(Adds further Desmond comments, board response, shares)
By Paul Sandle
LONDON, Nov 24 (Reuters) - Shareholders in British bookmakerLadbrokes strongly backed its planned merger with rivalGala Coral on Tuesday but rebel investor Dermot Desmond vowed tofight on.
Ladbrokes agreed the 2.3 billion pound ($3.5 billion)all-share merger in July to give it the clout to make a biggersplash online, where it has been outgunned by rivals.
It is one of a series of deals in the gaming sector, whichhas been hit by higher taxes and tighter regulation.
The holders of 96 percent of Ladbrokes shares voted toapprove the deal at a meeting on Tuesday.
But Desmond, the Irish billionaire owner of Celtic soccerclub, argues it is not the answer to Ladbrokes' online problemsand will instead saddle the group with debt and result in lowerpayouts to shareholders.
The tycoon, who holds a 2.8 percent stake, was sharplycritical of the betting group's management at the meeting.
"I believe there is widespread acceptance that the Ladbrokesboard and management are not good enough and that performanceover the last five years has been abysmal," he said.
He voiced concerns about a 75 million pound payment it hadagreed to make to Playtech, the company providing itsonline platform, as a result of the deal.
He also said there was no clarity on the benefits the tie-upwould create, until regulators had decided how many of thecombined group's around 4,000 shops would need to be sold.
Chairman Peter Erskine acknowledged "there were things wecould have done differently", but he said the Coral merger wasthe best way to gain the scale needed to succeed online.
After the meeting, Desmond called the board's approach "aslap in the face to the shareholders" and said he would continuethe fight. "This is only the first round of 15 rounds," he said.
Desmond said one option would be to convene anothershareholders meeting, for which he would need the support of theholders of 5 percent of the shares.
Ladbrokes announced the terms of the deal with Coral, ownedby group of private equity companies including Apollo, Anchorageand Cerberus, in July.
Desmond, who said he had bought his stake about nine yearsago at around 3 pounds a share, did not make his concerns publicuntil a week ago.
The shares were trading down 0.5 percent at 110 pence at1500 GMT. ($1 = 0.6630 pounds) (Editing by Jason Neely and Keith Weir)
