The Competition and Markets Authority (CMA) is investigating the acquisition of Sporting Index by Spreadex Limited and its impact on the UK’s spread betting market.
The deal was announced in November 2023, with SpreadEx agreeing on ‘undisclosed terms’ with Groupe FDJ to acquire spread betting rival Sporting Index.
On 15 January, the CMA announced that it had launched an inquiry, evaluating SpreadEx acquisition of Sporting Index “under mergers type within the recreation and leisure market sector”.
As detailed by the enforcement order: “The CMA has reasonable grounds for suspecting that it is or may be the case that Spreadex Limited and the business-to-customer (B2C) business of Sporting Index Limited (the Target business) have ceased to be distinct.”
Referencing the Enterprise Act of 2022, the CMA must investigate whether the merger of SpreadEx and Sporting Index will substantially diminish competition within any UK markets.
The CMA enforcement demands that both firms remain separate operationally, maintaining distinct IT, customer and supplier databases, and staff roles, until the investigation is concluded.
Founded in 1992, Sporting Index is recognised as the pioneering company in spread betting, providing odds on the accuracy of a wager, rather than a standard “win or lose” outcomes offered by fixed-odds betting.
Of distinction, Sporting Index’s political markets were often referenced by media, allowing punters to predict the outcome of General Elections against the accuracy of polls.
Since 1992, the company has undergone several ownership changes, with its value ranging from £53m to £76m during past sales between private equity funds.
In 2019, Sporting Index came under the ownership of FDJ, as the French lottery group acquired parent company Sporting Group to launch its B2B technology unit, primarily through the trading and risk management services offered by Sporting Solutions.
SpreadEx was founded in 1999 by city trader Jonathan Hufford, who headquartered the business in St Albans, Hertfordshire.
Upon completing the deal, SpreadEx stated that it would maintain Sporting Index as a standalone business, in which it would enhance the firm’s platform by delivering new trading features for its customers.
As stands, the enforcement order prohibits the integration of Sporting Index business without CMA’s consent that competition concerns have been addressed.