SBC News Voice of the Sports Betting Industry
The Competition and Markets Authority (CMA) has detailed that the merger of Spreadex and Sporting Index has raised ‘provisional competition concerns’ on the UK’s spread betting market.
The judgement was made by an independent panel, reviewing phase-2 of the CMA’s inquiry into Spreadex acquisition of Sporting Index’s retail business, initiated in November 2023.
In January, the CMA intervened on the deal’s proceedings, referencing the Enterprise Act of 2022, to evaluate whether SpreadEx and Sporting Index will substantially diminish competition within its markets.
As detailed: “The CMA’s Phase 2 investigation, which is led by an independent panel, focused on licensed online sports spread betting, where Sporting Index and Spreadex are the only two operators.”
Spreadex, the UK’s largest spread betting operator, was required to prove a point of unique competitive distinction to proceed with its merger with Sporting Index.
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.
The CMA’s provisional findings highlight that the merger would remove the only other licensed provider in the UK for sports spread betting. This could lead to a reduction in competition, potentially resulting in a worse user experience, a more limited range of products, and/or higher prices for UK consumers.
The CMA is considering remedies to address these concerns, including the possibility that Spreadex may need to sell some or all of the Sporting Index assets it acquired. The final report on the merger is expected to be issued by 26 November 2024, following consultations on the provisional findings and possible remedies.
Richard Feasey, the chair of the independent panel stated: “Having assessed this deal, our provisional conclusion is that it raises serious competition concerns in the licensed online sports spread betting market. It would remove the only other licensed provider of sports spread betting in the UK and could lead to a worse user experience for consumers. We will now be considering how best to remedy this lessening of competition.
“Given that Spreadex has already acquired certain Sporting Index assets, our initial view is that Spreadex would need to divest sufficient assets to allow a purchaser to operate a rival licensed spread betting business on a standalone basis.”
