Outlook: Ladbroke/Coral

PETER MANDELSON'S decision to block Ladbroke's takeover of Coral shows why it is always dangerous to take a punt on which way the regulators will jump. So sure was Peter George that the deal would face no competition hurdles that he wagered pounds 363m of shareholders' funds on Coral last December and handed over the folding notes four months later.

But since the deal would give Ladbroke 30 per cent of the market, the off-course betting always favoured a monopolies referral. When this duly happened Mr George still fancied his chances, believing that the agreement to dispose of 133 betting shops to the Tote would satisfy the "quarter mile rule" - the notion that no punter could be bothered to walk more than 440 yards to find another bookie.

But the times and the odds moved badly against him. The last time the MMC investigated the bookmaking business, when Mecca bid for William Hill in 1989, it concluded that it was a series of local markets. Nine years on it has swapped horses and decided that changes in technology have made it a national market, meaning that to reduce the big three to the big two is a non-starter. Mr George now has to conduct a fire sale of Coral in a falling market, knowing that the most obvious bidders are already ruled out. That must reduce his chances of recouping his original stake and hanging onto his job.

The Ladbroke chief executive must be looking enviously at Ed Wallis of PowerGen. He also took a punt - paying pounds 1.9bn for a regional electricity company in advance of regulatory clearance. Ed's bet looks to have paid off, even if he is parting company with more power stations than planned.

Sadly, neither decision casts much light on Mr Mandelson's attitude towards mergers, since he is in favour of handing over all decision-making powers in this area to an independent competition authority.