in its retail venues, the proposed merger provides no competitive detriment whatsoever, because the retail channel is necessarily monopolistic from State to State. Insofar as Tatts (under the counterfactual) will continue to invest in the provision of its online services, the proposed merger provides no competitive detriment whatsoever, because Tatts is clearly playing catch-up in a segment where the competitive tension is being provided by the more sophisticated online offerings of corporate bookmakers and Tabcorp (with more innovative products and promotional offers). Insofar as Tatts (under the counterfactual) will offer a separate pool for those very few large and sophisticated consumers who will only wager into pari-mutuel pools and will never wager on fixed odds products, there is no evidence that those consumers are concerned about any detriment from a lack of choice. Insofar as the Merged Entity will be able to leverage the 2.2 million consumers on Tatts’ databases (including lotteries) to strengthen its wagering offer and this strategy cannot be duplicated by corporate bookmakers or RWWA, Mr Cooke stated:
Over the last two years we have been attempting – and Melbourne Cup is a great example. That database – marketing of that database at Melbourne Cup, where a lottery customer who may not be a punter, may be inclined to put a bet on at Melbourne Cup. We have been attempting to market that database for those opportunities. We haven’t had great success as yet.
The Tribunal accepts Mr Cooke’s evidence that this is yet to provide a material competitive advantage to Tatts. There is therefore no evidence whatsoever that the proposed merger will lead to a competitive detriment from the Merged Entity’s use of this database. The fact of competitive tension from other bidders to acquire Tatts has no bearing on whether the removal of Tatts will produce any competitive detriment in the markets – or, now that we are considering lesser detriments, in any sub-markets or consumer segments – in which Tatts operates.
132 The proposed merger is consistent with the trend towards industry consolidation, with the Merged Entity acquiring greater scale in addition to lower costs. The Merged Entity will consequently be a more effective competitor than the Merger Parties would be separately without the merger. As such, there will likely be greater competition than without the merger, particularly in online wagering, something that would add to the public benefits identified by Tabcorp, which would accrue to the racing industry and to consumers.
133 Both retail and online pari-mutuel wagers go into the same pools, so there is no difference between them regarding the effective price or odds faced by punters. Moreover, it means that the binding regulatory limits on takeout rates that set Tabcorp’s pari-mutuel prices in retail also carry over into its online offer. Conversely, although Tatts is unconstrained by the statutory limits on its pari-mutuel takeout rates, the link to the online sub-market means that it could not raise its takeout rates without possibly losing some online pari-mutuel wagers to competitors’ online channels.
134 The evidence presented to the Tribunal suggests that the primary and dominant source of competitive pressure on the Merger Parties, individually and together, has been, and will continue to be, from the aggressive market growth and acquisition strategies of the corporate bookmakers which are drawing customers to their fixed-odds products and away from the Merger Parties’ pari-mutuel products.
135 The Tribunal agrees with Mr Patrick Smith that:
In conclusion, it appears that there is limited scope for competition between the parties’ wagering services, and that the parties are relatively distant competitors with one another, even in the online and phone channels.
136 The strongest source of competitive pressure on Tatts’ pricing, of both pari-mutuel and fixed-odds products, has been, and is likely to continue to be, from the aggressive market growth and acquisition strategies of the corporate bookmakers. A similar argument applies to Tabcorp, although its pricing is constrained by binding regulatory limits on pari-mutuel products as well as the presence of the corporate bookmakers. Consequently, the Tribunal considers that there is only a remote possibility that the merger will remove a competitive constraint on Tatts’ pari-mutuel pricing and that the merged entity will be able profitably to raise takeout rates. Moreover, although that potential exists, and being aware of the import of the calculations of potential competitive detriment presented by Mr Mellsop and Mr Houston, we are not satisfied that “there is a real chance, and not a mere possibility” that the increase in takeout rates and associated detriment will eventuate.
137 More importantly for the sake of this analysis, the Tribunal takes the view that the merger will not lead to any material lessening of competition in the consumer wagering market. In this respect, no detriment to the public is likely to arise. In fact, as we have indicated, the opposite is the case.
138 The Tribunal received a significant amount of fresh evidence and material with respect to regulatory changes in the provision of wagering services. It was generally to the effect that such changes would negatively and disproportionately affect corporate bookmakers relative to the Merger Parties, such that the proposed merger would lead to material detriment in the consumer wagering market and / or in bidding for exclusive State licences. The Tribunal had already been introduced to most of these changes in respect of the first application:
Obstacles to competition arising from future regulatory change
 The Tribunal mentions one other matter in this context of the consumer wagering market. Laws controlling in-play wagering and click-to-call functionality demonstrate that regulatory change can impact on different competitors in different ways. The Tribunal was taken to the introduction of a POC tax in South Australia as indicative of the uneven impact of widespread regulatory change said to be planned by Federal, State and Territory governments. South Australia’s POC tax legislation does appear to disproportionately impact corporate bookmakers and Tabcorp relative to the exclusive licence holder, Tatts. But to second-guess the impact of wider regulatory change on the competitive field of rivalry in wagering services is counter-productive unless the Tribunal has been taken to the terms of legislation that is likely to be implemented. The Tribunal will return to this issue.
Potential regulatory change
 As the Tribunal emphasises, the proposed acquisition will occur in a changing regulatory environment. Some of the proposed regulatory changes referred to below may decrease some cost advantages that corporate bookmakers have compared to the local retail/totalisator licensee (which will be the Merged Entity in all jurisdictions except Western Australia).
 However, the regulatory changes the Tribunal refers to below are by no means formulated (other than in South Australia in relation to the POC tax), and the impact on all participants is uncertain. For instance, determining the true impact of a POC tax on corporate bookmakers is complex because corporate bookmakers and punters may take a variety of actions in response to any changes arising from the imposition of such a tax. It is for this reason the Tribunal, whilst mindful of a potential impact on all participants in the market, puts little weight on the possible regulatory changes. Importantly, the Tribunal takes the view that whatever changes are made, corporate bookmakers will be able and have an incentive to remain competitive.
 Nevertheless, the Tribunal accepts the following is likely to be the position.
 First, it is likely that the South Australian Government will introduce a 15% POC tax in South Australia. The Statutes Amendment (Budget 2016) Act 2016 (SA) introduces into the Authorised Betting Operations Act 2000 (SA) a new part 3B titled ‘Taxation’ (‘POC Part’) concerned with a POC tax. While the commencement of the POC Part is subject to proclamation, the South Australian government has announced that the POC tax will come into effect in South Australia on 1 July 2017.
 In summary:
(1) the POC Part provides that a betting operator (which includes the corporate bookmakers and State retail and totalisator licence holders in both South Australia and other States) is liable to pay a POC tax on the operator’s ‘net State wagering revenue’ above $150,000.
(2) In broad terms, the phrase ‘net State wagering revenue’ is defined as the revenue of the operator. This is in turn defined as the sum of components including, in summary, the total amount of all bets made with the operator, less all winnings paid or payable in respect of those bets.
(3) The POC tax is payable in respect of bets made with an operator by persons who were located in South Australia at the time of making the bet. As such:
(a) the tax applies to bets made on events occurring both within and outside South Australia;
(b) the tax applies to bets made on any event, including racing, other sports, politics and entertainment; and
(c) operators will need to determine the location of the person making the bet. There are various potential means for doing this including customers registering their address when creating an account.
 The evidence indicates that should this POC tax be imposed, [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX]. Corporate bookmakers, on the other hand, will be required to absorb the loss of 15% of their revenue. This will mean they will either have to reduce existing costs (eg advertising) or pass the additional costs on to consumers. However, all these considerations are speculative, and the various avenues open to government to secure revenue will be undoubtedly considered at the relevant time of imposition. It seems very unlikely that Tatts or Tabcorp will not be adversely affected by the introduction of a new tax, although it will all be a matter of degree, and how they respond to any specific legislative change.
 Secondly, the evidence also supports that other governments are considering the introduction of state and national consumption taxes. For example:
(1) In March 2017, following a meeting of the Council of Federal Financial Relations, the Federal Treasurer, Scott Morrison MP announced:
The Treasurers agreed to consider a common national approach on examining a point of consumption tax for online gambling having regard to South Australia’s approach. Treasurers will consider a model that provides for Commonwealth oversight of consistency.
(2) The Victorian Budget Papers 2017/18 note:
As agreed at the Council on Federal Financial Relations Meeting on 24 March 2017, the states and Commonwealth will consider a common national approach on examining a point of consumption tax for online gambling. … As part of this work Victoria is developing a point of consumption tax.
 Another anticipated regulatory change relates to in-play betting. Tabcorp and Tatts can currently offer in-play betting on sports over the telephone and in their retail venues. Corporate bookmakers can only offer this service over the telephone. Tabcorp’s and Tatts’ ability to offer in-play betting in the retail channel provides them with a competitive advantage.
 Proposed amendments currently being considered by the Commonwealth Parliament to the Interactive Gambling Act 2001 (Cth) may increase this competitive advantage by allowing Tabcorp and Tatts to offer digital in-play betting on sports in retail venues, in addition to their current in-play offerings. If these proposed changes prevail, and retail operators begin to offer in-play services via tablets and other electronic devices, and assuming that customers are required to have an online account with the retailer in order to place a bet using a digital device, this could be an additional method by which retailers are able convert retail customers to multi-channel customers.
 Then another possible regulatory change concerns more active regulation of wagering advertising. Mr Brown’s evidence is that such changes may result in bans on gambling advertising during live broadcasts of sporting events on free-to-air and pay television (other than Sky). This will likely lock corporate bookmakers out of advertising on almost all live events on which they take bets, but leave the Merged Entity in a position where it can advertise nationally on Sky. Senator Xenophon has introduced the Interactive Gambling Amendment (Sports Betting Reform) Bill 2015, which would restrict the broadcasting of wagering advertisements on sports or during a G classified television program. A Senate committee ultimately recommended against the bill, although the bill is before the Senate for consideration and could still be approved.
 Taking all the above matters into account, the Tribunal is of the view that no public detriment is likely to arise from any substantial lessening of competition in the market for wagering licences or the provision of pooling services to pari-mutuel wagering operators.
139 In further evidence and submissions, the ACCC, CrownBet, and Ladbrokes as an interested third party directed attention to the following regulatory changes:
The introduction of a Point of Consumption Tax (‘POC tax’) in South Australia
Announcements by the governments of New South Wales, Victoria and Western Australia that a POC tax was being considered
Announcements by Commonwealth, State and Territory governments that a national framework for a wagering POC tax will be considered
Amendments to the Interactive Gambling Act 2001 (Cth) (‘IGA’) prohibiting ‘click to call’ services; prohibiting online (but not retail) wagering on a sporting event after commencement; and prohibiting the offer by wagering operators of lines of credit via third parties such as ‘payday’ lenders
Restrictions on online wagering as part of the ‘National Consumer Protection Framework’, including restrictions on sign-up offers and the requirement that bonus bets must be instantly withdrawable
Federal media reforms restricting gambling advertising during live sporting events
The Victorian Government announcement that it will prohibit gambling advertising on roadside billboards, on public transport vehicles, and in close proximity to schools (but not with respect to retail shopfronts).
140 This fresh evidence provided more details of the likelihood that each change would come to pass. We briefly set out below the main arguments and further evidence submitted in respect of each alleged regulatory change. Before doing so, we make a few preliminary remarks.
141 First, it must be noted that these changes are not a fait accompli. Many are yet to be introduced, or even drafted in final form. For those still in consultation phase, the broader racing industry no doubt has a view as to the desirability of a POC tax on wagering that returns funds into consolidated revenue, instead of returning it to the racing industry directly. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXX] The Tribunal is tasked with making an assessment of the likely future with and without the merger, which (regarding regulatory change) is often no more than an educated guess. If this guess applies to both the ‘future with’ and the ‘future without’ the merger, then the correctness of the Tribunal’s guess may not interact with the important question: whether the public benefit or detriment will arise as a result of the merger.
142 Second, the Tribunal heard evidence that the threat that these changes present to the competitiveness of corporate bookmakers in the wagering services market is overstated. When presenting 2017 interim results to investors, Mr Breon Corcoran, Chief Executive Officer of Paddy Power Betfair plc (parent company of Sportsbet), expressed the view that:
[Regarding] upcoming regulatory and fiscal changes, we believe it will be ever more important to be a scale operator. Australia, I think, is the starkest example of that... regulatory and compliance cost will go up... We are confident of our strategic positioning.
143 Tabcorp noted that its rivals (who are public entities) must share this confidence:
[I]t appears that notwithstanding various annual reporting having been concluded over recent months, there is no evidence that CrownBet or any other corporate bookmaker has disclosed to the market that the SA POC tax, or a POC tax more generally, will have any material impact on earnings or profits. That is telling. It must be inferred that the impact in SA is not material and that the corporate bookmakers consider that risks arising from any future national POC tax or further state POC taxes are not material in the overall context of their businesses.
144 With respect to those changes already confirmed, Tabcorp accurately summarises the distinction to be drawn between the position of the corporate bookmakers (as presented in respect of the present applications), and their position as presented to shareholders. The Tribunal takes the view that undue emphasis has been placed on these changes in respect of the present applications. The position in all likelihood is that good profits will be made, but attention will need to be given to marketing spend, labour costs, innovation, product quality and mix. Undoubtedly, the wagering landscape is changing rapidly – but the Tribunal is satisfied that all participants in the industry are preparing for the changes they are fully aware may (or will) eventuate. Even if the picture as presented to the Tribunal is more accurate than that presented to shareholders, the Tribunal is being asked to make the leap to a conclusion that these regulatory changes will have such an impact on the provision of wagering services that the merger will lead to detriment. The Tribunal accepts that some of these changes will have a direct impact on the provision of wagering services, but given that some will occur both with and without the merger, given that the extent of their impact is uncertain, and given that others may not even occur, the Tribunal does not make that leap.
145 Relatedly, the ACCC submitted that the Tribunal should reconsider its approach to uncertainty in respect of the nature and effect of regulatory changes. It pointed to Ladbrokes’ evidence and argumentation that market participants will make business decisions, including international capital allocation, on the basis of prospective regulatory changes regardless of uncertainty in respect of their precise nature and effect. Ladbrokes had stated:
Even in the absence of actual legislated change, the obvious and very real risk of regulatory changes of the type foreshadowed by various governments, may significantly crimp the ability of Ladbrokes to earn an acceptable return on invested capital comparable to other jurisdictions, and should therefore be taken into account by the Tribunal.
Put simply, the intensity of constraint operating on Tatts and Tabcorp by Ladbrokes (and it is submitted, by other corporate bookmakers) which has been experienced in the past regulatory context is likely to diminish in the reasonably foreseeable future regulatory context. It is important for the Tribunal not to ignore foreshadowed regulatory changes because they haven’t come into force yet- companies such as Ladbrokes cannot afford to invest without achieving an appropriate return and therefore do not ignore such foreshadowed changes as matters of, in effect, sovereign risk. They do so and tailor their investment in the competitive activities undertaken by their businesses in different geographic markets accordingly.
146 We accept that market participants may take action on the basis of risks, likelihoods or assumptions as to future regulation despite uncertainties as to its precise form or effect. However, the determination to be made by this Tribunal is of a different quality to those types of business decisions. If there is insufficient evidence to demonstrate whether a regulation may be introduced and what its effect may be on different market participants, we cannot “price in” such uncertainty on the basis of speculation and make corresponding discounts or adjustments in our analysis. Even if we could, no participant has presented evidence in respect of the present applications on how such uncertainty can be “priced in” and quantified. In any event, the Tribunal is simply not persuaded that the identified regulatory changes, taken as a whole, will have the impact suggested by those opposing the proposed merger.
147 The ACCC, CrownBet and Ladbrokes drew the Tribunal’s attention to the taking effect of the POC tax in South Australia on 1 July 2017, and to continued developments in other jurisdictions that may be indicative of the adoption of further POC taxes.
148 In respect of South Australia, CrownBet submitted that the tax had made it [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XX], and Ladbrokes submitted that the tax would likely constitute [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX] of its entire Australian after-tax statutory profit. The Tribunal’s attention was also drawn to [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX].
149 The Tribunal was taken to specific evidence as to the effect on CrownBet and Ladbrokes of the South Australian POC tax. Mr Tyshing of CrownBet stated:
South Australian customers have become significantly more expensive for CrownBet to service given their wagering activity is now subject to three forms of taxation (excluding the licence fee paid to the Northern Territory) – GST, product fees to Racing South Australia, and the POC Tax. Accordingly, CrownBet is now paying approximately 45% in tax on the revenue it generates from SA residents’ wagering activity.
[XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX X]
As a result of the introduction of the POC Tax in South Australia, CrownBet implemented a number of measures in order to mitigate the commercial impact of the POC Tax, including [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXX].
These measures have resulted in [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XX].
150 Mr Patrick Brown of Ladbrokes stated:
For the period 1 July 2016 to 30 June 2017 (FY17), Ladbrokes’ Net State Wagering Revenue (for South Australian customers) was [XXXXX XX XXX XX XXX XXXX XXXX XX]. Assuming Ladbrokes’ Net State Wagering Revenue for FY18 was the same as FY17, Ladbrokes would pay Betting Operations Tax to the South Australian government of [XXXXX XX XXX XX XXX XXXX XXXX X] over the course of FY18. This constitutes [XXXXX XX XXX XX XXX XXXX XXXX] of Ladbrokes’ entire Australian after-tax statutory profit for the period 1 January 2016 to 31 December 2016 (CY16) of $4,502,000.
151 Ladbrokes also stated:
In respect of SA POC taxes (which have come into effect), Ladbrokes South Australian turnover and net wagering revenue are both about [XXXXX XX XXX XX XXX XXXX XXXXX] of the overall turnover and net wagering revenue amounts of Ladbrokes Australia.
152 These figures are of assistance to the Tribunal. They raise further questions about the viability of any POC tax to be introduced by other State and Territory governments at the rate currently set in South Australia. They also raise questions about future changes of strategy for corporate bookmakers, particularly with respect to promotional expenditure, if their profitability is currently such that a new tax in a State that accounts for approximately 7% of the population and [XXXXX XX XXX XX XXX XXXX X] of their wagering revenue can have a disproportionately large impact on their Australia-wide profitability. But they do not provide answers to those questions.
153 In respect of other jurisdictions, it was submitted that there had been material developments regarding possible POC taxes in Victoria, New South Wales, and Western Australia. In particular, the Western Australia Government announced in 7 September 2017 that it would introduce a 15% tax, with indications that RWWA will receive offsets that will benefit the current monopoly retail provider as against corporate bookmakers. Additionally, the 2017-18 budget papers for both Victoria and New Sales Wales indicate that those jurisdictions are assessing a shift to POC taxation, with the Victorian Department of Treasury and Finance releasing a Consultation Paper on the design characteristics of such a tax.
154 The basic proposition was that these POC taxes will reduce the corporate bookmakers’ relative competitiveness if they are applied to corporate bookmakers differently to the merged firm. This is because they will increase those bookmakers’ relative marginal costs, possibly to a point where market participation is no longer viable, thus impacting their ability to constrain the merged firm in the future. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX X].
155 Tabcorp and Tatts rejected these submissions. First, aside from South Australia, no legislation has been tabled in Parliament or otherwise circulated, which demonstrates the degree of uncertainty as to the outcome of those processes. Second, there is no evidence that corporate bookmakers have disclosed to the market that actual or anticipated POC taxes will have any material impact on earnings or profits. Third, Tabcorp and Tatts pointed to certain corporate bookmakers’ internal documents that counteract their assertions concerning the impact of POC taxes. For instance, an internal document [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX], and in a similar vein, an investor briefing of 30 August 2017 by Sportsbet stated:
Australia continues to be an attractive, regulated market. Significant on-line growth opportunity remains. Sportsbet is the online market leader and continues to leverage its scale to invest in its leading customer proposition. Sportsbet is well placed to take advantage of regulatory change.
156 Tabcorp also pointed to evidence suggesting that [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX], and that [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXXX].
157 The Tribunal has considered the evidence, including the fresh evidence, submitted regarding POC taxes. In respect of South Australia, the tax has entered into effect as anticipated, and it appears that [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX]. In respect of other jurisdictions, the evidence regarding recent developments does not provide the requisite certainty to enable us to draw any conclusions as to the nature and effects of the possible taxes. In this regard, the position has not changed since 22 June 2017, and the Tribunal accepts the submissions of Tabcorp and Tatts.
158 The ACCC, CrownBet, and Ladbrokes submitted that regulatory developments relating to advertising restrictions would disproportionately disadvantage corporate bookmakers.
159 In particular, in May 2017 the Commonwealth Government announced restrictions to commence 31 March 2018 to the effect that gambling advertisements may not be shown during live sports programs between 5.00am and 8.30pm, with an exemption for live broadcast of racing and the advertisement of lotteries. It was submitted that, as Tabcorp and Tatts advertise on Sky, they have little reliance on the need to advertise during the broadcast of live sport, and will be able to continue advertising on that channel in addition to showcasing their brand through lottery products during live sports broadcasts. By contrast, corporate bookmakers, which are excluded from advertising on Sky, will be disadvantaged in competing for customers and greater market share.
160 Additionally, on 17 September 2017 the Victorian Government announced that it intends to introduce restrictions on outdoor advertising. It was submitted that, due to an exemption for retail wagering venues and advertising of lotteries, neither Tatts’ Victorian lottery business nor Tabcorp’s Victorian retail wagering business will be impacted in the same way, thus reducing the ability of corporate bookmakers to compete as effectively.
161 In response, Tatts submitted that these restrictions will not have a substantial impact due to the significant number of other advertising channels and media available to corporate bookmakers. Tabcorp pointed to evidence suggesting that the corporate bookmakers do not consider that they will be adversely impacted by these kinds of regulatory changes, such as this passage from a recent earning call of Paddy Power Betfair:
So, on the face of upcoming regulatory and fiscal changes, we believe it will be ever more important to be a scale operator. Australia, I think, is the starkest example of that. Many of our competitors will struggle from profitability as Sportsbet can thrive as a result. Even overnight, there’s more regulatory news in Australia that credit betting is now possibly within six months of being banned. And many of you will know that that’s 30% of the revenues of one of our competitors down there.
So, regulatory and compliance cost will go up. Being large is definitely a better place to be, even if it’s easier to grow top line from a smaller base. So, with that, we think Australia shows what this might look like. We are confident of our strategic positioning.
162 The Tribunal has considered the evidence, including the further evidence, submitted regarding advertising restrictions. It is not clear to us that they will have such a differential impact that the conditions of competition between Tatts and Tabcorp on the one hand, and the corporate bookmakers on the other, will be materially altered. The restrictions are not yet in operation, and in the case of Victoria, are not yet legislated. The evidence as to their likely effects is speculative.
163 The ACCC, CrownBet, and Ladbrokes contended that a number of changes to the Interactive Gambling Act 2001 (Cth) (‘IGA’) that passed Parliament on 9 August 2017 would adversely affect corporate bookmakers’ ability to act as a competitive constraint.
164 First, it was submitted that certain changes to the IGA, such as the tightened the definition of ‘telephone betting services’, have the effect of prohibiting in-play wagering with corporate bookmakers through online channels and making in-play betting by telephone less practical. This could negatively affect corporate bookmakers. For instance, CrownBet submitted that, when corporate bookmakers were restricted from offering click to call products in the Northern Territory in October 2016, Sportsbet’s turnover on in-play betting reduced from 14 per cent of its turnover to 8 per cent. By contrast, it was contended that Tabcorp and Tatts are still able to offer in-play betting through their retail outlets.
165 Tabcorp responded that retail wagering is declining at a rapid rate, and in any case, corporate bookmakers have developed new or substitute offerings to adapt to this change. For instance, product developments such as Ladbrokes’ “Call Me” service “would seem to put the corporate bookmakers in a very strong position to compete for in-play betting services offered by the merger parties”. Ladbrokes rejected this submission, contending that:
The ‘Call Me’ feature referred to in Tabcorp’s submissions triggers a telephone call from Ladbrokes to the customer rather than a call from the customer to Ladbrokes.Ladbrokes introduced the ‘Call Me’ feature on 6 October 2016 at the same time it withdrew its ‘Click-to-Call’ feature in an attempt to mitigate against the regulatory change which came into effect in October 2016. Despite the introduction of ‘Call Me’, Ladbrokes’ in-play sports betting turnover was [XXXXX XX XXX XX XXX XXXX XXXX] lower in the week ending 1 October 2017 as against the prior corresponding period a year earlier (with ‘Click-to-Call’) as outlined at para 42 of the Second Brown Statement. The [XXXXX XX XXX XX XXX XXXX X] reduction in turnover is even more stark when Ladbrokes Australia had otherwise been growing its total turnover by approximately [XXXXX XX XXX XX XXX XXXX X] year on year as Tabcorp outlines in para 33 and 44(d) of their submissions. The [XXXXX XX XXX XX XXX XXXX XXX] decrease in in-play sports betting turnover, in the context of the introduction of the substitute ‘Call Me’ to mitigate against the regulatory change, is a clear example that regulatory change has resulted in a substantial and detrimental impact to the competitive constraint that Ladbrokes Australia can provide on a merged Tabcorp / Tatts. The evidence shows that Ladbrokes is not, as Tabcorp submits, in a strong position to compete in regard to in-play sports betting.
166 The Tribunal considered issues relating to the provision of in-play wagering services in respect of the first application as follows:
 … The online provision of in-play wagering is unlawful under ss 5, 8A and 15 of the Interactive Gambling Act 2001 (Cth), whereas the provision of in-play wagering via retail or telephone channels is not unlawful. Therefore corporate bookmakers can only offer in-play wagering via telephone. This was previously facilitated by ‘click-to-call’ functionality, where bookmakers used automated voice recognition, allowing consumers to place a bet more quickly. In 2016 conditions were imposed on the licences issued to corporate bookmakers, effectively prohibiting ‘click-to-call’ functionality, causing increased call-centre costs and decreases in the volume of wagers accepted within the limited window of time that in-play betting could occur.
 ‘In-play’ wagering, and the relative competitive advantage held by retail wagering operators compared to corporate bookmakers, was the subject of some attention during Tribunal proceedings. As with other subjects of possible future legislative change, including point of consumption (‘POC’) taxes and advertising restrictions, this discussion was useful to the extent that it informed the Tribunal’s view of the future with and without the merger. However, to the extent that the Tribunal was asked to consider factors that remain unchanged by the merger, the Tribunal was mindful not to allow its proceedings to be used for a collateral purpose.
167 Second, it was submitted that that the creation of a new definition for ‘place-based betting services’ could have the effect of increasing the competitive advantage held by Tabcorp and Tatts in the supply of wagering services by enabling an additional method for retail wagering providers to convert retail customers to multi-channel customers.
168 Third, it was submitted that a prohibition on credit betting effective 17 February 2018 could lead to an immediate decrease in both wagering turnover and gross revenue for corporate bookmakers that rely on credit betting. In response, Tabcorp pointed to evidence from an earnings call with analysts on 31 August 2017 in which the CEO of Ladbrokes Coral Group plc remarked that “we expect to see limited impact” in respect of these restrictions.
169 The Tribunal has considered the evidence, including the further evidence and material, submitted regarding changes to the IGA. We reject the submissions of the ACCC, CrownBet and Ladbrokes. We do not consider that the evidence demonstrates with sufficient certainty how the proposed acquisition will cause detriment in light of these amendments. The evidence on the impacts of these developments and how they might interact with the proposed acquisition points in different directions and remains largely speculative.
170 A number of other regulatory changes were identified. These included a proposal to reform online gambling through a National Consumer Protection Framework, which were alleged to limit corporate bookmakers’ ability to attract new customers, thus leading to decreases in turnover, gross revenue, and active customers, and limiting their ability to act as a competitive constraint on the merged entity.
171 Further, announcements by some states to assess options on banning betting on lottery products were identified as a regulatory change that would limit corporate bookmakers’ ability to release new products, and thus limit the extent to which corporate bookmakers could constrain traditional operators such as Tatts and Tabcorp. For instance, Ladbrokes submitted that:
On 5 October 2017, the NSW Government announced that it was assessing options to restrict ‘synthetic lotteries’ or ‘bet on lottery’ products. This follows similar announcements by the governments of Victoria (on 17 September 2017) and Western Australia (on 16 September 2017), and an existing ban by the South Australian government. Ladbrokes had taken some steps to provide such competitive products. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX]
172 We note that these developments are characterised by a degree of uncertainty. They pertain to options and possibilities, as opposed to actual legislative proposals that have or will take effect. Even legislative proposals before a Parliament lack any probability of implementation in certain circumstances.
173 Additionally, the ACCC identified the announcement by Tasmania Racing of a Minimum Bet Limit effective 1 July 2017 relating to certain fixed odd bets. The ACCC submitted that this could possibly have a greater effect on the overall profitability of corporate bookmakers because, unlike Tabcorp and Tatts, corporate bookmakers are only able to offer fixed odd bets. Evidence was supplied that similar changes are already in place in New South Wales, Victoria and Queensland. However, no actual data was supplied to demonstrate the asymmetric effects of these changes in the States where they have already been introduced. Unsurprisingly, the Tribunal is in no position to determine whether any detriment will arise from the anticipated changes in Tasmania, and therefore concludes that the merger will lead to no competitive detriment in this respect.
174 The Tribunal has considered all of the evidence submitted regarding these regulatory changes. Other than the Minimum Bet Limits, it is important to recall that the alleged changes are proposals under consideration.
175 Having considered the evidence, including the further evidence and material regarding developments since 22 June 2017, the Tribunal concludes that these regulatory changes do not lead to the conclusion that a material detriment is likely to arise from the merger. The Tribunal has noted the submissions regarding the position of Responsible Wagering Australia (the representative body of a number of corporate bookmakers) on these matters, and it does not affect our conclusion.
176 We note that Ladbrokes submitted that the effects of these changes should be assessed not just in isolation, but cumulatively as a whole. The Tribunal has considered this submission. A cumulative assessment does not ameliorate the speculative or uncertain quality of evidence regarding the nature or effects of the specific regulatory changes. Rather, it leads to the same conclusion.
177 Taking all the above matters into account, the Tribunal is of the view that the merger will not lead to any material lessening of competition in the wagering market, nor would any detriment be likely to arise in the provision of consumer wagering services.
178 In its earlier Reasons the Tribunal gave extensive consideration to the likely impact of the proposed merger on the auction of exclusive State wagering licences (which it now reiterates):
Future bidding environment and public benefits from licence auctions
 The Tribunal was presented with an expert report from Professor Menezes which primarily addressed the public benefit consequences of the merger for the likely outcomes of future bidding for State licences. Professor Menezes’ report also addressed the strategies that a seller could use in designing the auction to mitigate the consequences of the loss of a second-highest valuation bidder, or to otherwise extract more of the winning bidder’s valuation (that is, gain a higher price from the winner for any given pool of other bidders). Although these other matters were debated by the experts, there was no consensus on the likely practical consequences of Professor Menezes’ theoretical framework for the form and likely outcomes of future bidding for retail or pari-mutuel licences.
 Two specific propositions emerged from Professor Menezes’ report and the subsequent exchange of experts’ views:
(1) Economic efficiency only requires that the strongest bidder wins the licences.
(2) Consequently, if the merger does not change the identity of the winning bidder, its effects on public benefits can only be through the distribution of the surplus created by the licence auctions between the winner and the public (through the State governments and, consequently, PRAs).
 These propositions, with some caveats, were agreed to by the expert economists and have important implications for the Tribunal’s decision.
 The first proposition arises as a simple consequence of the standard economic measure of the gains from exchange. The gains from a trade are the benefits shared by the buyer and seller from the exchange of an item: the seller obtains a price higher than the value they placed on retaining ownership (otherwise they would not sell); and the buyer gains the item at something less than the maximum amount they would be willing to pay (otherwise they would not buy). Given a seller’s original valuation, these gains are maximised if the item is sold to the buyer with the highest valuation (willingness to pay).
 It was generally accepted that, as the incumbent licensee, Tabcorp would be the strongest bidder for the upcoming Victorian retail and pari-mutuel licences, and would also be a strong, if not the strongest bidder for the WA TAB license, if it came to market. The merger is unlikely to change, and should actually strengthen, that position. On that basis, the merger causes no reduction in economic efficiency nor any public detriment. It is also worth noting that, if the merger did strengthen the winning bidder (the Merged Entity), the State government might then be able to negotiate a higher price (inclusive of returns to industry) than Tabcorp could have afforded absent the merger, something that would add to the claimed public benefits.
 This point was made by Professor Menezes in his discussion of total welfare and the efficiency measures used to assess auction outcomes:
It follows that if the total welfare is defined as total surplus from the auction, then irrespective of what happens to the auction price, total welfare will increase for a merger that creates synergies. It also follows that total welfare is unchanged by a merger that does not alter, through synergies or dissynergies, the value of the object for sale.
 Mr Mellsop drew the relevant implication for the Tribunal’s decision:
This is a very important finding, because it implies that any merger affecting bidding markets should be authorised (assuming there are no dis-synergies), even if the merger would lead to reduced auction prices (in the situation when the auctioneer is the seller, as the state governments would be).
 Mr Mellsop then went on to note:
This finding does assume that we should treat a dollar in the hands of the merged entity’s shareholders the same as a dollar in the hands of a taxpayer or participants in the racing industry. Professor Menezes briefly discusses this issue at . Whether a dollar in different hands should be treated equally or distinctly is a distributional issue rather than a question of economics.
 Distributional issues do potentially arise for two reasons. First, because the merger removes Tatts as a potential second bidder in upcoming auctions, there is a possibility that the prices agreed between Tabcorp and the State governments will be lower, shifting the gains from the sale towards the Merged Entity. Secondly, the merger may change the composition of the ‘price’ agreed (for instance, the division between the up-front licence fee and on-going taxes and racing industry support), even if it does not change the notional total value. That is, once distributional issues arise, the allocation of the value created by the auction, both between the winning bidder and the government and between the government and the racing industry, potentially becomes important, a point noted by Dr Hird in qualifying his agreement with the proposition that changes in the auction price between a seller and a particular buyer only constitutes a transfer.
 In order to identify potential detriment from the merger (as opposed to additional benefit), the Tribunal therefore needed to consider, and substantial argument before it was devoted to, whether, in the counterfactual, Tatts was likely to be the ‘second-highest’ bidder in future licence auctions; if so, whether the State governments could structure the auction processes to compensate for the effect of this if the merger proceeded; and, if the absence of Tatts was not likely to influence the price paid, whether the merger would otherwise reduce the payments to government or industry and whether this could be considered a detriment. The balance of this section addresses these questions.
 If the proposed acquisition proceeds, Tabcorp will, with the exception of Western Australia, hold a monopoly on retail and totalisator wagering operations in Australia. One question for the Tribunal’s consideration is the extent to which the proposed acquisition will impact upon future bidding processes for wagering licences. In particular, there are two bidding opportunities which could arise in the medium term: the Victorian retail and totalisator wagering licence in 2024, and the potential privatisation of the WA TAB. As the Tribunal has indicated, each of these bidding opportunities should be considered as a separate competitive environment at the time of or about any sale or bidding process. However, this environment must be viewed in the context of the wagering market as a whole.
 The proposed acquisition will remove Tatts as a potential bidder for both of these bidding opportunities. The Tribunal needs to consider whether, in the context of the future bidding process:
(1) Tatts would have been the only other credible potential bidder for those wagering licences (or one of the two highest bidders for the wagering licences);
(2) the proposed acquisition is likely to affect the terms on which Tabcorp might bid for those acquisitions in the absence of Tatts as a rival bidder, and in particular, whether this may impact upon:
(a) the bid price received by the Victorian and Western Australian governments for the provision of the Victorian licence and the sale of the WA TAB, respectively; and
(b) the nature of the profit-sharing arrangements with the respective racing industries that the Victorian and Western Australian governments could respectively impose on the bidders as a condition of the licence or sale; and
(3) any reduction of the bid price, and terms on which wagering revenue is to be shared with PRAs, and whether this affects total welfare, or just effects a transfer of surplus between the seller (ie the Victorian and Western Australian governments) and the purchaser (Tabcorp).
 However, all these issues need to be considered in the context of the continuing importance of pari-mutuel wagering and the continuing significance of retail exclusivity. There is a strong body of evidence to suggest that there will be a declining value in exclusive retail and totalisator licences into the foreseeable future, and governments will need to adjust to exploit whatever opportunities there are in this field.
 Tabcorp and Tatts have submitted that it is difficult to predict the nature of any future bidding process for the Victorian licence. The Tribunal agrees. The nature of the bidding process for the 2024 Victorian licence is currently unknown, although for the exclusive retail/totalisator licence issued in 2012, the Victorian government conducted competitive tender processes.
 Whilst there is no evidence before the Tribunal which provides a definitive suggestion that the 2024 process is going to be different, the wagering industry is in a state of immense change. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX], the reality is that it is not likely that the process for the 2024 bid will be the same as the earlier bid. Each government will become aware of the change in environment, just as the Tribunal has become aware.
 The competition for the 2024 licence will only commence once the Victorian Government has settled upon the design of that licence and the process by which it will be awarded. There is no evidence to suggest that this aspect of preparatory work for the future bid will occur within the next three or so years. The reality is that the actual competition for the next licence will not commence for several years. Indeed, if the Victorian Government elects to extend the current licence to 2026, that competitive environment might be eight or nine years away.
 The premise of the ACCC and interveners in respect of the 2024 Victorian wagering licence is that the Victorian Government will offer effectively the same bundle of wagering rights in the same form in 2024 as it did in 2012, notwithstanding the substantial changes in the wagering industry since that time. The Tribunal does not accept this will be the likely position.
 The wagering industry has changed dramatically since 2012. In the lead up to the bidding process for the 2012 licence, Ernst & Young (‘EY’) prepared some modelling for the Victorian Racing Interveners as to the likely future growth in industry funding which assumed an annual growth rate in pari-mutuel wagering turnover of between 2.0% and 3.5% between 2007 and 2024. The actual levels of growth in pari-mutuel wagering since that time have demonstrated that this assumption was optimistic. [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXXX]
 Numerous industry participants have expressed doubts as to the value of a Victorian wagering and betting licence in its current form after 2024. Various analyst reports have raised the prospect that retail exclusivity may have no value at that time. Industry participants have expressed similar views. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX] [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXXX]
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 The “key workshop discussion points” in response to these questions state: [XXXXX XX XXX XX XX]
[XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX]
 The Tribunal accepts that these statements reflect the true views of industry participants that the Victorian Government will likely be unable to realise the same licences fees in 2024 as it did in 2012 without making significant changes to the way it structures its wagering rights and associated tax and industry funding arrangements.
 The Tribunal therefore expects there to be major structural change in the 2024 licensing process, and some substantial restructuring of industry funding. [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XX]
 The possibility that the Victorian Government will change the structure of the wagering licence to reflect changing industry dynamics finds historical precedent in the 2012 licensing process. Prior to 2012, the Victorian racing industry was funded, in part, from profits earned by Tabcorp from gaming machines. Under those arrangements, approximately 25% of Tabcorp’s gaming machine profits went to the racing industry under that structure, which equated to about 26% of the Victorian racing industry’s funding at the time. In April 2008, the Victorian Government announced substantial changes to the way it structured its gambling licences (including its wagering, Keno and gaming licenses), including that the Victorian racing industry would no longer receive a share of gaming machine profits. Nevertheless, the Government committed to putting in place alternative funding arrangements that were “no less favourable” to the racing industry. That was achieved by redirecting a portion of State taxation on pari-mutuel wagering to the racing industry rather than to the State Treasury. The Victorian racing industry participated in that restructuring process, including by making submissions to the Government on what their projected gaming machine revenues would have been under the new licence, and the magnitude of the appropriate tax changes that would need to be made to achieve a “no less favourable” outcome for the Victorian racing industry.
 The structure of the current Victorian licensing arrangements or the associated industry funding structures reflect judgments by the Victorian Government in 2008 as to how to best structure its taxation and licensing arrangements to serve its policy ends, including its policy of funding the racing industry on “no less favourable” terms than existed prior to 2012.
 The Victorian Government will similarly control the process for the grant of the next licence (or licences). In doing so, it will doubtless take account of the various alternative taxation, licensing and funding structures available to it, having regard to the changes in the industry since 2012. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX X]
Future bidding models and strategies
 Mr Attenborough gave evidence of a variety of potential alternative models and strategies that the Victorian Government may adopt in connection with the 2024 licensing process:
(1) [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXXX
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 The Victorian Government will have a range of alternatives at its disposal in 2024 to structure the wagering licence and associated taxation and industry funding obligations in whatever manner best serves its policy objectives. This is the expectation of the wagering and racing industries.
 As to the likelihood of the privatisation of the WA TAB occurring, the Tribunal is of the view that there remains uncertainty as to whether, when and on what terms any privatisation will occur. Whilst there are reports that the former Western Australian Government was exploring such an outcome, and considered that only Tatts and Tabcorp were credible purchasers (stating that “there are only two purchasers in this”), this is at best speculative.
 Even if such privatisation was to occur, and the Western Australian Government would seek to reach an understanding on the structure and terms of any privatisation before the WA TAB is offered for sale, this content of the sale is unknown. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XX]
The position of Tatts and Tabcorp
 The question, with this background, arises as to the position of Tabcorp and Tatts in the future as to the bidding process. In the ACCC’s view, the proposed acquisition combines the two most credible bidders for future exclusive retail and totalisator licences. This was a matter of some debate before the Tribunal.
 It is true that Tabcorp and Tatts have consistently bid for exclusive retail and totalisator licences over the past six years.
 In particular, Tabcorp and Tatts were “the last two” bidders in the two most recent tote licence sale processes in the Australian Capital Territory and Tasmania, with the Australian Capital Territory Government Sale Project Team considering that it was inevitable that only Tabcorp and Tatts, as the two operators of totalisator pools in Australia, could proceed to the next stage. Similarly, in the 2012 Victorian licence sale process, Tabcorp and Tatts were the only entities to submit binding offers. Racing Victoria is of the view that Tatts and Tabcorp were the only participants in that process that possessed “the attributes, business capacity and interest to acquire and operate the Victorian retail network and pari-mutuel pool”.
 The Tribunal accepts at this general level that if the proposed acquisition did not take place, Tatts could possibly remain a credible bidder for both the WA TAB licence and the Victorian licence. The Tribunal can place this no higher than a possibility.
 Nevertheless, there are doubts as to the future viability of Tatts if the merger does not proceed. The Tribunal considers elsewhere in some detail the potential position of Tatts if the merger does not proceed, but makes the following observations in relation to bidding.
 [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXX]
 History would suggest that such views may be well-founded. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX X]
179 The Tribunal has also previously considered the likelihood that new bidders may seek to acquire exclusive State and Territory licences:
Other potential bidders
 The Tribunal accepts, as Tabcorp claims, that there are several potential bidders beyond Tabcorp and Tatts, including large and well-credentialed overseas wagering operators, that would have strong interests in participating in the bidding processes for both the Victorian and Western Australian licences.
 The ACCC and interveners contend that corporate bookmakers and other potential competitors are not credible bidders for the 2024 licence because they face a range of potential disadvantages relative to Tabcorp and Tatt, such as:
(1) corporate bookmakers lack the necessary retail experience in Australia to operate retail businesses in Victoria;
(2) corporate bookmakers lack the necessary experience to operate a totalisator;
(3) the corporate bookmakers would be unwilling to expend the necessary capital outlay to establish a retail network;
(4) foreign pari-mutuel operators are unlikely to enter the Australian market;
(5) any credible bidder will require guaranteed access to racing vision; and
(6) any credible bidder will require guaranteed access to pooling, which may not be possible post-merger.
 The corporate bookmakers provided some evidence that they may face substantial disadvantages in any bidding process and disincentives to bid. However, it was not the evidence of other participants in the racing industry. With the rise of fixed-odds wagering, whatever the retail licences are worth, they will be of at least equivalent interest to corporate bookmakers who will achieve scale benefits and additional customers in the same way that Tatts would, but in circumstances where some of those businesses are likely to overtake Tatts in size in Australia and will leverage very significant scale advantages from their large foreign businesses. More generally, if wagering continues to prosper then it is reasonably certain that governments will adopt some means of extracting revenue (whether by way of taxes or licence fees) from that activity.
 The Tribunal does not accept that the potential disadvantages suggested by the corporate bookmakers would prevent the large corporate bookmakers from entering the bidding contest. Several of the large commercial bookmakers, including Paddy Power, William Hill, Ladbrokes and Bet365, have extensive retail operations outside Australia. It may be that the retail experience in Australia and the retail dynamics in Australia are different from overseas experience, but this does not seem to have deterred interest in Australia. Mr Barry confirmed in the witness box that Sportsbet would be interested in tendering for an exclusive retail licence under the right conditions. Mr Brown said the same was true of Ladbrokes, which has previously participated in bids for the Queensland licence. CrownBet’s interest in retail is demonstrated by its recent arrangements with ClubsNSW. The Tribunal is not satisfied that corporate bookmakers lack the essential expertise to conduct a retail business in Australia, nor would not be potential bidders in any bidding contest.
 Further, there is evidence to the effect that running a totalisator business is less complicated than running a fixed-odds business. As the Tribunal has already noted, Mr Burt said in cross-examination that [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX], and that the talent needed to run such a business was easily acquired. Mr Attenborough gave evidence to the same effect. Mr Attenborough also gave evidence to the effect that totalisator systems can be purchased off-the-shelf from third-party suppliers such as AmTote (which previously provided the ACTTAB system), and that there was also the prospect of an operator purchasing or sublicensing the system used by the WA TAB. He also noted that it would be easy to acquire employees with experience in running totalisator businesses.
 The Tribunal does not view capital expenditure as a serious obstacle to operating a retail enterprise. [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX X]
 As to the suggested need for a credible bidder to have guaranteed access to racing vision, that is the same argument with respect to the potential privatisation of the WA TAB. Again, [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXXX] the merger does not change anything in this regard.
 Mr Cooke of Tatts expressed the view that access to racing vision has not impeded Tatts’ retail wagering operations:
[M]y working assumption has always been that people securing media rights will seek to monetise them and commercialise them and therefore they will act in a commercial way with the people who are prepared to buy those rights such as [Tatts]…
The Tribunal agrees that the imperative to commercialise media rights means that access to racing vision is unlikely to be problematic for any corporate bookmaker who may acquire an exclusive retail wagering licence in the future.
180 The ACCC stressed that the Full Court had held that in ‘all the circumstances’ all benefits and detriments put to the Tribunal by the parties before it are mandatory considerations: ACCC v Australian Competition Tribunal at . For instance, it was submitted that in assessing the detriments likely to result from the proposed acquisition, the Tribunal must take into account that:
Tabcorp and Tatts hold all but one of the retail and totalisator licences in Australia, and the removal of Tatts will remove one of the two most credible bidders for the Victorian retail and totalisator wagering licence in 2024 and the Western Australian retail and totalisator business if the WA TAB is privatised which will result in a lessening of competition in one or both of these bidding markets.
181 The ACCC, CrownBet, and Ladbrokes pointed to developments in the potential privatisation of WA TAB, namely, that the WA budget delivered 7 September 2017 included an announcement regarding an assessment of such a privatisation. CrownBet also observed that the Victorian wagering licence is like to be awarded next in 2024. It was submitted that the proposed acquisition would remove the most likely – and perhaps the only credible – alternative bidder, thus lessening competition in the bidding processes. According to CrownBet, the Merged Entity would possess advantages over corporate bookmakers relating to experience, infrastructure, synergies, access to Sky Racing, and a proven ability to take over a new retail territory.
182 In response, Tatts pointed to [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX]. Tabcorp submitted evidence indicating that [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXXXX].
183 The Tribunal has again considered all of the evidence and submissions put before it. Since 22 June 2017, the Western Australian government has appointed an adviser to assist with the sale process of the WA TAB. We accept the submission that privatisation of the WA TAB has become more likely. However, we do not consider that the Tribunal need alter its previous view. CrownBet reiterated the evidence of Mr Tyshing that CrownBet [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXXX] Ladbrokes likewise submitted that [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXX] Ladbrokes believes [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX].
184 Upon consideration of the future with and without the merger as it relates to bidding for the Western Australian licence, the Victorian licence, or bidding for exclusive State licences generally, the Tribunal’s views remain unchanged. The structure and terms of any privatisation of the WA Tab remain uncertain. The Tribunal has come to the same view that the corporate bookmakers are potential bidders for exclusive State and Territory wagering licences. If the further evidence added anything to the analysis, the Tribunal takes the view that the abovementioned regulatory changes to taxation, advertising, consumer protection and the like increase the attractiveness of exclusive retail State wagering licences, such that corporate bookmakers are more likely to seriously consider bidding for these licences than before these regulatory changes arose.
185 It can be seen from CrownBet’s submissions that the issues of State licence auctions, pooling services, and racing media are interrelated. Bidding for a State wagering licence is made easier by assurance of access to a larger pool and the ability to broadcast racing content. With respect to access to pooling services, the Tribunal previously stated:
 As to access to pooling, the Tribunal does not consider a lack of guaranteed access to pooling is an impediment to any future bid for the Victorian licence.
 The Victorian pool is large and therefore less dependent on pooling arrangements than some smaller pools.
 Unless the WA TAB is both privatised and acquired by Tabcorp, the WA TAB will continue to be an independently-owned pool with which a Victorian licence holder can pool post-merger, and is likely to do so.
 [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX].
 [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX X].
 The Tribunal observes that Mr Burt of RWWA noted that in order to provide a competitive wagering service, the holder of the exclusive State retail wagering licence must have “access to vision, pooling and skills and capabilities and systems”. Mr Barry of Sportsbet agreed that a competitive bid by Sportsbet for the exclusive retail licence was “materially less likely” if Sportsbet could not access vision and pooling: “if we had equal access to vision, and we had a guarantee that we could get pooling, we would absolutely look at bidding for retail licences”.
 Access to pooling services from Tabcorp, by either RWWA or any successive operator of the Western Australian pari-mutuel pool in the event of privatisation, is assured in the Commitment to Long Term Pooling Deed (the ‘CLTP Deed’) entered into by RWWA and Tabcorp on 15 March 2017. With respect to the Victorian licence, access to a joint pooling arrangement is of less significance. The Victorian pari-mutuel pool stands (in 2015/16) at over $2.7 billion. In the same period, the NSWTAB pool stood at $3.2 billion, while the UBET TAB (a combination of pools from Queensland, South Australia, Tasmania and the Northern Territory) collectively consisted of less than $1.8 billion. It may be preferable for a pari-mutuel wagering operator to enter into arrangements with other operators for a larger single pool, but the Tribunal concludes that it is not essential for any future Victorian licensee, given the scale of the Victorian pool.
 The Tribunal’s role is to consider the likely future with and without the merger, but as noted in Australian Gas Light Company, “[t]he meaning of ‘likely’ reflecting a ‘real chance or possibility’ does not encompass a mere possibility”. The Tribunal takes the view that a future in which the Western Australian licence is privatised, Tabcorp wins that Western Australian licence, and in 2024 refuses to offer pooling services to a Corporate bookmaker, does not meet the threshold of a ‘real chance or possibility’, but rather is speculative, dependent as it is on contingencies which may not come to pass.
186 The announcement that the Western Australian government has appointed an adviser increases the likelihood that the WA licence may be privatised in the future. This is not a foregone conclusion. The second and third contingency in the last paragraph are no closer than they were in the Tribunal’s earlier Reasons. Having again considered the issue, the Tribunal cannot conclude that any detriment will arise in pooling services as a result of the merger.
187 The Tribunal previously made some observations with respect to RWWA in the context of pooling services and bidding for the WA licence:
 Tabcorp and RWWA’s current pooling agreement expires in 2024. Access to competitive pooling services beyond 2024 is important to RWWA and, in the event of privatisation, any non-government operator of the WA TAB. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XX].
 It was in response to RWWA’s concerns about ongoing access to pooling services that Tabcorp and RWWA have entered into confidential arrangements in the CLTP Deed. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX X].
 RWWA submitted to the Tribunal that the CLTP Deed substantially, but not fully, addresses RWWA’s concerns. RWWA’s outstanding concerns appear to primarily relate to the way in which the CLTP Deed deals with uncertain future market conditions. For example, according to RWWA, the CLTP Deed does not guarantee that RWWA, or a future acquirer of the WA TAB, will be able to secure an agreement for pooling services once the existing arrangement expires in August 2024.
 The ACCC was concerned that Tabcorp is seeking to address a substantial competition concern – the loss of competition in pooling services – through a long-term behavioural commitment in a deed. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XX
• XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX X
• XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX]
 It is unknown what [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX] The CLTP Deed therefore creates some uncertainty about the commencement and terms of any future pooling agreements. The Tribunal does not consider that this uncertainty could negatively affect the bidding process for the acquisition of the WA TAB, if privatised. The Tribunal also notes that on 1 June 2017, Tabcorp irrevocably waived its rights under clause 4.2 of the CLTP Deed to exercise its option to enter into the new Tabcorp Pooling Agreement. This alleviates the problem of the future operator in Western Australia having no access to pooling services.
 [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX]. The Tribunal considers that State governments will have an ability to act strategically to counter the increased market power of a merged entity.
188 The Tribunal is of the view that these observations with respect to RWWA remain accurate. In particular, concerns about access to pooling services for any future WA licensee are overstated, and the Western Australian government is able to legislate to set the parameters within which wagering services are delivered. Through the tax system, advertising laws and trade practices, governments have already shown a willingness to do so.
189 The Tribunal was presented with a series of proposed conditions, with respect to bidding for State licences and pooling services, in respect of the first application. Its assessment of those conditions was as follows:
 The Victorian Racing Interveners have put forward their own proposed set of conditions, in respect of:
(1) bidding for the Victorian Wagering and Betting Licence;
(2) RWWA; and
(3) merger benefits.
 In addition, the Victorian Racing Interveners put forward amendments to the conditions put forward by Tabcorp and amendments to the conditions put forward by Racing.com.
 The Tribunal agrees with the submissions of Tabcorp that the Victorian Racing Interveners’ conditions in relation to the bidding for the Victorian wagering and betting licence, which expires in 2024 or 2026, involve a degree of commercial and political unreality. In some respects, the proposed conditions are anti-competitive in themselves.
 The Victorian Racing Interveners proposed that Tabcorp must submit a “Registration of Interest” and, if invited or able to do so, a bid, for the Victorian licence. The Victorian Racing Interveners also proposed a condition that Tabcorp use its “best endeavours” to ensure that such a bid is successful.
 Given the uncertainty surrounding the Victorian licence, such a condition is unreasonable. It is not possible to know exactly what rights will be available in 2024 and on what terms. In those circumstances, it is not appropriate to require Tabcorp to bid in circumstances where the Tribunal cannot know what bundle of rights that bid would be for. This condition would confer on the Victorian Government and the Victorian Racing Interveners a significant commercial advantage over Tabcorp. It would mean that, in the 2024 bidding process, the Victorian Government and the Victorian Racing Interveners would know that Tabcorp was required to bid and to use its best endeavours to secure the licence or else breach the Tribunal’s conditions.
 The Victorian Racing Interveners proposed a condition whereby, as part of any bid for the 2024 Victorian wagering licence, Tabcorp is required to offer to enter into new agreements with the Victorian racing industry on terms identical to its existing joint venture with the Victorian racing industry. Any such clause has commercial difficulties and is inappropriate.
 The current joint venture arrangement was designed by the Victorian Government, in consultation with the Victorian Racing Interveners, as part of the bidding process for the 2012 wagering licence. Each bidder for that licence had to agree to enter into that form of joint venture if they were successful. Each bidder considered and priced their bids for the 2012 licence on that basis. By contrast, the structure of the Victorian wagering licence after 2024 (or 2026) is unknown. The Victorian Government may not require a successful bidder to enter into any joint venture with the racing industry in 2024, and even if it does, the terms of such joint venture might be materially different.
 In these circumstances, the effect of requiring Tabcorp to agree to offer the same joint venture terms in 2024 may fetter the ability of the Victorian Government to materially alter the structure of the 2024 licence, and would be unfair to Tabcorp.
 The effect of requiring Tabcorp to agree to offer the same joint venture terms in 2024 may be to compel Tabcorp to pay a non-commercial price for that licence. The joint venture terms are the consideration paid by Tabcorp for the 2012 licence. It is likely that the value of the 2024 licence will be materially less than the value of the 2012 licence. In those circumstances, requiring Tabcorp nevertheless to pay the same consideration may be to compel it to pay an amount that is unjustified by the value of the 2024 licence at that time.
 The Victorian Racing Interveners also proposed that Tabcorp be required to ensure that, if it wins the 2024 licence, the Victorian racing industry will continue to receive the same proportionate share of Victorian wagering revenues after 2024 as it does under the current licence. Such a condition fetters the freedom of the Victorian Government to restructure the licence arrangements, likely compels Tabcorp to pay a non-commercial price, and puts Tabcorp at a competitive disadvantage.
 The Victorian Racing Interveners then proposed a condition that would prohibit Tabcorp and RWWA from entering into any agreement that constrains RWWA’s ability to pool with the holder of the Victorian licence in the period 2024 to 2040. The condition would restrict RWWA’s freedom to contract as RWWA sees fit. It may impact adversely on RWWA. RWWA can only pool with the Victorian licensee until 2040, regardless of the identity of that licensee, the quality of the Victorian pool, or the commerciality and competitiveness of the terms on which pooling is offered. If, for example, CrownBet acquires the Victorian licence in 2024, and seeks to impose onerous pooling terms on RWWA, RWWA should be free to seek alternative pooling arrangements with Tabcorp and Tabcorp should be free to offer such pooling alternatives at that time.
 The final proposed condition that the Victorian Racing Interveners sought is to require Tabcorp to guarantee to the PRAs a certain quantum of revenue synergies. The protection is unnecessary because the PRAs are already guaranteed that improvements in Tabcorp’s wagering revenues will be passed on by operation of the various State and Territory revenue sharing arrangements that are in place. In any event, the revenue synergies are “approximate” estimations of the revenue synergies that will be passed on to State racing industries as a result of the merger. Requiring Tabcorp to pay benefits to the PRAs even for unrealised synergies might lessen Tabcorp’s ability to invest and grow its wagering business.
190 The Tribunal’s assessment for the purpose of these Reasons is that conditions relating to bidding for State licences and the provision of pooling services are unnecessary, because no material detriment is likely with respect to either.
191 The Tribunal’s earlier Reasons explained the concerns surrounding the provision of racing media arising from Tabcorp’s application:
THE RACING MEDIA INDUSTRY
 As the owner of Sky Racing, Tabcorp controls the dominant racing broadcaster and holder of racing media rights nationally. With respect to media rights, there are some exceptions to Sky’s dominance. Racing NSW has unbundled its thoroughbred rights, granting exclusive digital rights to the corporate bookmaker, William Hill. The Victorian racing industry has granted non-exclusive digital media rights to Tabcorp, CrownBet, Ladbrokes, Sportsbet, William Hill, and Bet365. Racing.com has won the rights to broadcast vision of thoroughbred racing in South Australia.
 The proposed acquisition will result in the combination of Sky with the totalisator and retail wagering operator in Tatts’ retail jurisdictions (Queensland, South Australia, Tasmania and Northern Territory). The proposed acquisition will therefore result in the vertical integration of the dominant racing broadcaster and holder of racing media rights and the exclusive totalisator and retail wagering operator in all States and Territories (except Western Australia).
 The ACCC submitted that a complex issue arising from this authorisation application is whether or not the proposed acquisition is likely to lessen the competition Sky faces for the acquisition of media rights. If it does, then the proposed acquisition would not only damage the interests of PRAs, as there will be less competitive tension in bidding for media rights, but it would also impact wagering competition by increasing the barriers to expansion by other wagering providers including corporate bookmakers. Further, the ACCC contended there would be the potential for other public detriments, as punters will have less choice in how they can view races (for example, they may not be able to view the race online unless they have an account with Tabcorp).
 The evidence has shown broad support for the proposition that there is a strong relationship between wagering revenue and access to racing vision, particularly in retail venues.
 The pre-eminence of Tabcorp in racing media is linked to its position in the wagering industry. By virtue of its historical position as a major supplier of wagering services, and its current position as the only retail operator in the two largest wagering States, Tabcorp has longstanding relationships with the PRAs of all States.
Racing media rights
 Tabcorp considers that the acquisition of racing media rights is not a market in itself, whereas the ACCC believes there is a distinct national market for the acquisition and sale of racing media content. The Tribunal is inclined to the ACCC’s view; it is also inclined to agree with the ACCC’s statement that focus should fall not on the provision of racing media in isolation, but on the relationship between acquisition of media rights, competition in wagering, and funding for PRAs.
 Therefore, the Tribunal takes the view that whichever market definition is appropriate, it is important that the relationship between the acquisition of media rights, competition in consumer wagering, and the funding of PRAs is considered when assessing the effects of the proposed acquisition.
State of competition for the acquisition of racing media rights
 At present, Sky already has a competitive advantage when bidding for media rights for various reasons.
 However, as already alluded to, there is presently a degree of competition. Racing.com currently has the digital and free-to-air media rights in respect of Victorian thoroughbred racing. Racing.com assists Racing Victoria in sublicensing non-exclusive rights to live stream Victorian thoroughbred racing to Sportsbet, Ladbrokes, CrownBet, Betfair, Bet365, William Hill and RWWA. William Hill currently has digital rights to stream New South Wales thoroughbred racing to its account holders.
 Thus, rivals to Sky have been able to acquire certain limited media rights in New South Wales and Victoria despite Tabcorp holding the retail wagering licence in the relevant state. There is evidence that the relevant New South Wales racing body and Victorian racing body may have a greater degree of countervailing power due to the quality of racing product, compared to smaller racing jurisdictions. However, the Tribunal takes the view that other racing bodies do have a sufficient degree of countervailing power to negotiate appropriately for media rights, and will have after the proposed merger.
 In South Australia, TRSA has decided to award its rights to Racing.com. There are two elements of this agreement that the ACCC considers are of particular relevance to the Tribunal. [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XX]
 While TRSA’s decision to award its rights to Racing.com is likely to be of significant assistance to Racing.com’s efforts, the Tribunal accepts that Racing.com’s portfolio of media rights and racing content remains significantly smaller than that of Sky, and is likely to remain so in the near term.
Will the proposed acquisition alter the incentives for PRAs to provide exclusive rights to Sky?
 Each PRA periodically grants media rights in respect of its races. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXX XXX]
 The decision by a PRA to grant media rights to a particular entity can affect the amount it receives as a share of wagering revenue because:
(1) Vision of a race is an important driver of wagering on that race, so it is in the interests of a PRA to grant rights to media providers which will prioritise that PRA’s races (especially in their home jurisdiction) and which will reach the largest number of punters; and
(2) Product fee and race fields fee payments to each PRA from wagering providers are dependent upon factors including wagering turnover, or revenue of those wagering providers on that PRA’s races.
 When determining which entity to award media rights to, a PRA must weigh up these considerations. The consequence of the trade-off is also changing over time as digital becomes a more important platform for wagering services. However, payments from State retail licensees remain the single most important source of income for PRAs.
 For this reason, if the proposed acquisition occurs, the PRAs will face a change to their trade-off calculations identified above. This is because PRAs in States where Tatts is presently the tote operator currently have no financial relationship with Tabcorp. This will change under the proposed acquisition, however, and will provide PRAs in these States with some increased incentive in favour of granting rights exclusively to Sky in the former Tatts jurisdictions.
 Sky has a practice of seeking exclusive and bundled media rights, so that it controls the rights to broadcast racing content across free-to-air TV, pay TV, and all digital rights including online streaming. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXXX]
 Whilst then there may be some increase in the incentive of racing bodies to provide exclusive media rights to Sky, there are countervailing factors which need to be considered to which the Tribunal will come, including the position of the sellers of media rights, a topic which the Tribunal will address.
Will the proposed acquisition alter the incentives for Sky and potential rivals to acquire media rights?
 The value of media rights to Sky is influenced by different factors to those affecting the value of the same rights for its rivals. Because Sky is owned by Tabcorp, Sky’s strategy with media rights is aimed not only at benefitting Sky itself, but also benefitting Tabcorp’s broader wagering operations. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XX]
 If the proposed acquisition proceeds, Tabcorp’s wagering operations will be larger. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX] The evidence shows that this increase in size increases both the benefits to Tabcorp of having exclusive access to racing vision (by enabling it to protect and grow its market share), and also the risk of not having exclusivity. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXX]
 Tabcorp contended that it already seeks to acquire media rights on an exclusive and bundled basis. Of course, the fact that Tabcorp already has an incentive to acquire media rights on an exclusive and bundled basis does not preclude the possibility in theory of it having a greater incentive to do so in the future if the proposed acquisition occurs.
 However, the Tribunal takes the view that an increase in Sky’s incentive to secure media rights would constitute a benefit to the sellers of such rights, since they ought to be able to command a higher price. The Tribunal does not take the view that the increase in Sky’s incentives in this way overlooks the extent to which its dominance in racing media, coupled with its vertical integration into wagering operations, will affect the wagering market in a future with the proposed acquisition.
 Nevertheless, the ACCC further contended that in the future with the proposed acquisition potential rivals’ incentives to acquire racing media rights may decrease due to the removal of Tatts as a potentially significant purchaser of racing vision, including digital racing vision. This may reduce the value to the rival bidder of acquiring media rights. Tabcorp may therefore be less constrained in relation to the price which it offers to acquire the exclusive media rights.
 Also, the ACCC contended that post-acquisition Tabcorp intends to impose the requirement that venues obtaining its retail wagering services in the Tatts States acquire Sky Racing. At present, Tatts does not dictate the business from which its venues obtain racing vision. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX]
 Accordingly, it was said by the ACCC and Racing.com that the proposed acquisition may impact the market for the acquisition of media rights by increasing the value to Tabcorp/Sky of acquiring exclusive media rights, and by virtue of the removal of Tatts as a likely customer of those rights, decreasing their value to Sky’s competitors. This increases the likelihood of Sky acquiring rights on an exclusive and bundled basis.
 The Tribunal makes this initial response to these contentions.
 Retail venues (pubs and clubs) are primarily in the business of providing food and beverages in social environments. The opportunity to wager increases the attractiveness of their venues to customers, and therefore their food and beverage turnover. The merger will align the interests of the retail licensee and racing vision suppliers in Tatts States, whereas previously each had incentives to try separately to exert market power over retail venues that wanted to provide wagering as part of their in-venue entertainment (a variation of the double marginalisation problem). With or without the merger, there is increasing likelihood that venues will be able to stitch together a form of wagering entertainment that does not rely on purchasing retail wagering services from a retail licensee and racing vision from Sky, for instance by displaying only Racing.com vision and relying on facilitating on-line wagering through offering free wifi. This is clearly likely to represent an inferior, although not necessarily less profitable, alternative to the Merged Entity’s wagering/vision products for as long as Racing.com or another rival is unable to offer wall-to-wall coverage of racing events. The Merged Entity has an incentive to package access to retail wagering and to vision in a way that maximises its combined retail service and vision fees and additional wagering revenue. It is not immediately obvious that this would necessarily be opposed to the objectives of the retail venue operator, to increase custom and possibly share in wagering turnover.
 A quick recap of the current state of the market for the acquisition of racing media rights shows why the merger is not likely to create a substantial lessening of competition with respect to racing media. First, the sale of racing media rights is the result of a bidding contest. Secondly, Dr Forbes of Racing Qld, Mr Watters of TRSA and Professor Yovich of WATC made clear to the Tribunal that they believe their PRAs can set the parameters of the bidding contest as they see fit. If they choose to prioritise an up-front payment, it is likely to be to Sky’s advantage; if they choose to prioritise maximum exposure of their racing product to the Australian wagering market, it is likely to be to the advantage of a bidder such as Racing.com that commits to sub-licensing their content to as many platforms as possible. Thirdly, in Tabcorp’s retail jurisdictions of Victoria and New South Wales, thoroughbred digital vision has already been licensed to non-Sky entities, whether a corporate bookmaker or Racing.com. South Australian thoroughbred racing was similarly recently licensed to Racing.com, despite the possibility of Tabcorp acquiring Tatts, and therefore acquiring the exclusive South Australian wagering licence.
 There will clearly continue to be value in the acquisition of media rights in Tatts jurisdictions, even if Racing.com must deal with Tabcorp/Sky (rather than Tatts) in supplying vision to the retail network. If Tabcorp/Sky bids high for the exclusive rights, loses the contest to Racing.com, then negotiates non-commercially with Racing.com for the sub-licence, it risks not having vision of the local racing content in its exclusive retail network, to the detriment of its wagering returns, to the detriment of its relationship with the local PRAs and third-party wagering venues, and to the detriment of the value of its exclusive licence. Racing.com (or any other successful acquirer of the media rights at an over-bid) and Tabcorp/Sky will, over the course of negotiation, establish the value of vision to Tabcorp’s retail wagering network. Because it is non-exclusive, it does not deny vision to rival corporate bookmakers, so the value to Sky of non-exclusive rights is likely to be less than the bid made by Tabcorp/Sky to the PRAs for exclusive rights. It then remains for Racing.com to make up this shortfall and earn any profits through similar negotiations with corporate bookmakers, free-to-air networks and so on.
 The Tribunal acknowledges that, in a future with the proposed acquisition, Tabcorp would have a degree of control over what vision is shown in more retail outlets (ie with the addition of outlets in Queensland, South Australia, Northern Territory and Tasmania). In consequence, the threat of Tabcorp refusing to display a rival broadcaster’s racing vision in the retail agencies, or excluding this vision from the wagering zone of licensed venues, if a rival was awarded broadcast media rights, may be more commercially significant. That is, the threat not to show a PRA’s races in the retail outlets may carry significantly more weight because it would apply to a substantially greater number of venues.
 Of course, some races may be so important to Tabcorp’s wagering revenue that this threat would not be credible (that is, Tabcorp would have a clear incentive to show a rival broadcaster’s vision in its outlets in the event that Sky did not have rights to it).
 However, the Tribunal is of the view that there is no competitive harm that is likely in relation to the matters put forward by the ACCC and the interveners. As the summary above alludes to, a number of matters need to be remembered and put in context.
 The Tribunal is of the view that the comments of Mr V’landys (of Racing NSW) are accurate when he stated:
I am of the view that the suggestions that the Proposed Transaction will have any impact on competition in the market for broadcasting of racing vision is a complete furphy. I am also of the view that the efforts by the intervening parties … to assert otherwise are simply opportunistic attempts by competitors of Tabcorp and Tatts to use the application to the Tribunal to improve their financial position and/or to damage Tabcorp and Tatts. Again, I stress that nothing changes from the current situation for media rights if the Proposed Transaction proceeds.
 Tatts has never sought to acquire vision rights nor does it intend to do so in the future. With the exception of Tasmania, Tatts has no involvement with negotiations between pubs and clubs on the one hand and Sky Racing on the other.
 The merger does not combine any media assets, as Tatts does not compete in this area, and has no plans to in the future. The position of Sky is not enhanced by the merger. The merger changes will put Tabcorp in a weaker bargaining position vis-à-vis the PRAs by reason of Tabcorp’s increased dependence on obtaining those media rights. That bargaining position is accentuated by the relatively recent emergence of Racing.com as a competing purchaser of those rights. Therefore, PRAs will continue to benefit from that competition post-merger.
 As to the possibility that Tatts would partner with a media company as a competitor to Sky, this seems unlikely. We accept the evidence of Mr Cooke in this regard. Mr Cooke’s evidence is as follows:
• Tatts has never, in the past, had any interests in acquiring media rights or distributing racing vision;
• Tatts becoming involved in media would involve “a significant shift in Tatts business”;
• That if the merger does not proceed, he cannot see “any circumstances in which Tatts would be a bidder for media rights”;
• When cross-examined about this, Mr Cooke stated:
It’s just not a space where we see ourselves as adding any value or being experts in. The media space is Sky and Racing.com. I mean, they are broadcasting businesses. They are full TV stations. I mean, Racing.com leverages off the Seven West Media media expertise, and Sky Channel was a standalone media business which was acquired by Tabcorp back in – sorry, in the – in the mid – I think 1995, or thereabouts. So they were full, freestanding broadcast businesses, and it’s just not a space we are experts in. We don’t need to be involved in it. It’s not a core skill set, and it’s just not our business.
 The Tribunal notes that Racing.com takes a different approach to media rights acquisition from Sky. It focuses only on thoroughbreds and, at least to date, has not sought exclusive broadcasting rights. The existence of Racing.com has ensured competition in respect of the two most recent competitive processes in respect of broadcasting: Perth Racing and South Australia.
 In respect of Perth Racing, Sky eventually won the tender, but the evidence is consistent that the existence of Racing.com meant that the price paid by Sky for those rights was higher than it otherwise would have been.
 As already mentioned, in South Australia, Racing.com took part in the recent tender process conducted by TRSA, in respect of its media rights. Racing.com has been successful in winning from TRSA the rights to broadcast vision of thoroughbred racing in South Australia. Racing.com and Sky have now executed a sub-licence under which Sky will also broadcast South Australian thoroughbred racing. Racing.com was successful in that process without any strategic or other media partnership with Tatts.
 It is also clear that Racing.com intends to compete for the next available thoroughbred media rights in Queensland in 2020.
 The existence of Racing.com and its ability to take an active role in recent tenders for thoroughbred rights is a further reason that the merger will make no difference in respect of media rights. Racing.com’s success in the TRSA process is the natural experiment that demonstrates its current ability of Racing.com to compete with Sky. The merger does not change that ability.
 In relation to the contention that PRAs do not appreciate the value of “unbundled” media deals, the most recent PRA to award its media rights was TRSA. During his cross-examination, Mr Watters described the process as follows:
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 Mr V’landys of Racing NSW summarised the position:
The assertion also incorrectly, and quite offensively, infers that the racing bodies that hold the media rights (Rights Holders) are not sufficiently sophisticated or commercially savvy to adequately deal with their media rights, including the bundling of exclusive rights with non-exclusive rights. That is simply not the case. As stated in my First Statement, racing is, and has always been, funded overwhelming from bets placed on racing events (wagers). Vision is the principal driver of wagering and all racing administrators throughout Australia are acutely aware of the importance of vision and the need to maximise the benefits coming from vision, which is the driver of wagering, racing’s main source of revenue.
 Similar evidence is contained in statements from other PRAs.
 As alluded to already by the Tribunal, the competitive and increasingly dynamic nature of the Australian racing media market can also be seen through:
(1) the fact that Racing NSW has unbundled its thoroughbred rights and granted exclusive digital rights to the corporate bookmaker, William Hill;
(2) the Victorian racing industry having granted digital media rights on a non-exclusive basis to Tabcorp and a number of corporate bookmakers (CrownBet, Ladbrokes, Sportsbet, William Hill, Bet365); and
(3) the free-to-air carve outs which are commonly included in exclusive subscription rights packages secured by Sky.
 The evidence indicates that PRAs understand these market dynamics and occupy a strong bargaining position. This is the case not only in Victoria and New South Wales, which are Tabcorp jurisdictions, but elsewhere, including as evidenced by the recent tender process in South Australia.
 In relation to the contention that the merger will weaken the bargaining position of the PRAs, the Tribunal accepts the following contentions of Tabcorp:
(1) The PRAs will be keen to have their product on Sky, because they would otherwise not have full access to a segment of the market, being primarily punters in retail venues that have a Sky subscription. In that sense, Sky has a reasonable bargaining position relative to the PRAs, but that is unchanged by the merger.
(2) The alignment of Sky with the retail licensee in the Tabcorp States does not increase the bargaining position of Sky.
(3) In the Tabcorp States (Victoria, New South Wales and Australian Capital Territory), Tabcorp has a compelling reason to ensure that Sky has all media rights available on its wall-to-wall channels, because Tabcorp needs that vision to underpin its wagering revenues in those States.
(4) In the Tatts States (Queensland, South Australia, Northern Territory and Tasmania), Tabcorp currently does not have that compelling reason. Sky requires the media rights to underpin its broadcasting revenue but those rights do not underpin Tabcorp’s wagering revenue (except for the more limited reason that it has online or telephone customers in Tatts States).
(5) Following the merger, Tabcorp would become the retail operator in the Tatts States. It would then have a stronger incentive to obtain media rights across all jurisdictions in order to support its wagering revenue across its broader retail network. This strengthens the bargaining position of PRAs and weakens the bargaining position of Tabcorp, relative to the position without the merger. Tabcorp will be more dependent on those rights than it was when it did not have the same wagering-based incentive in the Tatts States.
 When the above matters were put to Mr Catterall (the CEO of Racing.com) during cross-examination, he did respond that [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX X] However, that position exists today, and is unchanged by the merger. In the Tribunal’s view, despite the response of Mr Catterall, the merger improves the bargaining position of the PRAs, and the contentions made by Tabcorp are sound.
 The change in the bargaining position was appreciated by Mr Forbes (of Racing Queensland). When cross-examined about the change that the merger would bring about, he said as follows:
MR FORBES: [T]hat imperative to ensure that Queensland racing product is broadcast through the retail network on Sky Racing, that could be used as a very powerful bargaining point in 2020 to persuade Racing Queensland, or, if the rights are disaggregated, the clubs, to enter into a deal with Sky by which media rights are conferred on Sky.
COUNSEL: Do you agree with that?
MR FORBES: I think it works both ways, because it’s in the interests of a merged entity to have Queensland customers wager on the product they’re most familiar with, which is local Queensland product, and so there is a codependence in any negotiation in that regard.
 Mr Forbes continued, in re-examination [XX XXX XXXXX XXX XXX XXX XXX]:
COUNSEL: [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XXX
MR FORBES: XX XXX XXXXX XXX XX
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COUNSEL: XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XX
MR FORBES: XX XXX XXXXX XXX XXX XXX XXXXX XXXX]
 Mr V’landys stated:
There is also no basis for the assertion that the merged entity of Tabcorp and Tatts would have greater bargaining power in respect of acquiring media rights. The converse should apply as vision is fundamental to the wagering operations of Tabcorp and Tatts. They must have it in their retail network in order to be able to generate wagering. The merged entity would have the increased challenge of having to ensure that it is able to provide racing vision from every jurisdiction to every venue in its retail network throughout Australia.
 Various other PRAs also provide evidence that Tabcorp obtaining the retail wagering licence would either not alter or improve their bargaining position in relation to media rights. Professor Yovich describes the suggestion that the tote operator has an ability to leverage the position into media rights negotiations as “fundamentally misconceived”.
Previous conduct of Sky and Tabcorp
 The ACCC and the interveners referred to various behaviour of Sky and Tabcorp which is said to be improper or tends to show a course of conduct that may be repeated. These fall into the following categories:
(1) The ability of Sky to influence wagering turnover by shifting the race from one Sky channel to another or by refusing to broadcast a race altogether;
(2) The ability of Sky to impose ‘blackouts’ of racing vision; and
(3) Sky’s recent communications to venues in respect of the CrownBet/ClubsNSW proposal which is said to show that Tabcorp/Sky used its position in respect of broadcasting to influence venues’ decisions about whether to continue to provide Tabcorp’s wagering services in New South Wales.
 The Tribunal does not need to consider in any detail these three categories of prior conduct. The Tribunal observes that the merger makes no material difference to the current position. Any ability that Sky or Tabcorp has to behave in the manner alleged is the same with or without the merger. Further, to discern any propensity to act in a particular way on the part of Sky or Tabcorp would involve an analysis of all the circumstances surrounding the alleged behaviour, which the Tribunal cannot undertake on the evidence or material before it.
 Nevertheless, the Tribunal makes an observation on ‘blackouts’. There was some attention given to Tabcorp/Sky’s decision to cease broadcast of certain racing content in the past, and generally at critical moments in negotiations between Tabcorp/Sky and PRAs or other retail wagering operators. These ‘blackouts’ caused an understandable degree of frustration on the part of the racing industry, wagering service providers, and wagering venues. There is no doubt that blackouts impact on the relationship Tabcorp/Sky has with PRAs, with venue operators, and with consumers. The consumer wagering market is experiencing shifts from retail to online, and from racing to sports wagering. In the face of these trends, the Tribunal notes that blackouts are entirely counter-productive, and are even likely to accelerate these trends, to the detriment of PRAs and wagering venues. However, the existence of blackouts in the past does not tell the Tribunal anything about anti-competitive detriments that may arise in the future as a result of the merger. In addition, there was some evidence that these concerns may be overstated, particularly where a competitive digital streaming service was available. [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX]
Particular contentions of Racing.com
 The Tribunal should make mention of two particular submissions made by Racing.com.
 Racing.com made the particular point that it must be inferred that Tabcorp/Sky will seek to leverage its advantage as the monopoly supplier of the wall-to-wall racing vision service to foreclose its wagering rivals from having access to racing vision or otherwise risk eroding the competitive advantages conferred by Sky and the retail network. In this endeavour, it will be particularly important for Tabcorp to limit or prevent the flow of racing vision to corporate bookmakers’ online wagering platforms, and it will also be desirable to retain limits on the extent of free-to-air broadcasting, particularly as such broadcasting can integrate advertising by rival corporate bookmakers.
 Racing.com also observes the following. Tabcorp/Sky has existing market power through its ‘wall-to-wall’ Sky Racing service. This power is primarily derived from Sky’s suite of contractual rights for racing vision, together with its exclusive control of the retail network where that vision needs to be shown in three of the eight State or Territory jurisdictions. Further, Tabcorp has a strategy to leverage its retail monopoly assets into digital wagering. Post-merger, its control of access to the retail network will expand to seven out of eight jurisdictions. Post-merger, these considerations are likely to drive Tabcorp/Sky to utilise its strengthened monopoly grip on access to the wall-to-wall service to secure exclusive and bundled media rights, including free-to-air and digital, and to warehouse them. It has the economic incentive and ability to do so. Racing.com concluded that this will have detrimental effects on downstream wagering markets and the wagering public, and ultimately be to the detriment of the racing industry.
 In relation to media rights, the Tribunal considers that the answer to the submissions of the ACCC, the interveners and in particular Racing.com is as previously postulated. The merger materially changes nothing in respect of the media landscape other than putting Tabcorp in a weaker bargaining position vis-à-vis the PRAs by reason of Tabcorp’s increased dependence on obtaining those media rights. That bargaining position is accentuated by the relatively recent emergence of Racing.com as a competing purchaser of those rights. PRAs will continue to benefit from that competition post-merger.
192 The ACCC asserted that:
the proposed acquisition will result in the vertical integration of the dominant racing broadcaster and holder of racing media rights and the exclusive totalisator and retail wagering operator in all states and territories (except Western Australia), and this may lessen competition for the acquisition of media rights by lessening competitive tension in bidding for media rights and increasing barriers to expansion for other wagering providers to acquire those rights.
193 Racing.com explained that the introduction of regulatory changes such as a POC tax would provide the Merger Parties with advantages over rival wagering service providers, and that this would widen the competitive advantage of the Merged Entity in digital streaming. This argument fortifies the Tribunal’s starting point: that “focus should fall not on the provision of racing media in isolation, but on the relationship between acquisition of media rights, competition in wagering, and funding for PRAs”: at . The Tribunal was not taken to any other evidence arising since 22 June 2017 which changed its earlier assessment of alleged detriments arising from the merger in racing media.
194 Nevertheless, Racing.com made the following submissions in response to the Reasons accompanying Application by Tabcorp Holdings Limited  ACompT 1:
(a) The Reasons primarily focussed on the position of the PRAs in assessing anti-competitive harm arising from the merger. The Reasons did not consider the detriments arising from Tabcorp’s ability to raise its rivals’ costs (in both wagering and media markets), even where Tabcorp is not the successful bidder for media rights.
(b) The conclusions in the Reasons concerning the countervailing power of the PRAs in relation to Tabcorp overstate the extent of that countervailing power. The Reasons largely accept the witness evidence of PRAs without giving sufficient weight to the actual concerns (in the case of Racing Queensland) or actual practices (in the case of the TRSA) or Western Australia by [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX X].
(c) The conclusions in the Reasons at  concerning the lack of intention of Tatts to acquire media rights are, if made in respect of digital rights, incorrect.
195 The proposition in (a) is a complex one. It starts with the idea that Tabcorp does not face competition in accessing the rights to broadcast ‘wall to wall’ racing content, because the only other participants in retail wagering services – Tatts and RWWA – do not negotiate directly with racing bodies to access these rights, preferring instead to sub-license from Sky Racing. This treats Sky Racing and Tabcorp’s wagering divisions as one entity with identical objectives, which may not be an entirely accurate assessment, but that is not material. Having excluded Tatts and RWWA, it then rests on the idea that Sky Racing will pay more for racing media rights than a digital-only broadcaster, that this will occur to a greater extent because of the merger, and that this is a competitive detriment, presumably for the reason that Sky Racing’s higher bid is predatory. Why would Sky Racing be readying itself to pay more for racing media rights after the merger?
It cannot be due to the Merged Entity becoming the only bidder with the capacity to use those rights in retail outlets, because there is no theoretical rival bidder who can use those rights, remembering that Tatts and RWWA have only ever been theoretical rival bidder/users for wall-to-wall broadcasting rights;
It cannot be because the Merged Entity has gained wall-to-wall content that it can now use in seven retail jurisdictions instead of three, because it has lost the opportunity to recover some of its costs by sub-licensing to Tatts;
It cannot be because it wants to prevent other broadcasters from attaining media rights in order to retain exclusivity of content, because it already does this. The Tribunal takes the view that it will continue to do so in a future without the merger, and the proposed merger changes nothing;
If it is because the Merged Entity has become more reliant than previously on maintaining a strong relationship with racing bodies in the Tatts jurisdictions, this simply demonstrates the countervailing power of those racing bodies to restrain any anti-competitive conduct by the Merged Entity when bidding for racing media content.
196 If the racing bodies choose to bundle their digital and retail rights, that is a matter for them. Whether they choose to sell exclusive or non-exclusive rights is a matter for them. Whether they choose to prioritise up-front licence fees or maximum digital distribution is a matter for them. Whatever they choose, their practice is to sell their rights via an extended period of negotiation. The submission by Racing.com requires the Tribunal to conclude that in the ‘future with’ the proposed merger, with respect to the process of bidding for racing media rights, the terms of the auction having been set by the vendor, a competitive detriment will arise either in the sale of racing media rights, or in a downstream market (consumer wagering services), because a non-bidder (Tatts) has been removed. Having considered the submission, the Tribunal is of the view that the rules of any bidding process will be set by the vendor, ie the racing bodies. Any increase in the racing authorities’ dependence on the Merged Entity to gain media exposure of their racing content can be countered by setting those terms in the most advantageous fashion for those authorities.
197 As regards (b), the practices of racing authorities and their dealings with racing media licensees demonstrate that they have a degree of countervailing power. Racing Queensland and Tabcorp agreed upon a deed [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XX] TRSA was not compelled to give Sky Racing an exclusive licence to deal with its racing content, instead entering agreement with Racing.com. RWWA’s comments reflect the racing industry’s antipathy towards corporate bookmakers who are perceived (rightly or not) to contribute less to the industry than tote wagering operators. We do not accept that the countervailing power of racing authorities was previously overstated. We are reinforced in our position by CrownBet’s submission that:
[S]ince corporate bookmakers have had access to digital vision of Victorian thoroughbred races, the growth in wagering on Victorian races has been twice the growth in New South Wales.
198 This supports the Tribunal’s earlier contention that racing authorities have the capacity to frame the terms upon which their valuable media rights are licensed: Application by Tabcorp Holdings Limited  ACompT 1 at . It is a matter of those racing authorities determining whether to prioritise upfront licence fees or broader digital broadcast of their racing content. In any event, if there is a question of the existence of countervailing power in respect of smaller racing bodies, then this is a function of their size, and not a function of a future Tabcorp’s size with or without the merger.
199 As regards (c), the Tribunal accepts that Tatts has in fact acquired digital media rights for its online platform, and will continue to do so. The Tribunal made its earlier conclusions in the context of the market for media rights, by which it meant that Tatts showed no interest in becoming a provider of media rights through acquisition and sub-licensing of those rights. The Tribunal’s current view is that Tatts has shown no interest in becoming anything more than an acquirer of racing media rights to support its own retail and online wagering services. It is pure speculation to suggest that at some future time Tatts will deal with racing bodies directly, acquire racing content for its own purposes, and sub-license content to recoup some of its investment. In the future without the merger under the Tribunal’s preferred counterfactual, this does not arise.
200 Specific conditions were proposed in respect of the first application to alleviate any detriment in racing media that may arise from the proposed merger:
 The Tribunal should mention that it considered the imposition of conditions relating to media, many of which were formulated by Racing.com. The Tribunal has come to the view that none of the proposed conditions are necessary to address any competitive detriment. Some would have undoubtedly assisted the commercial position of Racing.com. It is important to keep in mind (putting aside any residual discretion) that conditions will normally be imposed to address any competitive detriment which arises from the merger itself. As the Tribunal has come to the view that no competitive detriment arises in respect of media rights from the merger, no conditions should be or need be imposed in this regard.
 The Tribunal makes some general observations about the conditions proffered by Racing.com without going into their detail. To the extent that the proposed conditions are directed to existing contractual provisions and seek to disturb current contractual arrangements, there is no reason shown for the Tribunal to interfere with these existing arrangements. In addition, the contractual provisions will exist both with and without the merger. To the extent that the proposed conditions seek to prohibit Sky from obtaining any rights from the PRAs on an exclusive or bundled basis, again there has been no reason shown to the Tribunal to impose such conditions.
 Further, to the extent to which the conditions impose some restriction on Sky bidding for media rights, they may prove to be a significant encumbrance on the competitive process now, or in the future, if circumstances were to change.
 The Tribunal also observes that the PRAs have had the chance to consider the proposed conditions and do not think they should be imposed. The evidence from the PRAs is that conditions of the type proposed would be detrimental to them and may prevent them from obtaining maximum value during their negotiations with Sky. As one example, Mr Watters stated:
[XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX]
 The Tribunal is of the view that the relevant PRAs are well placed and have sufficient countervailing power to negotiate in a competitive environment even with the leverage of the nature suggested by the ACCC and the interveners. The future strategies of the PRAs should be left to them to determine. If they wish to adopt a broader distribution strategy, it is readily apparent that PRAs are in a position to either negotiate this with Sky (for example, by way of a ‘use it or lose it’ rights clause) or to deal with Racing.com.
 The Tribunal has reached the view it has even keeping in mind that after the merger the PRAs in the current Tatts jurisdictions may have an increased incentive to award media rights to Sky, that Tabcorp wagering operations will be larger, and that Sky/Tabcorp could have greater bargaining power in negotiations with PRAs for media rights because Tabcorp would control more venues. However, as the Tribunal has indicated, there are many countervailing factors.
201 Given that the Tribunal has concluded that the merger will not lead to material detriment in delivery of racing media services or the bidding for racing media rights, it remains of the view that the proposed conditions are unnecessary.
202 The Tribunal takes the view (based upon its earlier Reasons, and these Reasons) that the merger will not lead to any material lessening of competition in the delivery of racing media services or the bidding for racing media rights, nor would any detriment be likely to arise.
203 The Tribunal had earlier made some conclusions with respect to gaming services:
THE GAMING SERVICES INDUSTRY
 Inputs into the operation of electronic gaming machines include hardware and software, monitoring services, gaming systems and services, field services, and the day-to-day operation of EGMs in retail venues. The Merger Parties do not participate in the manufacture or supply of EGM hardware, nor do they operate EGMs on a day-to-day basis in retail venues. While the provision of services by the Merger Parties are complementary to EGM hardware manufacturing and day-to-day operation, the ACCC did not raise the possibility that the merger may cause public benefit or detriment to arise in the provision of EGM hardware or day-to-day EGM operations. Therefore the Tribunal did not need to consider any effect of the merger on the supply of these related products.
 Monitoring services, gaming systems and service, and field services are collectively referred to herein as ‘EGM services’. EGM services providers in Australia include TGS, Intecq, eBet and Odyssey Gaming (owned by Tabcorp); Maxgaming, Bytecraft and UBET (owned by Tatts); and rivals including Aristocrat, Bally/Scientific Games Corporation, Konami, Progressive Venue Services, Global Gaming/Utopia/Banktech, and IGT, amongst others. Broadly speaking, these suppliers provide a range of EGM services, notwithstanding some differences in the suite of services offered by each operation.
 The operation of EGMs is subject to legislative and regulatory restrictions. Monitoring services are systems installed for compliance with regulations to do with taxation, restrictions on the location of EGMs, and the provision of other information.
Gaming systems and services
 Gaming systems and services assist venue operators to optimise EGM performance, including assistance with financing, training, venue design, product advice, marketing, loyalty programs, and (non-monitoring) regulatory compliance. For the purposes of this determination, the expression ‘gaming systems and services’ is used as a broad catch-all to describe all of these services, but there are differences in the suite of services offered by each supplier.
 ‘Field services’ is used to describe EGM repair and maintenance services at the site of operation. There are some minor differences in categorisation: for instance, Tabcorp considers field services to include repair and maintenance of hardware, whereas Tatts considers it to include both hardware and software.
A substantial lessening of competition in a market?
 EGM support services may be delivered as an integrated (or ‘bundled’) solution, or on a stand-alone basis. A venue may (for instance) enter into a contract with a supplier for monitoring services, and enter into a separate contract with another supplier for field services. In most jurisdictions, a single operator is licensed to provide monitoring services, and therefore is the only operator in that jurisdiction that could provide a bundled package. Exceptions exist in Queensland, where more than one supplier is licensed to provide monitoring services; in the Northern Territory, where multiple suppliers may be licensed, although there is only one at present; and in the Australian Capital Territory, where monitoring of EGMs is performed manually without necessitating an external monitoring service provider.
 In the original application for informal clearance, the ACCC and Tabcorp had come to an understanding that with respect to EGM services, the only anti-competitive concerns arising from the merger arose from the combination of the Queensland businesses. Tabcorp applied for formal authorisation from the Tribunal offering, as a condition of authorisation, an undertaking pursuant to s 87B of the Act to divest the Odyssey business. The Tribunal agrees that any concerns with respect to a substantial lessening of competition in any market for EGM services were dealt with by this undertaking.
 A submission from Mr Kelly, General Manager of the Arana Leagues Club, outlined some broader concerns regarding potential predatory pricing and discriminatory pricing. However, it appears that this submission took as its starting point that Tabcorp will retain some elements of the Odyssey business. The condition of this authorisation makes it clear that Tabcorp undertakes to divest all of the issued share capital in Odyssey Gaming Limited. This undertaking allays any anti-competitive concerns held by the ACCC.
Alleged detriments arising from data misuse
 Another concern was raised by the ACCC with respect to potential data misuse by the Merged Entity in its New South Wales EGM services business. Maxgaming (currently owned by Tatts) is the exclusive monitoring operator in New South Wales until 2032. Tabcorp (through TGS and Intecq) supplies in-venue gaming systems and related services in New South Wales.
 Two issues were raised in respect of these matters:
(1) Mr White (of Club Central) identifies a concern that Tabcorp may use commercially sensitive information obtained in its capacity as the exclusive provider of monitoring services for the purpose of assisting its own gaming systems and services; and
(2) the ACCC report referred to the possibility of Tabcorp (as monitor) foreclosing competing suppliers of gaming systems and services by reducing or restricting the functionality of competing gaming systems that operate through its monitoring system.
 In both cases, Mr Rytenskild (Chief Operating Officer, Keno & Gaming: Tabcorp) provided detailed evidence of the regulatory and contractual obligations imposed upon Tabcorp which prevent the suggested misuse of data or foreclosure of competing suppliers.
 The ACCC’s position on these issues (in opening remarks) was:
• that it was unable to reach a concluded view on the effectiveness of the deterrents referred to by Mr Rytenskild; and
• that it would ask witnesses various questions on this topic during the course of the hearing.
The Tribunal notes that Mr Rytenskild was not cross-examined and no other witness was asked questions on either topic.
 The ACCC was concerned that the following matters are possibilities:
(1) Tabcorp engaging in criminal conduct;
(2) that this conduct would not be detected, punished or enforced by a State regulator; and
(3) that such conduct would be concealed.
 The Tribunal accepts Mr Rytenskild’s evidence and concludes that no competitive detriment arises in respect of EGM monitoring in New South Wales.
 Tabcorp’s various legal, regulatory and contractual obligations mean that there is no real prospect of Tabcorp misusing the information obtained from monitoring EGMs.
 There are numerous requirements in the legislation, regulations and contractual terms which would prohibit that use of the information. Contravening the legislation could result in suspension or cancellation of Tabcorp’s monitoring licence. Tabcorp’s licences are its most valuable assets and it is highly motivated to ensure appropriate measures are in place so breaches do not occur. In addition, Tabcorp recently entered into memorandums of understanding (‘MOUs’) with AHA NSW and ClubsNSW. The MOUs provide that, subject to completion of the proposed merger, Tabcorp will adhere to various principles of independence and implement certain governance and data protection regimes, in connection with the Maxgaming monitoring business in New South Wales.
 Tabcorp has had discussions with the New South Wales regulator, Liquor and Gaming NSW to discuss the proposed merger. Tabcorp has made various commitments to them that will ensure that it continues to comply with obligations under the New South Wales monitoring licence, including commitments regarding operational independence.
 A further matter raised in the ACCC report was the possibility of Tabcorp (as monitor of EGMs) foreclosing competing suppliers of gaming systems by reducing or restricting the functionality of competing gaming systems that operate through the monitoring system. The Tribunal accepts the submissions of Tabcorp that this is not a valid concern because:
• under the current EGM protocol (‘X-series’) in New South Wales, there is no ability for the supplier of monitoring services to affect the functionality or operation of third-party gaming systems;
• New EGM protocols (‘G2S’ and ‘QCOM’) being introduced in New South Wales will involve some connection between the monitor and gaming systems providers. However, under Maxgaming’s new monitoring licence in New South Wales, Maxgaming will be [XXXX XXXX XXXXX XXX XXX X XXX XXXXX XXXXXX XXXXX XXXX XXXX XXXXX XXX XXX X XXX XXXXX XXXXXX XXXXX XXXX XXXX XXXXX XXX XXX X XXX XXXXX XXXX].
 In Tabcorp’s MOUs with AHA NSW and ClubsNSW, Tabcorp has undertaken to “use its best endeavours to ensure that the new proposed CMS infrastructure (G2S QCOM) will facilitate all existing (operating) technologies and functionalities at no additional cost to relevant existing arrangements”.
 Even if the EGM monitor sought to act to foreclose competing suppliers, this would undoubtedly trigger a regulatory response. For example, under s 136C of the Gaming Machines Act 2001 (NSW) (‘Gaming Machines Act’), the Minister may direct the monitor to provide additional specified services, which could include providing access to monitoring hardware.
 The ACCC accepted there are potentially substantial consequences for the Merged Entity if it were to contravene a provision of the Gaming Machines Act, but nonetheless said the Tribunal must include in its considerations the possible risk of non-compliance. It pointed to the fact that there is no evidence before the Tribunal of any Gaming Machines Act compliance programs proposed to be instituted within the Merged Entity.
 The ACCC also submitted there was a potential detriment that the entity Maxgaming, as the exclusive licensed monitoring operator, may have an incentive not to facilitate the connection of third-party gaming systems and related services once vertically integrated with eBET, the largest supplier of gaming systems and related services. The Merged Entity could do this by refusing to provide, or providing on unreasonable terms and conditions, an interface to third-party suppliers.
 The Tribunal does not consider that Tabcorp has any commercial incentive to act in the way concerning the ACCC. The Gaming Machines Act prevents Tabcorp’s ability to foreclose competing suppliers of gaming systems and related services from accessing monitoring hardware. As already indicated, the Minister has the power to issue a written notice directing a licensed monitoring operation to provide certain additional services and can also alter the condition of the licence issued.
 As to the fact that Tabcorp has not provided evidence of any Gaming Machines Act compliance programs proposed to be instituted within the merged entity, there is no evidence that Tabcorp’s existing governance framework is inadequate to address its obligations under the Gaming Machines Act, legislation under which it already holds a gaming licence.
 Whatever ‘inherent regulatory’ risk there is of improper conduct, this is not a basis for concluding that the competitive detriments identified may lead to a lessening of competition in respect of the supply of gaming systems and related services.
 Finally on this topic, Mr Baldi of Mercury Group Victoria raised concerns regarding the provision of EGM services in Victoria that resembled the concerns of the ACCC with respect to the provision of EGM services in New South Wales. To the extent that those concerns would constitute a breach by the Merged Entity of the legislation and regulations governing the provision of EGM services, the Tribunal returns to its conclusion that the Merged Entity is very unlikely to breach those laws.
204 The ACCC raised a possible detriment with respect to gaming services:
In New South Wales, the proposed acquisition would result in the merged entity being both the sole licensed monitoring operator and a major supplier of gaming systems and related services. The two issues that arise for the Tribunal’s consideration are whether the merged entity would have the ability and incentive to use its position as the licensed monitoring operator to obtain a competitive advantage, and potentially foreclose competitors, in the supply of gaming systems and related services by:
a) misusing commercially sensitive information collected in the course of supplying monitoring services; and/or
b) restricting the operation or functionality of third-party gaming systems and related services.
205 The Tribunal had dealt with this concern in its earlier Reasons in the context of a lessening of competition in the market: Application by Tabcorp Holdings Limited  ACompT 1 at -. No further evidence was placed before the Tribunal to support the existence of this or any other material detriment in the provision of gaming services. The Tribunal has again considered this aspect. The Tribunal takes the view that neither this nor any other material detriment is likely to arise from the merger in the provision of gaming services.
206 The Tribunal earlier stated with respect to these services:
THE LOTTERY AND KENO INDUSTRIES
The lottery industry
 Lotteries are chance-based gambling products. Lottery products include games of chance where winning numbers are randomly drawn from a larger set of numbers, and games where sets of winning numbers are determined by the results of soccer games (‘pools’). They also include games where a set of winning symbols is randomly given to a proportion of consumers in the form of scratch tickets. Players are generally given randomly allocated numbers or symbols, but in some lotteries they may be able to select their own numbers. Consumers win if the set of winning numbers matches their own numbers, or if they are given a combination of matched symbols.
 Lottery suppliers in Australia include Tatts, Jumbo Interactive/OZLotteries.com, Net Lotto, Lottoland and Plus Connect. Of these, the last two are operators selling ‘lottery derivative’ products based on the results of Australian and overseas lottery draws.
 Tatts provides a number of lottery products: Saturday Lotto, Monday and Wednesday Lotto, Oz Lotto, Powerball, Super 66, Strike, Pools, Set For Life, Lucky Lotteries, and instant lottery (scratch tickets). Lottery services are distributed by Tatts through approximately 4000 newsagents, convenience stores and other retailers across all States and Territories except Western Australia. In Western Australia, lottery services are provided by LotteryWest. Lottery products are also available online, and Tatts has over 2 million registered online lottery users. In FY2016, Tatts’ lotteries business (excluding Keno) raised $2.036 billion in revenue.
 In its application for authorisation, Tabcorp categorised its Keno products separately to lottery products, thereby categorising itself out of the market for the provision of lottery services. The ACCC agreed, stating that “[s]eparate relevant markets appear to exist” for lotteries and Keno. Ms van der Merwe, Tatts’ Chief Operating Officer (Lotteries), provided several reasons why Keno and lottery products may not be highly substitutable. They employ different distribution channels: Keno is played in licensed venues, while lotteries are played in retail venues. Lotteries are a once-a-week proposition, while Keno may be played every 3-4 minutes. Participation levels differ [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX]. Lotteries offer prizes of a much larger scale than Keno.
 Ultimately, no participant brought any relevant public benefit or detriment to the Tribunal’s attention with respect to the competitive effects of the merger on the market for the provision of these services. The ACCC broadly expressed a preliminary concern with respect to the extent to which the proposed acquisition may reduce the value of future licences provided by State and Territory governments, with flow-on effects for government revenue. However, the ACCC made no further submissions with respect to the merger’s likely competitive effects in either the tender for these licences, nor in the provision of lottery services to consumers. The non-Tatts interveners were granted leave to intervene with respect to matters in which they brought some special expertise, or bore a special interest. They do not participate in the provision of lotteries, and their silence on this topic was to be expected.
 Tatts currently operates all public lotteries in each State and Territory except Western Australia (which has a government owned and operated lottery). Tatts either has the exclusive right or is the sole operator authorised to provide lotteries in those jurisdictions.
 The Tribunal takes the view that Tabcorp is not a competitor for Tatts’ lotteries business.
The Keno industry
 In its application for authorisation, Tabcorp noted that the Merger Parties are the only suppliers of Keno products in Australia. Tabcorp provides Keno services in Victoria, Queensland and the Australian Capital Territory in TAB retail stores operated by either Tabcorp or Tatts under the exclusive retail licence in that jurisdiction, and in venues licensed for on-premise liquor consumption. Tabcorp also provides Keno services in New South Wales, but only in venues licensed for on-premise liquor consumption, not TAB retail stores. In FY2016, Tabcorp’s Keno business raised $208.5 million in revenue, and $50.7 million in EBIT.
 Tatts earned revenue of $102.8 million in FY2016 from its Keno operations, providing Keno services in South Australia via venues licensed for on-premise liquor consumption, TAB retail stores, newsagencies, convenience stores, supermarkets and chemists.
 As with lotteries, no participant raised any public benefits or detriments with respect to the competitive effects of the merger in the market that includes the provision of Keno services. As with State and Territory lottery licences, the ACCC broadly expressed a preliminary concern with respect to the effect of the merger on the value of future Keno licences. However, this was not further developed in submissions by the ACCC, and unsurprisingly, the non-Tatts interveners remained silent with respect to Keno services generally.
Conclusions: lotteries and Keno
 No competition concerns arise from the merger in the provision of lotteries and Keno, because there is no material overlap in the products supplied by the Merger Parties.
 Tabcorp is the only provider of Keno in retail outlets in Queensland, New South Wales, Victoria and the Australian Capital Territory, while Tatts is the only provider of Keno in retail outlets in South Australia. These retail businesses therefore do not overlap.
 The only possible overlap between Tabcorp and Tatts is in South Australia, where residents can access Tabcorp’s online product, which is extremely limited.
207 The Tribunal is of the view that there are no detriments resulting from the merger in the provision of lottery and Keno services. CrownBet disputed some of the benefits claimed in the provision of Keno services, and these objections are dealt with separately below.
208 Benefits claimed by Tabcorp were divided according to their origins in cost savings or revenue benefits, which were then said to lead to flow-through benefits to the racing industry and the general community as well as to the company and its shareholders. The Tribunal previously summarised the benefits as claimed by Tabcorp, and made the following observations as to public benefits arising from the merger (which it reiterates):
 The Tribunal makes two preliminary observations with respect to public benefits. The first relates to the application of s 95AZH(2). The second is with respect to the overall approach taken by Tabcorp to identify public benefits arising from the merger.
Section 95AZH(2): import substitution
 Tabcorp claims that products supplied by foreign-owned corporate bookmakers are ‘imports’, and Dr Simes assumes for the purposes of his Gross National Income (‘GNI’) analysis that 50% of the claimed revenue synergy [XXXX XXXX XXXXX XXX XXX X XXX] accounts for the substitution of imported goods and services for domestic goods and services, and is therefore a public benefit.
 Leaving aside the per-centage allocation adopted by Dr Simes, there is a threshold issue as to whether any transfer from corporate bookmakers can be considered a public benefit, whether for the purposes of s 95AZH(2) of the Act or otherwise.
 Section 95AZH(2)(a)(ii) provides that, in determining what amounts to a benefit to the public, the Tribunal must regard “a significant substitution of domestic products for imported goods” as a benefit to the public. The basis for Tabcorp’s claim that a transfer from a foreign-owned corporate bookmaker to Tabcorp involves a substitution of domestic products for ‘imported goods’, and thus is a public benefit, is not clear. The issue of import substitution is actually a question of how much of the services sold or supplied in Australia involve inputs from overseas, which is only addressed by Tabcorp and Dr Simes in the form of assumptions.
 Even if the question of foreign ownership of some corporate bookmakers in Australia was determined to be relevant as asserted by Tabcorp, significant complexities would arise in trying to determine the true extent of global ownership. For example, the geographic spread of the share registries of corporate bookmakers and Tabcorp would need to be considered, as would the fact that corporate bookmakers provide services through Australian subsidiaries which are licensed in Australia, pay taxes in Australia, and have offices and employees in Australia (and not all corporate bookmakers are foreign owned).
 General principles from cases that consider whether benefits accruing to a merger applicant’s foreign shareholders are public benefits can be applied to the question of whether revenue transferred from a foreign-owned competitor to the Australian-based applicant for merger authorisation is a benefit. Transfers of revenue from foreign-owned corporations to Australian corporations are not inherently positive, and could be welfare neutral (and hence not constitute a public benefit).
Tabcorp’s approach to identifying public benefits
 Tabcorp drew support for its claimed public benefits from a series of papers presented to the Board, and in particular those presented in September and October 2016, when a merger with Tatts was being considered in the current form (as per the implementation deed which forms the foundation of this authorisation application). These papers include:
• a revisitation of cost synergies previously agreed between the Merger Parties;
• further business improvements leading to forecast revenue increases;
• an overview of the opportunity to improve the UBET business;
• the extent of capital investment required to drive growth in the UBET network;
• a plan to expand the UBET product range;
• scope for improvement in Tatts’ lotteries & Keno divisions;
• the anticipated phasing/timing of realised benefits;
• detailed financial data; and
• the rationale for the transaction.
 The Tribunal is of the view that these papers to the Tabcorp Board were very comprehensive. It is always possible to ask whether more could have been done, or done in a different way. But the conduct of Tabcorp senior management and the Board in assessing the merger opportunity appears to the Tribunal, with respect, to be reasonable given the nature of the transaction, the experience of the senior managers involved, and the review by the Board.
Benefits claimed by Tabcorp
 Tabcorp claimed that the proposed merger was likely to deliver substantial enduring public benefits including costs savings [XXXX XXXX XXXXX XXX XXX X XXX XXXXX XXXXX] and revenue increases [XXXX XXXX XXXXX XXX XXX X XXX XXXXX XXXX]. A proportion of the sum of these costs savings and revenue increases would flow through to the Australian racing industry [XXXX XXXX XXXXX XXX XXX X XXX XXXX] and to governments in the form of taxation [XXXX XXXX XXXXX XXX XXX X XXX XXXXX XXXXXX XXXXX XXXX XXXX XXXXX XXX XXX X XXXXX]. Tabcorp also claimed that the merger would lessen the ‘free-rider’ problem presented by corporate bookmakers who sell wagering products based on racing and sports industries to which, it was alleged, they do not provide financial support. The merger, it was claimed, would remove a commercial barrier to national pooling, with consequential improvements to pari-mutuel wagering products and greater returns to the racing industry. Finally, all of the productive efficiencies arising from the merger would have a beneficial impact on the broader economy.
 It was estimated by Tabcorp that completion of the transaction may occur over the course of a full year, and the integration of the Merger Parties into one Merged Entity was likely to require another two years following completion. As such, the cost savings benefits were considered by Tabcorp likely to be realised in full by the end of the third year following completion.
Itemised cost savings
 The Chief Financial Officer of Tabcorp, Mr Johnston, provided a summary of expected annual costs savings (at the end of the third year following completion of the proposed merger) that were attributed to the marketing function, technology, corporate, procurement, and property and field services. [XXXX XXXX XXXXX
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 Savings in the wagering division were expected to be derived from reductions in expenses relating to marketing, bookmakers, call centres and radio services [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX]. These were further broken down into expenses relating to particular costs. For instance, savings from reduced marketing expenses consisted of [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX]. Savings from reduced bookmaker expenses were derived from [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XX]. Call centre expenses were expected to decrease due to [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXXXX]. Because both Tabcorp and Tatts operate radio stations, the reductions in radio services costs were expected to arise from [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXXXX].
 Technology savings were derived from efficiencies in race-day operations, data centre running costs, wagering systems capital expenditure, and [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX XX] Tabcorp and Tatts operate duplicative technological race-day functions including setting up race meetings, entering race information into the wagering system, opening races for bets, manually closing races for bets, and entering result details to facilitate customer payments. [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XX] Savings in running data centres would arise from [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXXX]. Wagering systems capital expenditure would be reduced [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XXXXX].
 Corporate costs savings constituted board and management expenses, ASX listing costs, duplicated corporate functions, and other corporate costs. Each of these categories were similarly broken down into cost line items. For instance, ASX listing costs savings included [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXX]
 Procurement cost savings were made up of improved terms from suppliers; efficiencies in communications arising from venue overlap [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X]. Savings in property expenses were itemised site-by-site, and field services savings were estimated [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX].
Tabcorp’s verification process: costs savings
 Mr Johnston described the verification process he undertook [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXXX]
 [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXX XXX XXX X XX XXXX] Tatts’ representatives agreed with the expected synergies, and the Tatts Board joined with Tabcorp to make the joint ASX announcement of 19 October 2016.
 Consistent with the calculation of cost savings, Tabcorp considered that revenue increases were likely to be realised in full by the end of the third year following completion, and the calculations provided were based on those values.
Itemised revenue increases
 Mr Johnston provided a summary of expected annual revenue increases attributed to improved Tatts fixed-odds performance, wagering business improvements, and Keno business improvements. [XXXX XXXX XXXX
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 Of this total figure, Tabcorp calculated that approximately [XXXX XXXX XXXXX XXX XXX XXX] of these revenue increases will likely be directly passed through, on an annual basis, to racing industries, retail venues, sporting bodies and governments in Australia in the form of fees, commissions, profit shares and taxes.
 Mr Johnston detailed the methodology by which Tabcorp had improved its own fixed-odds performance in recent years. Improving the overall performance of a fixed-odds book involves simultaneously growing fixed-odds turnover and maintaining or growing fixed-odds yield. In order to do this, bookmakers need to successfully manage fixed-odds risk, which is done by identifying and limiting exposure to risky bets by either adjusting the odds, limiting the size of bets that will be accepted, or by refusing to accept certain bets at all. [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXX]
 Over the past three financial years (FY2014 to FY2016), Tabcorp’s fixed-odds book has significantly outperformed Tatts’ fixed-odds book on measures of growth in turnover and yield (and therefore revenue). [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX] [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX X.]
 Tabcorp claimed that additional improvements to the wagering business would arise from the introduction of new products, and by broadening the availability of other products, in the Tatts States; from re-branding and improving the retail network in the Tatts States; [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X] Tabcorp would increase the availability of products such as ‘Quaddie Cash Out’ wagers in the Tatts States, permitting the customer to cash out the market value of their multi, fully or partially, at any time after the first leg. [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXXXX]
 Rebranding would replace the Tatts ‘UBET’ brand (introduced approximately three years ago) with the ‘TAB’ brand, in existence since the 1960s. Tabcorp would also increase capital investment in retail third-party venues. [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XX]
 [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX XXXXXX]
Tabcorp’s verification process: revenue benefits
 Mr Johnston described a different approach to calculating revenue benefits compared to that adopted for the cost savings. [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXXX] Mr Johnston’s team separately undertook further analysis of revenue increases, and contemporaneous modelling was brought before the Tribunal demonstrating the analysis underpinning the commercial assessment by both the Tabcorp and Tatts Boards of the proposed merger. This modelling included all assumptions and data on which the model was based. Mr Johnston held the view that the assumptions, methodology and the results of the modelling were reasonable. [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X X XXXX XXXX XXXXX XXX XXX XXX] The analysis formed the basis of ASX announcements and the joint ASX presentation in October 2016 by Tabcorp and Tatts.
Flow-through of benefits to the wider community
 In a regulated industry such as wagering, where licensed bookmakers return a proportion of turnover, revenue or profit to governments and PRAs, it seems a matter of common sense that increased turnover, revenue or profit would provide flow-through benefits to those governments and the racing industry. However, the true extent of these flow-through benefits needed to be carefully outlined rather than assumed.
Tabcorp’s claims of flow-through
 Tabcorp asserted that the strong co-dependency between the Merger Parties and racing industry (in the form of the industry funding model, and arising from commercial agreements between the Merger Parties and PRAs) implies that cost and revenue benefits from the proposed merger are guaranteed to be substantially shared with the industry. Approximately [XXXX XXXX XXXXX XX] of the benefits from cost savings and business improvements will flow to parties other than Tabcorp. Mr Johnston noted that these pass-through benefits would result from profit sharing arrangements with the Victorian and New South Wales racing industries, and in the form of increased tax payments to the Federal Government. The racing industries in Tatts jurisdictions would not experience the same benefits from profit pass-through because their funding models are based on revenue sharing, not profit sharing.
 Tabcorp then proceeded to claim that the proposed merger would reinvigorate retail wagering relative to online, and reinvigorate pari-mutuel wagering relative to fixed-odds. According to Tabcorp, both of these shifts provide a clear benefit for the racing industry relative to the adverse impact of online and fixed-odds wagering products. By this reasoning, the merged firm would therefore have greater financial capability to make higher bids for wagering licences in the future; conversely, absent the merger, the Merger Parties would provide less funding to the racing industry, and the shortfall may need to be met by public funding (as was the case in the Australian Capital Territory).
209 In respect of the present applications, Tabcorp emphasised the merger would permit the merged entity to reach a sufficient scale to compete with larger multinational competitors, which would in turn lead to greater competition and bring about competition benefits.
210 In addition to evidence adduced in respect of the first application to support the contention that scale is needed to compete effectively in the national wagering market, such as that of Mr Barry, Tabcorp relied upon a number of further pieces of evidence. Tabcorp pointed to Paddy power Betfair’s Interim Results of 8 August 2017:
Power Betfair’s competitive advantage lies in its substantial global and local online scale; its leading capabilities in the areas of scalable proprietary technology, digital marketing, in-house product development and proprietary risk & trading operations; its portfolio of distinctive sports-led brands; and its differentiated products.
Our industry remains highly competitive and exposed to external factors including the economic and regulatory environments. However, we believe that the investments we are making, as well as our scale, market positions and leading capabilities, position us well for sustainable profitable growth.
Betfair is an innovative online betting and gaming operator which pioneered the betting exchange in 2000, changing the landscape of the sports betting industry. The main drivers for the merger include increased scale driving growth and creating greater returns on product and marketing investment; highly complementary products and geographies; distinct brands with strong online capabilities; and a stronger combined group with market-leading talent, technology and operations
211 Tabcorp also pointed to the transcript of Paddy Power Betfair’s 2017 Interim Results Investor Presentation, in which the Chief Financial Officer and Executive Director, Alexander Gersh, stated:
…there continues to be quite a bit of regulatory news flow within our key markets, we believe that operators with scale are well-positioned to withstand any additional regulatory or tax burden
212 Likewise, Tabcorp pointed to the following comments in the same transcript of Breon Corcoran, Chief Executive Officer and Executive Director of Paddy Power Betfair:
The foundations - critically, we talk about scale. The businesses, both businesses, Betfair and Paddy Power, had established over many years history of investment, relatively strong positions, but we think this was further strengthened by the merger.
The substantial scale is both global, our online scale and local online scale. We’re the number one operator in a number of key regulated markets. We believe and we believe there’s evidence of leading capabilities, including scalable proprietary tech platforms, in-house product development, our digital marketing expertise, which I’ll come to in a second, a leading proprietary risk and trading capabilities…
…And we believe that scale and efficiency, along with the focused investment strategy will allow us to grow profit sustainably in our key markets in the long-term.
The cost advantage of scale is funding ongoing investment that we’re making. But it’s also driving an increase in the share of the profit pool that we’re enjoying in key markets in the UK and Australia. Other small operators may be driving stake growth faster than we are from a long base, but not many of them are growing profits.
So, on the face of upcoming regulatory and fiscal changes, we believe it will be ever more important to be a scale operator. Australia, I think, is the starkest example of that. Many of our competitors will struggle from profitability as Sportsbet can thrive as a result. Even overnight, there’s more regulatory news in Australia that credit betting is now possibly within six months of being banned. And many of you will know that that’s 30% of the revenues of one of our competitors down there.
So, regulatory and compliance cost will go up. Being large is definitely a better place to be, even if it’s easier to grow top line from a smaller base. So, with that, we think Australia shows what this might look like. We are confident of our strategic positioning.
213 Tabcorp also pointed to a powerpoint presentation by SportsBet’s Australian management entitled “SportsBet’s Briefing”, dated 30 August 2017, which included remarks of the scale advantage and the role of SportsBet’s scale in its business strategy, such as “Use local scale to [d]ominate mass reach channels [and] [l]ead in digital marketing”, “Leverage group scale to [m]aximise efficiency [and] [l]earn and implement fast”, “Foundations of long-term success: … Substantial scale”, and “Sportsbet… continues to leverage its scale to invest in its leading customer proposition: Value, Product, Distinctive Brand”.
214 Further, Tabcorp relied on a reference to “[s]cale provides pricing and promotion options” in a recent presentation of Ladbrokes Coral Group, as well as Ladbrokes’ summary of its business in its 2017 Interim Results as:
Ladbrokes Coral is a business with significant scale, strong brands in regulated markets and a culture being built on the best of both Ladbrokes and Coral. We are well placed to exploit the opportunities ahead by focusing on five key themes: Technology, Product, Marketing, Multi-Channel and International expansion.
215 Tabcorp also used the following extracts of the transcript of Ladbrokes’ 2017 Interim Results Investor Presentation to support its argument:
a benefit of what scale can allow us to do and how the dual brand approach can help us manage risk and still do what bookmakers do best, which is appeal to customers and run a sensible balanced book.
Now, we know that there remains what to do, and integration will continue. The market will remain competitive and, as ever, we face regulatory challenges. However, this is business as normal for Ladbrokes Coral. What we now have is the scale and the opportunities to meet these challenges.
216 The ACCC and CrownBet rejected the proposition that the merger was necessary to enable Tabcorp and Tatts to reach a sufficient scale to compete. CrownBet submitted that, rather than decline, these entities have been growing as evidenced by increasing online turnover and continuing high profitability. The ACCC submitted that that, despite its decline in market share, there was no evidence that Tabcorp would become a failing firm without the merger. Rather, given its present market share, Tabcorp could sustain a significant loss of market share while still remaining an effective competitor to corporate bookmakers. The ACCC and CrownBet both questioned whether a merger would necessarily lead to increased competition, and considered that declines in market share were a natural consequence of increased competition after having had virtual monopolies in their respective geographic regions. Although the merged entity might be stronger and therefore more competitive than Tabcorp and Tatts as individual competitors, this does not necessarily imply greater competition more generally, particularly given the loss of the competitive constraint that they currently imposes on one another.
217 CrownBet also submitted that even if Tabcorp or Tatts were a firm in decline, it would not follow that the merger would increase competition. Rather, declining firms need to compete for sales and therefore still contribute to the level of competition in a market. CrownBet pointed to other jurisdictions where, contrary to the present case, such mergers are only allowed because the “failing firm” is so close to exit that its removal would not lessen competition sufficiently to warrant regulatory intervention.
218 The ACCC and CrownBet also submitted that scale should be viewed in the context of the Australian market. Viewed in that context, they rejected the proposition that Tabcorp and Tatts are sub-scale, noting their present market shares. CrownBet pointed to further evidence from an internal Tabcorp document that [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXX]. The ACCC emphasised that access to capital from a foreign parent should not be regarded as available simply because it would be to the advantage of the local subsidiary, but rather, such capital is a scarce resource that will only be applied to the Australian wagering market where the expected return is better than all available international alternatives.
219 We accept that scale should be viewed in the context of the Australian market. However, we do not accept that market participants’ relative positions should be evaluated in isolation from their belonging to a broader international business where relevant. Rather, as we stated at paragraph 229 of Application by Tabcorp Holdings Limited  ACompT 1, “the combination of global scale, a lower cost base, and heavy investment in marketing and promotion has delivered very significant growth in turnover for corporate bookmakers over the last decade”. Clearly, the access to the resources of foreign parent companies of some market participants informs our understanding of the trends and dynamics in the market, and how the proposed acquisition might interact with those trends and dynamics.
220 We do not accept, as a general rule, that a firm must be at the point of failure before a merger would not lessen competition or cause detriment. Each case must be examined on its merits. It is possible that the removal of a firm might not impact the conditions of competition, despite that firm not “failing”. Further, the concept of a failing firm justification for allowing the proposed merger to proceed was never raised by either Merger Party. The above discussion is rebutting a point that was never made.
221 Finally, we note that the ACCC also submitted that, if scale is important to competitiveness, then the suggestion that a merger of the [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXX XXX XXX] scale service providers will have no impact on competition in the market because all products are substitutable is illogical and should not be accepted. We recall in that regard our assessment above of the trends in the wagering market and the sources of competitive tension. While competition between Tabcorp and Tatts, now and in the likely future without the merger, is important to the assessment of the impact of the merger, it needs to be viewed in the context of the whole market and other competitors. Any loss of competition between the Merger Parties may not be material if there are strong competitive processes driven by other rivals.
222 The ACCC raised specific doubts as to the existence and quantification of costs savings as described, with the corollary that if these costs savings were not as described, the public benefit did not exist. The Tribunal previously summarised and addressed the ACCC’s doubts as follows:
The ACCC’s position
 The ACCC accepted that some cost savings are likely to be achieved by removing duplication in the operations of the Merger Parties as a result of the merger, but it was wary of overstatement. In particular, the ACCC noted that these costs savings will overstate the public benefits if they include economic transfers that should not be counted as public benefits; if they do not take into account integration costs, capital expenditure, or other costs; if they are not likely to be fully realised; if they are likely to exist in a future without the merger; or if they are not robust or verifiable.
 The ACCC and Tabcorp agreed with the evidence of Tabcorp’s expert, Mr Smith, that some [XXXX XXXX XXXXX XXX XXX X XX] claimed costs savings were in fact a transfer from suppliers in the form of better trading terms, and therefore not an economic benefit. Tabcorp maintained that the remaining sum [XXXX XXXX XXXXX XXX XXX X XXX X] consists of productive efficiencies that constitute public benefits.
Integration costs, capital expenditure and other costs
 The ACCC noted that “integration costs [and] costs necessarily incurred in order to achieve the asserted cost savings should be ‘netted off’ … However, they do not appear to have been taken into account”. The point that these costs necessarily arise in a future with the merger, and not under the counterfactual, is certainly relevant. If the scale of integration costs exceeds the scale of costs savings over the long-term, this could have the effect of neutralising any claim of benefits arising from productive efficiencies.
 It may be accepted that Mr Johnston’s preference for measuring costs savings three years after completion implicitly acknowledges that the adoption of a longer-term perspective draws attention away from the very significant costs that arise when two large businesses are combined into one. However, it cannot be said that Tabcorp did not take these costs into account. The estimates provided by the ACCC in its closing submissions are drawn from Mr Johnston’s evidence [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX], with substantial detail in the composition of these numbers. The Tribunal has previously considered that benefits must have durability in order to be taken into account: see Qantas at ; see also Sea Swift at . Consistent with this approach, integration costs that are short-term should be given less weight than durable costs savings that adhere to the merged business in the long-term.
 The Tribunal notes that the experience of the Tabcorp Board and senior management in previous acquisitions, such as that of TAB Limited in Victoria in 2004, ACTTAB in 2014, and Intecq in 2016, leads to two conclusions. First, Tabcorp is familiar with integration risk. Secondly, the integration risks associated with the Tatts offer would have been acknowledged by Tabcorp. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX]
 [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX]
 [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX X]
 The ACCC’s submissions on this point seem to be premised on the idea that prior merger experience is not only relevant, but crucial to determine whether future integration risks will eventuate. The Tribunal takes the view that it is preferable for integration risk to be treated separately to the estimates of quantum, rather than building risk into the estimate by adopting conservative forecasts; but we also consider that in circumstances where Tabcorp’s senior management team have learned from directly relevant experiences, any missed opportunities in the past do not lead to the conclusion that they will be missed in the future.
Merger specificity: the future with and without
 The ACCC rightly noted that merger specificity is key to the assessment of public benefits arising from the merger. Where a proposed transaction may lead to anti-competitive detriments, it is critical that the Tribunal only considers benefits arising in a future with the merger; if they would arise without the merger in the same form, to the same scale, and with the same speed, they are not relevant to the Tribunal’s task.
 It was argued that several line items in Tabcorp’s costs savings are not merger specific. [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX] [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XX]
 It is left to the decision-maker to choose which of several counterfactuals is most likely: Metcash at . Based on its assessment, the Tribunal may then consider whether each claimed benefit or detriment is merger specific. It is unhelpful to propose an array of counterfactuals, each with some chance of occurring, without undertaking an analysis of which is the most likely counterfactual against which the ‘future with’ is measured. In the presence of Tabcorp’s formal bid for Tatts, and the absence of a formal bid from a corporate bookmaker, the Tribunal considers that the most likely counterfactual is one where Tatts remains a stand-alone entity.
 In the context of Tabcorp’s ability to achieve these claimed costs savings, a stand-alone Tatts is not likely to achieve costs savings to the same degree. Under the counterfactual, Tatts will no doubt continue to strive for efficiencies, but there is no reason to conclude that it has not already been doing so. The fact is that these claimed costs savings are largely derived from scale efficiencies that a Merged Entity could credibly achieve to a greater degree than Tatts alone could do.
The veracity of estimates
 The ACCC emphasised that the estimates of costs savings were based on dated information and estimates had been delegated to unnamed analysts, when information could have instead been up-to-date and properly verified. In particular, attention was drawn to the absence of “contemporaneous business records or any detailed analysis demonstrating the basis upon which those costs savings had been calculated”. In response, Tabcorp described Mr Johnston’s estimates as “robust”, and that the ACCC’s criticisms were overstated.
 These costs savings were calculated during meetings between officers of Tabcorp and Tatts in September and October 2015. [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXX] This discussion occurred in the context of a “nil premium merger of equals”, not in the context of the current acquisition proposal; but both proposals entail the merger of Tabcorp and Tatts operations. It is difficult to see why efficiencies arising under the original proposal would be fundamentally different to efficiencies arising under the proposal to which the application relates. The Tribunal is satisfied that these calculations remain relevant to the application for authorisation.
 It was suggested that Tabcorp’s calculations of costs savings lacked verification by Tatts officers and by independent third-party auditors, and that in those circumstances they could not be relied upon by the Tribunal. Sections 95AT(1) and 95AZH apply equally to all merger applications, including hostile takeovers. The Tribunal does not accept that these sections are to be construed in such a way that officers of a takeover target, in hostile circumstances, must verify the calculation of cost savings and revenue increases of the acquirer in order for the Tribunal to accept those calculations. Even in the presence of what may be described as a ‘friendly’ takeover, Tatts remains an independent company until completion of the acquisition. The transaction must meet several hurdles to be completed: aside from Tribunal authorisation, it requires Court approval in accordance with s 411(4)(b) of the Corporations Act 2001 (Cth), various State and Territory regulatory approvals, and approval by Tatts shareholders. Officers of both Merger Parties will be mindful that if any of these requirements are not met, and the transaction cannot be completed, Tatts will remain in competition with Tabcorp. As a result, it is necessary that both parties retain confidentiality in some of their most sensitive cost and revenue data. The Tribunal is not prepared to treat a lack of verification by officers of the takeover target as determinative of the application. In any event, the involvement of Tatts officers in the calculations made by Tabcorp, at an early point in the process, lends credibility to the estimates.
 A contemporaneous review of the projected costs savings by independent third-party auditors will lend weight to the benefits claimed by an applicant for merger authorisation. This appears to have occurred with sufficient rigour [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX X]. The Tribunal accepts that this evidence leads to the conclusion that the calculations were verified by an independent third-party with sufficient rigour to lead to external announcements to investors. On that basis, the Tribunal does not need to independently verify the calculation methodology used by Tabcorp to the level of rigour suggested by the ACCC.
 While there may have been some dispute as to the appropriate timeframe for measuring costs savings, the Tribunal’s conclusion is that there are substantial costs savings which in the circumstances we consider to be sufficiently verifiable.
223 In respect of the present applications, the ACCC pointed to certain additional evidence in questioning the reliability of cost savings estimates. In particular, the ACCC pointed to conclusion noted in the Tatts Group Limited Scheme Booklet (dated 8 September 2017) (the ‘Scheme Book’) that:
…if the Scheme is Implemented, the performance of the Combined Group in any period will reflect a number of factors that cannot be predicted with the level of confidence required for the inclusion of forecast information in this Scheme Booklet.
224 The ACCC also relied on certain additional evidence for its submission that a complete assessment of the likely benefits requires consideration of any significant integration risks and associated costs. In particular, the ACCC relied on the following:
These risks, known to the Tabcorp Board, were disclosed to investors in September 2017 in the Tatts Scheme Booklet, which states that the ‘risk exists that any integration or strategy implementation may take longer than expected or that the extraction of potential synergies and business improvements does not occur or may incur additional costs, which would impact the Combined Group’s financial performance.’
Since June 2017, some of these risks have already been realised. For instance, the [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX]
The Tatts Scheme Booklet indicates that the net one-off integration costs and capital expenditure costs are estimated to be $141 million pre-tax (excluding transaction costs). The Booklet also states that the $141 million cost will create an additional interest expense of $6 million per annum, which does not appear to have been accounted for in Tabcorp’s cost savings estimates before the Tribunal. In addition, there are also net one-off transaction costs now estimated to be $133 million pre-tax. It is not clear to the ACCC whether this will result in a similar additional interest expense and whether this has been accounted for in Tabcorp’s cost savings estimates.
Overall, it is clear that there are substantial integration risks and implementation costs associated with the proposed acquisition. There is no indication that these substantial risks and costs have been reflected in Tabcorp’s synergy calculation of $130 million per annum of total EBITDA.
225 CrownBet submitted that none of the claimed cost savings qualify as “benefits to the public” under s 95AZH(1) of the Act, as they flow to a limited class or group of people. For instance, CrownBet submitted that [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXX]
226 CrownBet also submitted that, even if the Tribunal were to consider the claimed cost savings as public benefits, Tabcorp’s estimates of their quantum should be discounted substantially. CrownBet submitted that these estimates are unreliable as they are now [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX] and they involve mere transfers and unfounded assumptions. Further, CrownBet pointed to the estimated costs in the Scheme Book of $141 million, as well as a further $200 million in other costs such as stamp duty, advisory and implementation costs.
227 The ACCC and CrownBet also cited an internal Tabcorp document [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX X] It was submitted that this material casts doubt over the extent of revenue gains claimed by Tabcorp, and should be accordingly discounted, potentially resulting in there being little or no net synergies. Mr Schiavello, one of the authors of this document, gave evidence that [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX]
228 Tabcorp rejected the contentions that the Scheme Book conveys significant uncertainty over the claimed synergies and that the quantification of synergies excludes integration costs. Further, Tabcorp argued that the additional transaction costs referred to in the Scheme Book are unsurprising and do not diminish the public benefits given their one-off, short term nature. By contrast, the cost savings are enduring.
229 The Tribunal has considered the evidence submitted regarding cost savings and synergies. We note in particular the additional information concerning integration risks, “dis-synergies”, and costs associated with the proposed acquisition. We have considered the issue again, but in our view there are substantial costs savings arising from the proposed acquisition which we consider in the circumstances to be sufficiently verifiable. Though potentially significant if they are incurred to the extent claimed by CrownBet and the ACCC, the alleged “dis-synergies” and one-off transactions costs are not of a sufficient magnitude or type so as to neutralise the substantial ongoing cost savings arising from the proposed acquisition. We reiterate our earlier views, and reject the submissions of the ACCC and CrownBet.
230 The ACCC raised doubts as to the existence and quantification of revenue benefits arising from the merger, which the Tribunal previously summarised and addressed in respect of the first application (which it reiterates):
The ACCC’s position
 The ACCC responded that the revenue benefits arising from improvements in Tatts’ wagering business are not merger specific; improvements to Tatts’ fixed-odds yield are not a public benefit; transfers of market share from corporate bookmakers to the Merged Entity are not a public benefit; and the estimated revenue increases formed by Mr Johnston and Tabcorp were uncertain and unverifiable. No issue was taken with the forecast benefits from Keno business improvements.
Merger specificity: the future with and without
 Absent the proposed acquisition, the ACCC asserted that Tatts has an equal ability to make necessary improvements to its fixed-odds and wagering businesses, whether on its own or together with, for example, a corporate bookmaker. The Tribunal prefers the existence of a stand-alone Tatts as the most likely counterfactual to the merger, and therefore does not receive assistance from arguments that Tatts could merge with (or engage in cartel conduct with) a corporate bookmaker to access superior risk management tools.
 Tabcorp acknowledged that Tatts had taken steps to improve its fixed-odds yield, but it submitted that this was achieved by sacrificing growth in turnover. Data provided to the Tribunal on this point was not conclusive [XXXX XXXX XXXXX XXX XXX X XXX X XX XXXX XXXXX] [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXX]. The Chief Executive Officer of Tatts, Mr Cooke, gave evidence that Tatts had begun work on improving its risk management system for fixed odds in October 2016, and that additional enhancements were planned. Mr Cooke also gave evidence that Tatts would continue to roll out capital investment to improve retail venues, as its refurbished stores were outperforming non-refurbished stores by approximately 6.5%. Mr Cooke was firm in his view that, absent the merger, Tatts would remain committed to driving the business forward.
 The Tribunal agrees that a stand-alone Tatts would be expected to improve its fixed-odds performance, introduce higher yielding products, and continue to invest in retail store improvements if such improvements were deemed profitable. A review of their annual reports for FY2016 shows that Tatts has a larger market capitalisation than Tabcorp, and exceeded Tabcorp on financial measures such as total revenue ($2,928 million to $2,189 million), EBIT ($420 million to $301 million) and net profit after tax ($234 million to $170 million). However, Tatts derives the majority of its revenue ($2,140 million) and EBIT ($320 million) from its lotteries operations. Compared to Tabcorp, its wagering division produces far smaller revenue ($610 million to $1,873 million) and EBIT ($116 million to $252 million). No doubt Tatts’ lotteries division is likely to require investment and attention in the near future. The Tribunal received no evidence that in a future without the merger Tatts planned to divert resources from the lotteries division to the wagering division. It is reasonable for the Tribunal to conclude that Tatts has no plans to do so. Therefore in its wagering division, where Tatts earns less than half the EBIT of Tabcorp, Tatts is likely to invest less in absolute terms than Tabcorp in systems, retail improvements and new product introduction.
 Tabcorp has already established an advantage in its risk management systems, with evidence of large capital investment [XXXX XXXX XXXXX XXX XXX] and a longer period of systems development. Tabcorp has also established an advantage relative to Tatts in the introduction of new products, and the Tribunal takes the view that any existing intellectual property advantages and first-mover advantage in products such as Trackside will extend into the near future. The Tribunal does not conclude that Tatts can never catch up with Tabcorp in these areas, but this is very unlikely in the next few years. Therefore, to a significant extent, these revenue increases are merger-specific.
Are improvements to Tatts’ fixed-odds yield a public benefit?
 [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX] The ACCC claimed that the differences suggest “that Tabcorp may not be sufficiently constrained in its supply of fixed odds wagering products”, with the consequence that the merger “will further reduce the competitive constraint that Tabcorp faces in the supply of fixed odds wagering products”.
 The ACCC’s conclusions ignore its own prior observation on the nature of the wagering market:
that while a single broad market for the supply of wagering products to consumers may be appropriate, such a market is highly complex and involves the provision of differentiated products with varying degrees of substitutability with each other. This is supported by the Joint Expert Report – Wagering Competition which records that none of the experts disagree with a national market for the supply of wagering services to punters (‘the wagering services market’) that involves a range of differentiated:
a) forms of wagering product;
b) channels by which wagers are made available to punters; and
c) geographies in which retail bets are offered.
 Once it is accepted that the Merger Parties and corporate bookmakers supply a range of differentiated products, it no longer immediately follows that higher average yields necessarily lead to any inference about the competitive constraints exercised on Tabcorp. Even at the narrow level of product specification (online and telephone fixed-odds wagering) referred to by the ACCC, products are differentiated by marketing to different customer segments. Mr Tyshing, Chief Operating Officer of CrownBet, agreed that it was critical for an online wagering operator to release a constant stream of exciting, new, and differentiated products. Realised yields reflect both this and the effectiveness of operators’ risk management systems and their relative abilities to build their books (recalling that realised yields also reflect operators’ success at betting against their customers).
 As noted by Mr Smith in his expert reply report:
the mechanics of how wagering markets work mean that it can be highly misleading to consider movements in long term average payout rates in the same way that one might consider posted prices in a consumer goods context.
 It is also important to recall the general caution against interpreting fixed-odds yields as price. Tabcorp could face strong competitive constraints on the odds it can offer (and therefore its target yield) and still realise higher and growing yields as a result of superior risk management and book building performance.
Impact of improved fixed-odds management
 Despite acknowledging the widespread use of risk management systems, the ACCC claimed that the increases in revenue or yield associated with improvements in risk management across the Merged Entity “may be considered as an increase in the price paid by punters, without any consumer benefit”. It noted the uncertain position in Dr Simes’ second statement on the consequences of improvements in risk management including the concession that it may mean some punters do not get to place bets that would otherwise have been accepted, but ignored his clear conclusion in testimony that the net impact of improved fixed-odds risk management was an efficiency improvement.
 A bookmaker that consistently misjudges the probabilities of outcomes in events, at least compared with the assessments of their customers, will earn less than the target yield used to build their book. Similarly, a key driver of fixed-odds yield is a bookmaker’s ability to manage the risk of expected losses when building the book on events. Bookmakers have to monitor the odds offered to punters constantly to ensure that their book remains balanced as bets are placed. They manage the impact of large bets on particular outcomes on their expected yield by, for instance, limiting the amounts wagered, accepting the bet at other than currently advertised odds, or refusing the bet outright.
 For corporate bookmakers with large turnover on individual events, risk management is unlikely to affect the relatively small bets placed by the bulk of their customers, limiting only the larger bets from a smaller group of ‘sophisticated’ punters. Bookmakers that did not actively manage the risk inherent in their fixed-odds book would soon be driven out of a competitive market for fixed-odds wagering by more efficient rivals.
 Part of the success of the corporate bookmakers in Australia stems from their investments in fixed-odds risk management systems. The ubiquity and importance of those systems was not disputed.
 Although bookmakers’ risk management means some punters lose the opportunity to place bets at what they perceive to be favourable odds, the lost consumer surplus on those wagers does not constitute a public detriment if the wager would have required the bookmaker to accept the bet at a price – that is, at odds – below the marginal cost of the transaction.
 The revenue gains claimed to arise from the merger need to be viewed in this context. Improvements in risk management should be considered as contributing costs savings because they lower a bookmaker’s marginal cost of accepting additional wagers.
 Provided they can be ascribed solely to the effects of the merger, consequent increases in fixed-odds revenues on existing turnover can therefore be treated as a measure of the public benefits associated with improved efficiency. If the improvements also result in increased turnover, not all of the associated revenue will be a net benefit, since part will be balanced by the additional costs of servicing those wagers. Some of those costs will, in turn and to the extent that the Merged Entity has captured market share, be balanced by the reduction in costs incurred by other bookmakers. Refining the estimate of net benefit would then require knowledge of the extent to which the increase in turnover was due to taking turnover from rivals or from increasing total turnover, and the relative marginal costs of the bookmaker and its rivals. A similar, converse, problem arises if turnover decreases.
 Tabcorp has claimed planned improvements in fixed-odds management will increase revenue [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XX] Consequently, although the claimed revenue increase cannot be accepted as a direct measure of the public benefits from planned improvements in fixed-odds management, the Tribunal accepts that the merger will produce productivity improvements contributing to public benefits of a similar magnitude.
Are transfers of market share to the Merged Entity a public benefit?
 The ACCC highlighted that the assumptions, by Dr Simes and Dr Pleatsikas, that some of the revenue benefits and unquantified improvements in product range and quality will produce public benefits, are associated with transfers of market share from corporate bookmakers to the Merger Parties.
 The Tribunal agrees with the comment by the ACCC in closing submissions that:
An increase in revenue that is comprised of the merged entity taking market share from a competitor due to improved products does not entirely constitute a public benefit. While material improvements in product quality and range may lead to an increase in the welfare of those who consume the products, resulting in consumer surplus, not all of the revenue represents the value of the quality improvement.
 Nevertheless, the improvement in product offering or quality still constitutes a net benefit. As with other changes in revenues, the amounts claimed are useful only as qualitative indicators of their relevant order of magnitude and relative importance compared with other potential sources of benefit, rather than as precise dollar estimates.
Are increases in gross revenue an appropriate measure of public benefit?
 The ACCC has questioned whether the claimed revenue increases are correctly characterised as public benefits because they “include transfers from corporate bookmakers, with no increase in producer or consumer surplus”, and because an increase in gross revenue “is not the appropriate measure of public benefits”.
 The Tribunal agrees with the ACCC on these points as a matter of general principle. Nevertheless, it does not follow that the anticipated increases in revenues do not indicate potential or likely sources of net public benefit. As noted above, revenue increases derived from winning market share from competitors generally comprise a mixture of cost substitution and some element of increased total surplus. Similarly, increases in revenue from a given level of turnover could comprise no more than a transfer of surplus from consumers to producers; could be cost savings associated with an improvement in efficiency; could be increased consumer surplus associated with a perceived improvement in product quality; or some combination of all of these.
 Although the dollar values of expected revenue gains therefore cannot be taken to be measures of public benefit at face value, it is nevertheless important to assess the likely impact on public benefits of the underlying sources of those gains.
The veracity of estimates
 The ACCC emphasised that the estimates of revenue benefits were based on calculations that were later qualified in cross-examination. [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXX]
 In his first statement, Mr Johnston asserted that the [XXXX XXXX XXXXX XXX XXX XXX] revenue increase from improvements to Tatts’ fixed-odds performance could result from different sources [XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX X XXX X XXXX XXXX XXXX XXXXX XXX XXX XX]. Mr Johnston appears to have modelled revenue increases on multiple factors. He then determined that one cannot be sure of the extent to which each will eventuate, and concluded that regardless of the outcome of each separate factor, the end result will be the same. This is certainly not best practice. He also identified a number of factors which cast doubt on the likelihood that the asserted revenue increases would be realised, and stated that “it is difficult to make precise predictions about timing at this stage”.
 Going beyond these limitations, the evidence presented to the Tribunal revealed the assumptions underpinning Tabcorp’s modelling of revenue increases. That modelling was accompanied by 112 explanatory notes on specific inputs within the model. Not only did Mr Johnston conclude that the outcomes of the modelling were reasonable, but so did the Boards of both Merger Parties, as suggested by the ASX announcements and the joint ASX presentation in October 2016 of Tabcorp and Tatts. The Tribunal does not agree with the ACCC as to the appropriate level of verification required to conclude that revenues will increase. As with costs savings, it is inappropriate to require verification from the takeover target. With respect to independent third-party review, conclusions must ultimately rest on modelling underpinned by assumptions. In the context of company acquisitions discretion will always be critical; the industry-specific assumptions underpinning the model must be provided by the acquirer. When it came to announcing the offer to the market, Tabcorp’s assumptions were sufficiently reasonable in the minds of members of the Tatts Board to permit contemporaneous market disclosure of the revenue increases they served to forecast. As a result, the Tribunal accepts that a significant proportion of the estimated revenue increases will be realised by Tabcorp if the merger proceeds.
231 In the respect of the present applications, the ACCC pointed to [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XX] as further evidence supporting its submission that neither the claimed revenue increase from wagering business improvements nor the revenue increase from improvements to Tatts’ fixed odds yield constitute benefits that are likely to result from the proposed acquisition. In that regard, the ACCC submitted:
In addition, [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX].
Specifically, regarding Tabcorp’s plans for upgrading Tatts’ retail venues, [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XX].
Regarding Tabcorp’s plans to introduce new wagering products into the Tatts States [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XX XXX X].
232 However, upon reading the whole of this independent report, the tone and emphasis is markedly different. [XX XXX XXXXX XXX XXX XXX XXXXX XXX XXXXX XX X XX XXX XXXXX XX]
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233 The assumptions and forecasts in this modelling were clearly identified in the report, and were not the subject of dispute. The report’s conclusions lent weight to the claims of cost savings and revenue benefits made by the Merger Parties.
234 The ACCC also questioned whether revenue increases could be taken to be public benefits:
[E]ven the evidence of Tabcorp’s expert, Dr Simes, accepts that the only public benefit in the increased revenue from wagering business improvements is the unquantified and speculative additional amount by which customers value the qualitative improvements in the improved wagering products. The rest of the revenue increase estimates are merely economic transfers.
235 In this regard, the Tribunal considers that its comments at - of its earlier Reasons respond to this argument.
236 The ACCC also submitted that there was additional evidence that Tatts was undertaking initiatives to improve its fixed-odds performance, introduce higher yielding products, and continue to invest in retail store improvements if such improvements were deemed profitable. According to the ACCC, this supported the argument that wagering business improvements are not merger specific. The Tribunal has addressed the likely competitive constraint applied by Tatts in a future without the merger, and concluded that no competitive detriment will arise in the provision of wagering services in this regard.
237 Further, the ACCC submitted that improvements to Tatts’ fixed odd yields should not be construed as a public benefit. The ACCC relied in that regard on the Further Houston Report, which stated:
I note that it has been contended that such increases were, in fact, a public benefit (not a detriment) since they arise from improved risk management. I disagree with the economic reasoning underpinning this proposition, because:
• improved risk management will increase the yield of the merged firm if it accepts fewer losing bets, but this will also lead to a loss of consumer surplus, because it can be presumed that the punters who win or expect to win these bets place significant value in being able to make those wager – overall welfare will fall so long as consumers valued making those bets more highly than the expected losses made by the wagering operator; and
• improvements in risk management do not reduce the marginal cost of any particular wager (which is determined by the probability of the outcome of the wager) but, rather, allow for a more accurate assessment of marginal cost (or perceived probability). The effect of improved risk management is to reduce the revenue that would otherwise have been lost by accepting bets at a price below their marginal cost – however, in almost all instances this will still give rise to a loss of consumer surplus as set out above.
238 CrownBet likewise submitted that increases to Tatts’ fixed odds yield are a detriment due to the resulting transfer from consumers to the Merged Entity, and that improvements to the Merged Entity’s wagering business are not merger-specific.
239 We take a different view to that of Mr Houston in the interpretation of fixed odds yield improvements as a public benefit. Our conclusions remain as expressed in Application by Tabcorp Holdings Limited  ACompT 1: at -.
240 CrownBet also submitted that improvements to Tatts’ South Australian Keno offering are not merger-specific. Specifically, CrownBet submitted:
The improvements to Tatts’ South Australian keno offering are also not merger specific, Tabcorp says that by investing [XXXX XXXX XXXXX XXX XXX XXX] initially, and incurring an additional [XXXX XXXX XXXXX XXX XXX] of annual ongoing costs, it will achieve additional revenues of [XXXX XXXX XXXXX XXX XXX X XXXX] from Tabcorp’s keno business. If these gains are in fact likely to be achieved, Tatts (or any other purchaser of Tatts) would likely seek to achieve them as well by making a similar investment. Tatts’ strategy for improving its lotteries business (which includes enhancing its retail network, marketing and branding) demonstrates that it has the capacity and experience to improve the keno offering in South Australia independently of Tabcorp, including upgrading retail “look and amenities” as Tabcorp claims it would do. Tatts has already implemented its own technology solution for Keno.
241 The Tribunal is of the view consistently with what it has said before that there will be some improvements through the merger to the Keno offering, even though these may be hard to quantify. In any event, the Keno offering is not a material matter that requires attention for the purposes of carrying out the weighing exercise that the Tribunal is required to undertake. The improvements to the Keno offering are in the scheme of the debate of little moment.
242 The ACCC and the Victorian Racing Interveners also tested the claims made by Tabcorp as to the flow-through of these benefits to the racing industry and the wider community in respect of the first application, which the Tribunal summarised as follows:
The ACCC’s position
 The ACCC pointed out that these benefits ought not be counted as both revenue to Tabcorp, and as benefits to the wider community. Additionally, the ACCC objected to Tabcorp’s estimates of quantum. Problems were also raised with statements by Tabcorp about its increased capability to provide more to the racing, sports and hospitality industries as a result of its reinvigoration from the merger.
 Tabcorp did not express flow-through benefits quite as succinctly as it might have, starting with its own top-line total costs savings and revenue increases, and then apportioning parts of that to flow-through, without noting its remaining residual benefits. Nevertheless, these residuals were clear enough to the Tribunal.
Quantum of flow-through
 Tabcorp’s starting point is that the proposed merger will reinvigorate retail wagering and pari-mutuel wagering. The Tribunal accepts that the merger will lead to some disruption in consumption patterns, but remains of the view that these trends are not likely to be entirely reversed from the merger alone.
 The next link in the chain, according to Tabcorp, is that by shifting the trends in retail and pari-mutuel wagering, the racing, sports and hospitality industries will receive greater flow-through benefits. This depends on assumptions: for instance, that pari-mutuel wagering supports the racing industry more than fixed-odds wagering. Undoubtedly, any reinvigoration of retail wagering will lift flow-through benefits (that is, commissions) earned by third-party venues. However, the broader picture varies from jurisdiction to jurisdiction, and is expressed at too high a level of generality to be of much assistance. In some jurisdictions, evidence to the Tribunal suggests that it is simply untrue. For instance, according to Dr Forbes, CEO of Racing Queensland, UBET has agreed to pay Racing Queensland a variable product fee of 39% of gross wagering revenue on both pari-mutuel and fixed odds. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XX] Therefore, with respect to the returns to industry in some jurisdictions, there is no relevant distinction between pari-mutuel and fixed-odds wagering.
Bidding for licences: an increased capability to pay more?
 The Tribunal’s concerns with respect to future bidding for licences have already been considered. The only additional point to make is that if, in the future, the Merged Entity has a capacity to pay more, this does not mean that it will pay more. As a corporation whose directors retain duties to the company and its shareholders, the Merged Entity will in some respects be constrained from paying more than the competitive process demands.
The Victorian Racing Interveners’ position: licence arbitrage
 It is opportune at this point to consider a submission by the Victorian Racing Interveners that flow-through benefits would be eroded by the Merged Entity’s newfound ability to establish new customer accounts in non-Victorian jurisdictions, where the customer’s wagering makes a smaller financial contribution to the racing industry. Essentially, the Victorian Racing Interveners argued that if flow-through to the racing industry constitutes a benefit, this practice of ‘licence arbitrage’ would negate that benefit.
 Tabcorp claimed that the chances of licence arbitrage taking place are decreased by the merger. The merger would not change its ability or incentive to engage in licence arbitrage, as it already has much lower racing industry funding obligations in the Australian Capital Territory than either Victoria or New South Wales. Mr Attenborough noted in his reply statement that such tactics would harm Tabcorp’s relationships with State racing industries, and that from a practical perspective Tabcorp’s retail outlets are not set up to support out of State accounts. [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX]
 The Tribunal is inclined to the view that licence arbitrage is not a significant concern, and probably does not negate flow-through benefits anyway. Having accepted that the single licensed operator in any given jurisdiction is in a co-dependent relationship with the industry and its representative PRAs, it seems clear to the Tribunal that any concerns about licence arbitrage can be addressed in contracts between the PRAs and Tabcorp pursuant to that licence. In short, the industry is capable of protecting itself through contract. In any event, the existence of licence arbitrage is not an indication of any anti-competitive detriment. It seems more akin to the transfer of benefits from the racing industry in one jurisdiction to that of another.
243 CrownBet likewise argued before us that the racing industries of certain jurisdictions can expect to receive no benefit from the merger, and further, that the claimed additional $50 million in revenue to the racing industry does not account for the anti-competitive detriments arising from the proposed transaction or likely regulatory changes.
244 We have considered the evidence submitted regarding the flow-through of benefits. We remain of the same view regarding flow-on benefits as we expressed in respect of the first application. Additionally, we consider in respect of CrownBet’s argument that the fact certain flow-through benefits may not accrue to the racing industries of particular jurisdictions does not negate their character of flow-through benefits. We have also not found there to be anti-competitive or other detriments arising from the proposed transaction or likely regulatory changes, and therefore such detriments would not need to be discounted from the quantum of additional revenue flowing to the racing industry.
245 The merger is claimed to generate public benefits by addressing the ‘free-rider’ problem claimed to arise because corporate bookmakers are able to profitably offer wagering products on racing events without contributing sufficiently towards the costs of staging those spectacles. The ACCC submitted that it agrees with the Tribunal’s conclusion in respect of the first application that there are no likely public benefits from the proposed acquisition addressing a free-rider problem.
246 In the first and second applications, Tabcorp argued that the operational, performance and strategic improvements associated with the merger would constitute public benefits, in part, because it would lead to additional funding paid to State racing industries, and this:
will help to address the ‘free rider’ problems arising from racing funding imbalances between the state TABs and Corporate Bookmakers …
247 It expanded on this idea, arguing:
This ‘free rider’ problem is present in Australia, to some degree, because the State TABs contribute a greater proportion of their wagering revenue to the racing industry than Corporate Bookmakers. Due to the imbalance in funding between the State TABs and Corporate Bookmakers, the substantial increase in market share of Corporate Bookmakers in the past 10 years – estimated to be 16.5% in FY06 and 37.9% in FY15 – poses a challenge to the continued funding and health of the Australian racing industry.
248 The Tribunal accepts the general proposition that there has been an imbalance between the contributions of State TABs and the corporate bookmakers to the racing industry, but does not agree that it is appropriate to characterise this as a ‘free-rider’ problem in the conventional sense.
249 The growth of corporate bookmakers has come, at least in part, at the expense of forms of wagering that were tied closely to funding of the racing industry. At least since Betfair, corporate bookmakers were able to attract market share from Tabcorp and Tatts because they had cost advantages by not carrying the burden of the pari-mutuel operators’ required contributions to the racing industry. Left unaddressed and taken to extremes, it is easy to envisage that corporate bookmakers could have grown to the point where funding from Tabcorp and Tatts to the racing industry declined significantly, threatening the viability of the industry. Nevertheless, and although corporate bookmakers still have significantly smaller tax and industry support obligations than Tabcorp and Tatts, they do now make contributions to the industry through race field fees. The bigger question is whether the racing industry will inevitably decline without other alternative sources of funding if the support associated with existing pari-mutuel and retail exclusivity arrangements is further undermined by the trend towards fixed-odds and online wagering.
250 The ACCC argued against any public benefits arising from reducing potential ‘free-riding’. In its closing submission in respect of the first application, the ACCC questioned the likelihood of additional funding to racing industries, arguing that the impact of the proposed merger on bidding for those future retail and pari-mutuel licences may also have the longer-term effect of decreasing funding to the racing industry. This would exacerbate any free-rider problem if one existed or arose in the future. The Tribunal has already accepted that the merger itself will probably not significantly impact on the revenue to be raised from future licence auctions, and therefore rejects the ACCC’s reasoning. In any event, the Tribunal has already questioned the degree of certainty any participant in the market can have as to the future bidding process.
251 The ACCC noted Mr Houston’s comments to the effect that a free rider problem can only exist if the racing industry is unable to exclude others from use of its resources without consideration, which is not the case with regard to both bookmakers and broadcasters. According to the ACCC, it follows that the asymmetry or perceived ‘imbalance’ in payments to the racing industry by Tabcorp, Tatts and corporate bookmakers appropriately reflect the different rights they have under their licences. The Tribunal is inclined to accept these arguments, in as much as it is clear that mechanisms exist that allow racing bodies to sell the relevant ‘output’ of their events (such as event and race programming, starter information and results) in a form that supports the corporate bookmakers’ wagering offers.
252 The ACCC also argued that, to the extent that a ‘free-rider’ problem did exist, it could be addressed by State governments through the conditions imposed on future pari-mutuel or retail licences. As previously concluded, it is only possible to speculate on the approaches that State governments will take to future pari-mutuel and retail wagering licences, including any associated support for the racing industry.
253 The Tribunal agrees with the ACCC and finds that the proposed merger would not assist in addressing the long-term financing issues facing the Australian racing industry in any significant way. This does not detract from the public benefit that will likely arise from the additional funding of the racing industries associated with the expected increase in the merged entities’ turnover and revenues. Without double-counting these increases as public benefits, it may be appropriate to weigh some part of the revenue increases more highly if they flow to industry than if they were retained by shareholders of the Merged Entity.
254 Tabcorp noted that the proposed merger would lead to all three Australian pari-mutuel pools (SuperTAB, NSWTAB and UBET) being operated by the Merged Entity, removing a commercial barrier to unifying the pools for greater liquidity. Increased liquidity would permit more product types to be offered, and as stated by Mr Thompson, Chief Executive Officer of Racing Victoria, "liquidity attracts liquidity".
255 CrownBet submitted that the Tribunal should reject the alleged public benefit arising from combining Tabcorp's and Tatts' pari-mutuel pools on the grounds that it is unclear whether the merger will lead to their pools combining or is even contingent on such pools combining, and whether such combining advances future competition.
256 The ACCC emphasised that Tabcorp did not clearly identify which of the many barriers it anticipates that the proposed acquisition will overcome in order to make a national pool a likely outcome of the proposed acquisition or how they will be overcome. For its part, Tabcorp did not press the point, and never attempted to model costs or revenue benefits arising from a single national pool. Mr Attenborough stated that:
[A]ssuming that we are merged, even if we wanted to pool them then, we would still have to get racing industry approvals in each state, regulator approvals in each state, there are tax exemptions we would have to get from the state bodies that - so there's no double taxation. So there's - there's quite a train there of different approvals. There's systems works to be done; quite a bit of education of the customer. So to pool one state with another is quite a big task, it requires quite a - it takes some time and then you have got to get your systems talking as well.
257 Mr Burt of RWWA noted similar obstacles to national pooling, including the resistance of NSWTAB to blending with SuperTAB for what he believed were commercial reasons, despite both being operated by Tabcorp for over a decade.
258 Because of lingering doubts regarding the ability of Tabcorp to further merge the Tabcorp and Tatts pools, the Tribunal has concluded that combined pooling arising as a result of the merger is too uncertain to constitute a public benefit.
259 We recall in respect of the first application that Tabcorp commissioned Dr Simes of Deloitte Access Economics (‘DAE’) to model the public benefits of the cost savings anticipated from the merger. This was done by reviewing the proposed cost savings to exclude some categories, such as improved terms from suppliers, that largely constituted transfers and isolating the components that represented improvements in productive efficiency. Those savings were then used as inputs to the DAE Regional General Equilibrium computable general equilibrium (‘CGE’) model to estimate the broader and long-term economy-wide benefits associated with the merger.
260 The ACCC questioned the utility of Dr Simes’ CGE model when assessing net public benefits. It raised four concerns: that GNI is not an appropriate measure of public benefit; that the CGE model was prepared on the basis of incorrect assumptions with respect to cost savings and revenue increases; that no detriments were included in the modelling; and that CGE modelling is generally problematic, opaque and unreliable. The ACCC submitted that it agrees with the Tribunal’s conclusion in respect of the first application that there are no likely public benefits from the proposed acquisition increasing the Gross National Income.
261 CGE models in general are widely used to assess the impact of policy proposals across an economy, or to assess changes in specific industries that might have broader effects due to their magnitude or the extent to which the industry is an important supplier to, or customer of, other sectors of the economy. The Tribunal accepts that the CGE model used by DAE is suited to undertake such analyses. It is not so much that the internal workings of the modelling per se were subject to serious criticism. Rather, doubts were raised about the appropriateness of the model to measure consumer welfare, and about the model’s inputs and assumptions insofar as they caused benefits to be overstated, while ignoring detriments associated with the merger.
262 CGE modelling nevertheless has a number of weaknesses that make it unsuitable for assessing the net public benefits of a merger with potential impacts on the structure of the wagering and wider gambling industry.
CGE models generally take the competitive structure of the economy as given and perpetuate this structure into a future in which other factors, such as the ratio of inputs to outputs or tax rates, are varied in one or more sectors and their consequences are estimated in a new equilibrium in which patterns of production and consumption have responded to the initial changes. That is, the models measure the impact of efficiency improvements without putting them in context of the consequent new industry structure.
Importantly, CGE models are unable to properly estimate the impact of changes within an industry sector without detailed structural information of the sort that only traditional partial equilibrium modelling can provide.
Consequently, the CGE modelling makes no allowance for the interactions between market segments within the gambling and wagering market (such as the shift in market share from pari-mutuel to fixed-odds wagering or the growth of corporate bookmakers due to marketing or at the expense of the retail operators).
263 As noted by the ACCC and acknowledged by Dr Simes, the CGE modelling measures increases in Gross National Income (‘GNI’) rather than direct measures of consumer welfare, such as changes in consumer surplus in simple partial equilibrium analysis or the equivalent or compensating variation measures used in more complex analyses. Although Dr Simes argued that GNI was a measure “closely associated with … welfare”, it is not related to the usual total surplus (combined consumer and producer surplus) measure of welfare that forms the basis for concepts of economic efficiency. As the ACCC argued:
Economic welfare is the difference between the value consumers place on the goods they consume and the costs (including opportunity costs) of producing those goods. In this context, something that increases the market value for goods and services produced in the economy may not lead to an increase in economic welfare. GNI does not take into account the opportunity costs of labour and capital, or the ‘non-market’ goods, services and associated costs and benefits which contribute to the increased GNI. Accordingly, it is inappropriate to equate increases in GNI with increases in economic welfare.
264 The Tribunal accepts the criticisms that use of a CGE model is neither appropriate nor useful as a means of addressing the issues raised in respect of the present applications. At best, the model only indicates that there may be wider economic consequences. As noted by Mr Houston, in the context of the multiplier effect estimated for the benefits claimed in the gambling sector:
the principal role of a CGE model is to show that a benefit arising in one sector may be magnified by the interaction of that sector with other sectors of the economy. This proposition involves no particular insight in relation to the gambling sector.
265 That is, the model simply illustrates the accepted consequences of an improvement in the productive efficiency of one sector of the economy, rather than any particular consequences arising from the specific circumstances and structural changes associated with the proposed merger. Given the Tribunal’s assessment that, although they exist, the composition and magnitude of the efficiency improvements claimed by the applicant are highly uncertain, there is little additional benefit from attempting to further quantify the broader economic gains. As Dr Simes himself summarised the point:
the take-away message concerning the productive efficiencies is the direct cost savings represent a lower bound of the estimated benefits. As a matter of convention on economic theory, they become larger through increases in incentives to work and to invest that occur throughout the economy.
266 The Tribunal therefore places no particular weight on the quantum of estimated further, economy-wide benefits claimed to arise from cost savings in the market for wagering productive efficiency, other than to note that such gains are likely to exist. Criticisms by CrownBet of the CGE model’s inputs, and of the use of unfounded assumptions, may well be valid, but because the Tribunal does not place any weight on the CGE model, claims of broader economic benefits based on the model do not even get to first base.
267 The ACCC submitted on the basis of Mr Mellsop’s evidence that an increase in the average yield across all wagering products as a result of the proposed acquisition would result in a deadweight loss that would more than outweigh its likely benefits. In that regard, the ACCC requested the Tribunal to reconsider its assessment of Mr Mellsop’s model in respect of the first application, namely its findings that:
 Although the Tribunal was presented with some partial equilibrium modelling of the potential impact of the merger, it was also unsuited to the required purpose. Mr Mellsop’s statement included estimates of the deadweight costs (the loss of total surplus) that would arise from small increases in the price of wagering, measured by the average yield across all types of wagers. This modelling was overly simplistic and highly aggregated. For instance, it did not consider the interaction between pari-mutuel and fixed-odds wagering segments. It also failed to distinguish between the price of fixed-odds wagering and the yields earned by bookmakers, and so assumed the increases in fixed-odds yields must be due to increased price rather than productivity improvements due to better risk management. The model also appeared to assume that the price rise was industry-wide, without explaining how that might arise if it originated with the Merger Parties.
 These criticisms of Mr Mellsop’s modelling mean that his estimates of the efficiency costs of any attempts by the Merger Parties to independently increase yields are likely to be substantially overstated. Nevertheless, the Tribunal was cognizant of his general point: that large increases in deadweight costs, at least relative to the nominal public benefits claimed by the applicant, could be produced by only small increases in yields. In discussing market definition and substitutability, we have already explained why we believe that corporate bookmakers provide an effective competitive constraint on unilateral increases in yield by the Merger Parties, in all forms of wagering. (We have also mentioned the regulatory barriers that prevent the Merged Entity from unilaterally increasing yields on pari-mutuel wagering in some States.) For Mr Mellsop’s model to reveal deadweight costs from increased yields, those increases would have to be solely the result of the merger. If not, then it would not be appropriate to offset any likely deadweight costs against the proposed benefits.
268 In particular, the ACCC referred to Mr Mellsop’s Further Statement dated 12 October 2017 to explain that the purpose of his analysis was only to quantify the impact of any increase in yield on average over the whole of the market participants that might result from a reduction in the competitive constrains on Tabcorp. Mr Mellsop’s Further Statement also contended that an orthodox analysis used by competition agencies around the world suggested that if the merged entity raises its prices post-merger, the overall result would be a market-wide increase in the average price. The ACCC suggests that Mr Mellsop’s approach and conclusions are corroborated by the Further Houston Report dated 9 October 2017. Thus, according to the ACCC, even a small lessening of competitive constraint in the wagering market will generate ‘a significant dead-weight loss’.
269 Tatts responded that neither Mr Houston nor Mr Mellsop has attempted to provide any estimate of the likely increase, if any, in the price of wagering services that would result from the proposed merger, even if the Tribunal’s finding that the merged entity could not do so is ignored. For Tatts, the ACCC and CrownBet pose the theoretical possibility, as distinct from a real chance, of a competitive detriment, but there is no robust and commercially realistic estimate of such an asserted price increase. We return to the following statement of legal principles that we articulated in respect of the first application:
 Claimed benefits and detriments must be of substance and have durability: see Qantas at ; see also Sea Swift at . They should be sufficiently capable of exposition, whether quantitatively or otherwise, rather than “ephemeral or illusory”: see Qantas at ; see also Sea Swift at . Any estimate as to their quantification should be robust and commercially realistic: see Qantas at ; see also Sea Swift at ; see also AGL at . The assumptions underlying claimed benefits or detriments must be spelled out in such a way that they can be tested and verified: see AGL at ; see also Sea Swift at -. (emphasis added)
270 Tatts submitted that the ACCC’s assertions of competitive detriment should be rejected on that basis.
271 The ACCC responded to this criticism of the modelling of its expert economist (Mr Mellsop) and that of CrownBet (Mr Houston):
Tatts wrongly dismisses the economic modelling which predicts that under the conditions prevailing in the national wagering market (including, crucially, a degree of product differentiation), the likely consequence of the merged firm offering worse odds is that rival firms will also offer worse odds. This is not inconsistent with the existence of competition in a market, but rather a predictable effect of an acquisition under the right conditions.
272 Tatts replied:
There’s really an attempt to sidestep the findings which were made at paragraph 522 criticising Mr Mellsop for failing to explain, in his analysis, why there would be an industry-wide price increase. Now, we submit that those criticisms – and also attempt to avoid the conclusion reached in 523, that there would be a constraint by corporate bookmakers on the merged entities in respect of all attempts to increase price, for that purpose repeating the doctrine which the tribunal didn’t accept, that yield equals price. Now, we can be relatively brief as to the new evidence of Messrs Houston and Mellsop. We have, in our submissions-in-chief, paragraph 35, identified, by reference to the ACCCs merger guidelines, the circumstances in which that economic theory might operate, and we point out that the guidelines themselves make clear that where there are competitors – vigorous competitors – in the market, such as corporate bookmakers, it shouldn’t be accepted that the doctrine applies.
The next point is that neither Messrs Houston or Mellsop identified any likely price increase resulting from the merger. We make that point of paragraph 33 of our submissions-in-chief. We also make the further point that there’s no reason to assume, in a market like we’re concerned with, with corporate bookmakers, as appears clearly from the confidential documents which Ladbrokes have provided, which my learned friend Mr Moore took the tribunal to, the market is extremely competitive and it is illogical – and the tribunal wouldn’t assume – that in such a market that, if a merged entity increased its price, that customers would shift from the merged entity to corporate bookmakers and the corporate bookmakers would then all increase their price, because they’re fighting with each other vigorously for whatever advantage they can get.
So we would also criticise – and I won’t go into the detail of it – Mr Houston’s analysis – he has done a calculation, at paragraph 25 of his most recent report, of the quantification of the detriment associated with a price rise in the tote and tote-derivative products. And we’ve identified the lack of – that’s on the basis of two assumptions which we say, at paragraph 39 of our reply, just don’t stand up.
273 Expert economists assist the decision-making process by modelling likely futures with and without the proposed merger. These models are based on past and current information at their disposal. Realistic assumptions are made, and those assumptions are described so that the Tribunal can decide whether to accept them as likely points of difference between the future with the proposed merger and the counterfactual. The Tribunal does not accept the assumption in the modelling of Mr Mellsop and Mr Houston that the Merged Entity will become a price leader in the provision of wagering services, so that a unilateral price increase by the Merged Entity will be followed by all suppliers, creating a competitive detriment in the form of a significant dead-weight loss. Nor does the Tribunal accept the ACCC’s description of the assumption in the modelling – that the ‘predictable effect of an acquisition under the right conditions’ – can be applied to the wagering services market, given that the Tribunal remains of the view that price is primarily a function of consumer preferences for a particular contingency and a bookmaker’s ability to balance the book. And the larger point is that the Tribunal does not accept that the Merged Entity will have the capacity to unilaterally increase its yield without risking a response from the vast majority of consumers who are capable of switching from one supplier to another.
274 The Tribunal addressed a series of other contentious issues for the sake of completeness in respect of the first application. It considered that these issues could be readily disposed of. In particular, the Tribunal made the following observations:
 CrownBet argued that to the extent that Tabcorp’s cost savings may be the product of a reduced employee headcount, the loss of employment represents a public detriment rather than a public benefit. The Tribunal takes the view that this is a reconfiguration of the purposes of the Act. CrownBet itself was at pains to emphasise that the Act was concerned with “the promotion of public benefit through the processes of competition”. A public benefit is “anything of value to the community generally, any contribution to the aims pursued by the society including as one of its principal elements (in the context of trade practices legislation) the achievement of the economic goals of efficiency and progress”: Re QCMA at 510. It is difficult to conclude that, under the Act, benefits from efficiency gains are negatived by detriment in the form of unemployment. It is impossible to draw that conclusion in the absence of evidence that employees made redundant as a result of the merger will remain unemployed in the future.
 The Tribunal heard some evidence about Tabcorp’s adoption of Longitude, a product which assists to increase liquidity of pari-mutuel pools. Longitude is a proprietary system that may be licensed by operators of pari-mutuel wagering. CrownBet noted that Tabcorp’s adoption of Longitude would allow it to introduce a range of differentiated exotic products and thereby increase turnover; by implication, CrownBet seemed to argue that Longitude gives Tabcorp additional power in the market for consumer wagering, exacerbating concerns about the anti-competitive effect of merger authorisation. The Tribunal was not greatly assisted by discussion of the competitive advantages conferred by Longitude. Tabcorp’s use of Longitude seems just as likely to continue in a future with the merger as a future without the merger.
 CrownBet also argued that a stand-alone Tatts could easily adopt Longitude and replicate Tabcorp’s strategy of releasing new exotics, thereby demonstrating that many revenue benefits claimed by Tabcorp are not merger-specific. The Tribunal has already addressed the issue of the position of Tatts if the merger does not proceed. It is not certain that a stand-alone Tatts would have sufficient pooling liquidity to adopt Longitude in the future. In any event, the impact of Longitude on the pooling benefits model remains unclear.
 Mr Catterall of Racing.com contended that:
if the merger proceeds, the predicament for Racing.com is far more dire, in terms of its long-term strategy to incrementally acquire the rights to thoroughbred racing vision in other jurisdictions in Australia and, over time, build up a credible alternative to Sky’s offering.
 The Tribunal agrees with at least three reasons, as identified by Racing.com, as to why its ongoing presence in racing media is beneficial in facilitating competition. First, the existence of Racing.com provides competitive tension in the acquisition of media rights from PRAs. Secondly, the existence of Racing.com provides opportunities for the provision of digital streaming content to corporate bookmakers for use on their online wagering platforms. Thirdly, Racing.com provides a clear opportunity to expand the distribution of thoroughbred racing media content to a wider audience than it currently reaches.
 The Tribunal is concerned to ensure that racing media remains a competitive space, and is satisfied this will occur if the merger proceeds. However, it does not agree with predictions of a dire future for Racing.com. Historical reasons for the mutually dependent relationship between the racing industry in each jurisdiction and an exclusive licensee acting as retail wagering operator and broadcaster have been diminishing for over a decade. Trends in consumer preferences for online, fixed-odds and sports wagering will not be turned around by this merger. It is not disputed that racing vision facilitates racing wagering. Racing authorities are aware that they have a choice between licensing a restrictive package of exclusive media rights to be broadcast to a shrinking retail consumer base, or a non-exclusive suite of rights to whichever party or parties can ensure the widest distribution of their racing content to the widest consumer audience. If those racing authorities prefer the latter option, the Tribunal is of the view that Racing.com does not face the existential crisis to which Mr Catterall alludes.
 The Tribunal notes the concerns raised [XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XXXX XXXX XXXXX XX XXXXX XX XXX XX XXX XXXX XXXX XXX XX]. The Tribunal takes the view that existing arrangements will not reduce competition with respect to the future acquisition of these media rights.
 The Victorian Racing Interveners identified a concern they described as ‘retail arbitrage’: the shifting of revenue by a vertically integrated Tabcorp from its wagering division to its broadcasting division. Tabcorp must share a per-centage of its wagering profits with the racing industry, and Tabcorp sells both wagering and broadcasting services to third-party venues. The concern raised is that it would be beneficial for Tabcorp to shift revenues and profits earned from pubs and clubs from its wagering division to its broadcasting division, and thereby minimise its payments to the racing industry. As described by Mr Wright, the General Manager of the Greenbank RSL Services Club Ltd, it is clear that:
Sky Racing is an essential part of the wagering facilities – you can’t have the TAB facility without Sky Racing, because no one will bet on a race if they can’t watch it.
 However, Mr Freeman of Tabcorp stated that Tabcorp has “one rate card; we apply it nationally”, suggesting that there is no advantageous profit-shifting by Tabcorp in its sales of Sky in Victoria, New South Wales and the Australian Capital Territory relative to its sales of Sky in the Tatts jurisdictions. The Tribunal did not hear enough to conclude that “there is a real chance, and not a mere possibility” of retail arbitrage.
 The Victorian Racing Interveners contended that a decrease in funding for the Victorian racing industry would lead to a decline in participation in premium events by international horses, and that a consequence of this would be a decline in international tourism – a reduction in exports, a mandatory consideration under s 95AZH(2). Flow-through of benefits has already been discussed; the Tribunal is not of the view that the merger will lead to a decrease in funding for the Victorian racing industry. The question of how Racing Victoria allocates its funding to premium events is not for the Tribunal to determine, but is a matter for Racing Victoria.
 Mr Fowler raised concerns of fraudulent activity in the racing industry and the provision of racing media, and elucidated an alleged conflict of interest in Tabcorp’s provision of both wagering and racing media services. He conceded that his submission went beyond the scope of a competition analysis, but all public detriments arising from the merger may be considered in response to an application under s 95AU. However, the Tribunal was not taken to any evidence of the alleged falsification of race distances or results, and therefore cannot conclude that such a public detriment will arise from the merger.
 Racing Clubs Tasmania (‘RCT’) noted that the governments of the Australian Capital Territory, Northern Territory and Tasmania fund the racing industries directly, rather than PRAs in these jurisdictions receiving funding from wagering levies. It seems to the Tribunal that RCT took the view that the exclusive licensee in each jurisdiction negotiates race field fees, and can use its bargaining power to drive this funding lower. The evidence put before the Tribunal was that race field fees are established under legislative and regulatory provisions. It may well be that the exclusive licensee has some influence in lobbying governments for change, but this is not the same as driving down its obligations at the negotiating table. It must be kept in mind that it is not only the exclusive licensee, but also the corporate bookmakers, who carry obligations under the regulatory framework of race field fees in each jurisdiction.
 Responsible Wagering Australia (‘RW Aust’) is an organisation consisting of five members (Bet365, Betfair, CrownBet, Sportsbet and Unibet) “united by their commitment to support the development of a strong, sustainable and effective regulatory environment for wagering in Australia”. It is an organisation that also happens to represent competitors of Tabcorp and Tatts in the provision of wagering services. Mr Stephen Conroy of RW Aust claimed that the Merged Entity would have “strong incentives to resist regulatory reform in favour of consumers as well as reform in support of sports and racing integrity, deterring organised crime and tackling problem gambling”. During the proceeding, the ability of Tabcorp, Tatts or the Merged Entity to resist regulatory reform was the subject of some speculation with respect to POC taxes, changes to advertising regulations, and in-play betting; but not with respect to organised crime and problem gambling. The Tribunal has no basis to conclude that Mr Conroy’s claim has any substance or is other than speculation.
275 We maintain these observations.
276 Mr Fowler subsequently made a further submission detailing his allegations. The Tribunal is not in a position to investigate or assess those allegations further, but has concluded that they would have no significant effect on the assessed consequences of the merger.
277 We also observe the following submission made by CrownBet:
It will be difficult for the Tribunal to quantify the value of this anticompetitive detriment in precise monetary terms. However, drawing from the expert evidence, the range of allocative efficiency losses (expressed in net present value terms over ten years) may be in the order of [XX XXX XXXXX XXX XXX XXX XXXX].[*]
[*] Footnote: This calculated range is based on assumed price rises of between 5-7% in wagering services and none of the claimed cost saving or revenue benefits being accepted as public benefits. Even if assumptions highly favourable to Tabcorp were made (which in CrownBet’s submission would not be open on the evidence) – for example, all of the claimed cost savings accepted as public benefits and a 5% price rise limited to totalisator and totalisator-derivative wagering – the net detriment to the public would still be in the order of [XX XXX XXXXX XXX XXX XX]
278 We have not found that the anti-competitive detriment assumed by CrownBet will occur. Rather, we have found that the primary and dominant source of competitive pressure stems from the corporate bookmakers. Therefore, we reject this submission of CrownBet.
279 The Tribunal makes an observation on scale as far as concerns the corporate bookmakers and the evidence. The Tribunal does not rely on any evidence concerning the size and scale of the corporate bookmakers individually. However, there is ample evidence that there are benefits of scale, and there is no reason not to attribute these benefits to an Australian market. Without considering the issue of scale, there is – as explained in these Reasons – evidence of the growth of corporate bookmakers and their market share. The Tribunal does not need evidence that shows that the global scale of corporate bookmakers translates into significant scale in the Australian wagering market or the ability to leverage global scale to obtain benefits in the Australian wagering market. Without this evidence, the Tribunal has been able to conclude that the proposed acquisition is likely to encourage competition having regard to the future role of the corporate bookmakers and the market (and various segments of the market).
280 As mentioned at the outset, the task of the Tribunal under s 95AZH is to consider the application of Tabcorp and to refuse it unless the Tribunal is satisfied that, in all the circumstances, the proposed merger would result in, or be likely to result in, such a benefit to the public that the proposed merger should be allowed to occur. If it is so satisfied, the Tribunal may grant the authorisation sought.
281 The Tribunal rejects the contentions that there is likely to be an anti-competitive detriment, that there is evidence that any anti-competitive detriment is likely to generate dead-weight losses that exceed the asserted public benefit, and that the public benefits relied upon by Tabcorp have not been adequately verified. The objections raised by the ACCC (and the interveners) become immaterial once it is appreciated that there are no material detriments, and that the proposed merger is likely to encourage competition in the way the Tribunal has explained.
282 The Tribunal concludes that the benefits to the public which the Tribunal has found to exist, and which it has taken into account, are substantial. The detriments identified by the ACCC and the interveners are unlikely to either arise or are not otherwise material.
283 The proposed merger is consistent with the trend towards industry consolidation, with the Merged Entity itself acquiring greater scale in addition to lower costs. The Merged Entity will be a more effective competitor and the merger is likely to lead to greater competition particularly in online wagering. This increased competition brings about competition benefits to the racing industry and to consumers, and would add to the likely positive net effect of the proposed merger. The Merged Entity will not just benefit its shareholders – this is not just about the millions of dollars in synergies that will be shared among the shareholders. The substantial benefit to the consumers and the public generally comes from the overall increased competition.
284 Consequently, the Tribunal is satisfied that the proposed merger should be authorised and it is hereby granted under s 95AT of the Act.
285 As the Tribunal is satisfied that the proposed merger is likely to result in substantial public benefits and that the detriments identified by the ACCC and the interveners are unlikely to either arise or are not material, the Tribunal is satisfied in all the circumstances that the proposed merger would result, or would be likely to result, in such a benefit to the public that the acquisition should be allowed to occur.
286 Accordingly, for the various reasons detailed herein, the Tribunal has determined to grant the authorisation Tabcorp seeks for the proposed merger subject to one condition.
287 Tabcorp and the ACCC have agreed the terms of an undertaking pursuant to s 87B of the Act to address the detriment arising from the combination of monitoring companies in Queensland, involving the divestment of Odyssey.
288 Tabcorp and ACCC agree that if the merger is authorised, it should be on condition that Tabcorp provide that undertaking to the ACCC.
289 The Tribunal will make a Determination in identical terms in each application.
I certify that the preceding two hundred and eighty-nine (289) numbered paragraphs are a true copy of the Reasons for Determination herein of the Honourable Justice Middleton, Mr GF Latta AM and Dr DR Abraham.
Act means the Competition and Consumer Act 2010 (Cth).
ACCC means the Australian Competition and Consumer Commission.
Annexure means the Annexure to the Tribunal’s determination dated 22 June 2017, including all Schedules and Attachments to the Annexure.
ASX means Australian Stock Exchange.
Authorisation means authorisation of the Proposed Acquisition by the Tribunal.
Bookmaker means wagering services provider.
Click-to-Call means the use, by bookmakers, of automated voice recognition in the provision of telephone wagering services.
Completion Date means the date on which the Proposed Acquisition is completed.
Condition means the condition set out in the Annexure.
Corporate Bookmakers means licensed wagering service providers who do not have a licence to provide pari-mutuel wagering services, nor a licence to provide retail wagering services.
CrownBet means the entity CrownBet Pty Ltd ACN 162 554 707.
EBIT means earnings before interest and taxes.
EGMs means electronic gaming machines.
EGM Services means Monitoring Services, Gaming Systems and Services, and Field Services.
Exotic Wagering means wagering on more than one contingency.
Field Services means EGM repair and maintenance services at the site of operation.
Financial Year (FY) refers to the period from 1 July of the previous year to 30 June in that year.
Fixed-Odds Wagering means the wagering service by which a wagering services provider offers an unchanging winning return to the consumer, regardless of the actions of other consumers (notwithstanding unusual events, eg scratchings).
Gaming Systems and Services means services that assist venue operators to optimise EGM performance, including assistance with financing, training, venue design, product advice, marketing, loyalty programs, and (non-monitoring) regulatory compliance.
Greyhound Racing Victoria means Greyhound Racing Control Board, trading as Greyhound Racing Victoria ABN 76 642 748 029.
GST means the Goods and Services Tax.
Harness Racing Victoria means Harness Racing Board, trading as Harness Racing Victoria ABN 22 764 910 853.
In-Play Wagering means wagering after an event has started, allowing bookmakers and wagering consumers to react to changes as the event unfolds.
Merged Entity means the future corporate entity that (pending authorisation) would result from the Proposed Acquisition.
Merger Parties means Tabcorp and Tatts.
Monitoring Services means systems installed in EGMs for compliance with regulations to do with taxation, restrictions on the location of EGMs, and the provision of other information.
Multi means a type of wager combining a series of separate outcomes into one larger wagering product, with a concomitant decrease in the odds of (increase in the winning return to) those outcomes arising.
Non-Tatts Interveners means CrownBet, Racing.com and the Victorian Racing Interveners.
Pari-mutuel Wagering means the totalisator wagering service by which a wagering services provider accumulates a pool of funds to be returned in fixed proportions to the State licensor, Peak Racing Authorities, and consumers who have placed winning bets.
Pay TV means any commercial or home pay or subscription television service.
Principal Racing Authorities (PRA) means bodies established under State or Territory regulatory frameworks to manage the operation of a racing code in that jurisdiction.
Product Fees means obligatory payments to the racing industry made by the wagering operator that holds the exclusive retail and pari-mutuel licence in any jurisdiction. Obligation to make these payments may arise as a condition of the licence, or as a result of agreements entered into directly between the wagering operator and the PRAs in that jurisdiction as a consequence of the grant of the exclusive licence.
Proposed Acquisition or Proposed Merger means the proposed acquisition by Tabcorp of the issued share capital of Tatts by means of a scheme of arrangement made under s 411 of the Corporations Act 2001 (Cth), as described in the Merger Implementation Deed entered into between Tabcorp and Tatts on 18 October 2016.
Race Field Fees means regulatory fees levied on all licensed bookmakers, in return for the use in their wagering businesses of race field information compiled by State and Territory racing bodies.
Racing Media means live and historical audio-visual racing content.
Racing Victoria means Racing Victoria Limited ACN 096 917 930.
Racing.com means the entity Racing.Com Pty Ltd ACN 104 883 267.
Retail Channel means the distribution channel that operates through venues such as agencies, pubs, clubs, newsagents, convenience stores, supermarkets, chemists, or any other physical venue used in the ordinary course of business for consumers to visit and transact on-site.
Revenue (with respect to wagering) means the amount of money that a bookmaker retains from turnover after paying out the winning bets placed by consumers on an event or outcome.
Scratching means the removal of a competitor in a race or sporting event before its commencement.
Tabcorp means the entity Tabcorp Holdings Ltd ACN 063 780 709.
Tabcorp Retail Jurisdiction means Victoria, New South Wales and the Australian Capital Territory.
Take-out rate means the yield that a wagering services provider seeks to retain after paying out winning bets on an event or outcome.
Tatts means Tatts Group Ltd ACN 108 686 040.
Tatts Retail Jurisdiction means Queensland, South Australia, Tasmania and the Northern Territory.
Tote Derivative Wagering means wagering where odds are set by reference to the final totalisator dividend paid by one or more State TABs for the corresponding event, without the wagering services provider running its own pool.
Tribunal means the Australian Competition Tribunal.
Turnover (with respect to wagering) means the total amount of money wagered on an event or outcome.
Victorian Racing Interveners means the entities Racing Victoria, Harness Racing Victoria, and Greyhound Racing Victoria.
Wall-to-wall Content (in the context of racing media) means near-continuous live coverage of races across the thoroughbred, harness and greyhound codes in retail wagering venues. At present, ‘near-continuous coverage’ equates to a race from one of these three racing codes approximately every three minutes.
Yield (with respect to wagering) means revenue divided by turnover, expressed as a percentage.
List of Witnesses and Interested Third Parties
Managing Director & Chief Executive Officer: Tabcorp
Chief Executive Officer: Racing and Wagering Western Australia
Executive General Manager, Commercial Development: Tabcorp
Chief Financial Officer: Tabcorp
Acting Company Secretary: Tabcorp
Chief Operating Officer, Keno & Gaming: Tabcorp
Managing Director & Chief Executive Officer: Australian National Hotels
Chief Executive Officer: Clubs Queensland
Partner: IER Pty Ltd
General Manager: Australian Hotels Association (South Australia)
President: Community Clubs Victoria
Head of Regulatory & Corporate Affairs: Australian Leisure and Hospitality Group Ltd (ALH)
Chief Executive Officer: Australian Hotels Association (National)
Chief Executive Officer: Queensland Hotels Association
General Manager: Tasmanian Hospitality Association
Chief Executive Officer: Australian Hotels Association (Victoria)
Manager & Secretary: Darwin Greyhounds Association
Chief Executive Officer: Harness Racing NSW
Dr Eliot Forbes
Chief Executive Officer: Racing Queensland
Chief Executive Officer: Brisbane Greyhound Racing Club
Executive Chairman: WA Racing Representative Group
General Manager (Finance, Corporate and Major Projects): Australian Football League
Secretary-General: Asian Racing Federation
Chief Executive Officer: Australian Jockeys’ Association
Chief Executive Officer: Wyong Race Club
Chairman: Provincial Racing Association of NSW
Andrew Frederick Nicholl
Chief Executive Officer: Australian Trainers’ Association
Andrew Raymond O’Toole
Chief Executive Officer: Thoroughbred Racing NT
Operations Manager: Albion Park Harness Racing Clubs
Brenton James Scott
Executive Officer: NSW Greyhound Breeders, Owners and Trainers’ Association
Chief Executive Officer: Canberra Racing Club
Chief Executive: Racing NSW
General Manager: Canberra Harness Racing Club
Professor John Yovich
Managing Director and Chief Executive Officer: Western Australian Turf Club; Perth Raci ng
Managing Director and Chief Executive Officer: Tatts
Chief Executive Officer: Greyhound Racing South Australia
Chairman: Darwin Turf Club
Chief Executive Officer: Harness Racing SA
Chief Executive Officer: Tasracing
Chief Operating Officer, Gaming: Tatts
Chief Financial Officer: Tatts
General Counsel and Company Secretary: Tatts
Susan Lynn van der Merwe
Chief Operating Officer, Lotteries: Tatts
Chief Executive Officer: Thoroughbred Racing SA
Cormac Benedict Barry
Chief Executive Officer: Sportsbet
Patrick John Brown
General Counsel and Corporate Affairs Manager: Ladbrokes Digital Australia
Tony Donald Costain
Queensland General Manager: Hotel Clubs and Services
Executive General Manager, Merger and Authorisation Review: ACCC
Principal: Hines Pty Ltd
Joshua Damond Landis
Executive Manager, Public Affairs: Registered Clubs Association NSW
Michele (Michael) Lavarato
Chief Executive Officer: Campbelltown Catholic Club
Group Operations Manager: Club Central
Michael Paul Wilson
Chief Executive Officer: Ashfield Bowling Club
Timothy James Wright
General Manager: Greenbank RSL Services Club
Board Member: RSL & Services Clubs Association (Qld)
Commercial Director: CrownBet
Chief Executive Officer: Betfair
Managing Principal: The Strategy Canvas
Chief Operating Officer: CrownBet
Executive Director, Racing and Corporate Affairs: Melbourne Racing Club
Chief Executive Officer: Racing.com
General Counsel: Racing Victoria
General Manager, Finance: Racing Victoria
Company Secretary: VicRacing
Chief Executive Officer: Greyhound Racing Victoria
Chief Executive Officer: Harness Racing Victoria
Acting Chief Executive Officer and Chief Financial Officer: Racing Victoria
Head of Legal and Regulatory Affairs: William Hill
General Manager: Unibet (Betchoice)
Legal Counsel: Betfair
General Counsel: Sportsbet
Legal and Regulatory Counsel: Bet365
General Manager: Mercury Group Victoria
Dr Terry Clarke
AWARE Strategy, representing Racing Clubs Tasmania
Executive Director: Responsible Wagering Australia
President: Victorian Off-Course Agents Association
Chief Executive Officer: Australian Lottery and Newsagents Association
General Manager: Arana Leagues Club
Chief Operating Officer: Community Clubs Victoria
President: TAB Agents’ Association of NSW
Squire Patton Boggs
Solicitors: Racing and Wagering Western Australia
Chief Executive Officer: Australian Turf Club
Member: NSW Racing Industry Consulting Group
Chief Executive Officer: Ladbrokes Digital Australia
Matthew Dean Zaba
General Manager: Legal and Regulatory, Tabcorp
Michael Warren Scott
General Manager: Secretariat and Shareholder Relations, Tabcorp
Head of Distribution Strategy and Transformation: Tabcorp