Their proposed $11 billion merger was thrown into uncertainty this week when the Federal Court decided its approval should be quashed and returned to the competition tribunal for review.

The Australian Competition and Consumer Commission successfully argued in the court that the tribunal had incorrectly assessed the wider potential detriments of the merger.

Despite the setback, Tabcorp and Tatts insisted to the stockmarket the deal would proceed in line with its original timetable, which includes a shareholder vote on October 28 and having the merger sealed by the start of November.

Justice John Middleton of the Australian Competition Tribunal had initially told the parties the process would be fast-tracked using only written submissions but it has since been decided that there will be a directions hearing on Tuesday.

"It is [unlikely] they will have a decision by Thursday," said a source close to the proceedings. "That timeframe isn't going to stand. It's been superseded."

Fairfax Media understands that ahead of the directions hearing on Tuesday, some parties may seek a one-month timeframe for the tribunal's approval decision to be reviewed, which would raise the risk of delaying the shareholder vote.

The Federal Court on Thursday released the reasons for its decision to "set aside" the tribunal's original approval of the Tabcorp-Tatts merger bid in June.

The court determined that the approval process should be widened to include an examination of arguments led by ACCC about the potential "lessening of competition in the wagering services market".

The ruling said it appeared that the tribunal had "embarked upon a process of reasoning which had the unfortunate side effect of causing it to overlook the ACCC's case on detriment", and it did not seem the tribunal had dealt with the ACCC's "more confined case".

The court rejected two other grounds for appeal set out by the ACCC. "The ACCC is entitled to succeed, but only on its first ground," the ruling said.

The Tabcorp-Tatts merger has been under a cloud ever since the two appeals by the ACCC and rival betting operator CrownBet were lodged in July, but Tabcorp has consistently told shareholders it was "committed to the transaction" and confident of delivering the deal.

CrownBet welcomed the court's ruling on Wednesday. "The merger is bad for competition, bad for punters and not in the public interest," its chief executive, Matt Trip, said.

Tabcorp chief executive David Attenborough told investors the year had been "strategically important" for the company, and the hefty investment in its campaign to take over Tatts was worth any risk the regulators might knock the deal back.

"The combination is expected to deliver at least $130 million per annum ... from synergies and business improvements," he said.

Tatts and Tabcorp have hoped a merger would make them strong enough to expand globally, compete with international bookmakers and bid for wagering and lotteries licences overseas.

Except for Racing Victoria, every racing state has supported the merger, saying it could lead to a national TAB, turn Australia into one of the most profitable racing jurisdictions in the world and realise an extra $50 million a year for the racing industry.