Jewel Casino Pty Ltd (Jewel) operates a large casino in Sydney and, until 2010, it was the only casino that operated in Sydney. In 2010, with approval from the NSW Government, Mega Gambles Pty Ltd (Mega) opened a second casino in Sydney that competed directly with Jewel. The casinos generated their revenue from gamblers, including both ordinary gamblers and high-roller gamblers (that is, gamblers that gamble hundreds of thousands or millions of dollars). To get gamblers into its casino, the casinos offer the gamblers various perks, such as tickets to shows, use of yachts, free dinners and drinks, and luxury hotel rooms. When Mega began to operate in Sydney, it began competing with Jewel for its customers and began offering a greater variety, and higher quality, of perks to lure gamblers. In its first eight years of operation, Mega cut significantly into Jewel’s market share and, by 2018, it had about 50% of the casino market share in NSW. In 2018, the directors of Mega and Jewel corresponded by email and agreed that the competition between the businesses was causing them to spend a lot of money on marketing and it would be in both of their interests if they stopped competing for customers from different parts of Australia. The directors came up with an agreement whereby Mega would only market its casino to people in Western Australia, Queensland, and Northern Territory, Jewel would only advertise its casino to people in South Australia, Victoria, ACT and Tasmania, and both businesses would market their casinos to people in NSW. Despite the agreement made by the businesses, both casinos continued to market themselves all throughout Australia (that is, they appeared to disregard the agreement). However, both casinos did begin offering the exact same perks and benefits to high-rollers and stopped trying to outdo each other or attract the other casino’s high rollers. In 2019, the NSW Government began to investigate Mega for potential breaches of its casino licence. It was found that Mega had allowed criminal organisations to launder money through the casino and facilitated other criminal activity, and consequently that Mega had on multiple occasions breached state and federal laws and its casino licence. Following the investigation, the number of people visiting Mega’s casino dropped, and its revenue plummeted. This was compounded by the effects of the pandemic which caused a further reduction in visitors. Mega’s directors began to consider how to reduce the costs of the company and how to get the company back on track. The first option Mega considered was an offer that had been made by Jewel to acquire Mega. Pursuant to the offer, Jewel would purchase Mega and all of its assets and operate both casinos under the Jewel brand. This option appealed to the directors of Mega as it would be a great outcome for its shareholders and allow Mega to retain all of its staff members. The second option Mega considered was to revamp the casino to attract young and wealthy gamblers. Mega’s research showed that having a younger staff would make the casino more appealing to younger gamblers. Accordingly, the revamp of the casino would involve firing any staff member that was over 30 years old and only hiring people under 30 years old.

A. Advise Mega on whether there is any legal risk in respect of its firing its staff members that are over the age of 30 and its policy that it will not employ anyone over the age of 30 in its casino.

B. Advise Jewel and Mega on whether the ACCC would authorise the merger of the companies. In providing this advice, consider and refer to the relevant legal rules in relation to mergers and the factors both for and against the merger which the ACCC might consider.

C. Advise the ACCC on whether Jewel and Mega have engaged in any anti-competitive conduct and/or cartel conduct in breach of the Australian Competition and Consumer Act 2010 (Cth).

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