The Competition and Markets Authority (CMA) has ruled that Spreadex must sell its Sporting Index business on competition concerns in the United Kingdom. The UK regulator has concluded that Spreadex’s acquisition of its rival, B2C arm of Sporting Index from Sporting Group Holding last year, impacts market competition and creates a monopoly.

The CMA launched a comprehensive investigation in February into the acquisition of Sporting Index by Spreadex, both of which are major players in the sports-betting industry. The move came after Spreadex declined to address the regulator’s concerns about the deal.

Investigation’s findings

The regulator completed its initial Phase 1 investigation in April. The second phase concluded that the acquisition creates a monopoly and eliminates competition. The panel for CMA’s in-depth Phase 2 investigation concluded that the merger could lead to a worse user experience, create a limited range of products, and/or lead to higher prices for consumers in the UK.

“This deal eliminates competition in the supply of licenced online sports spread betting services in the UK,” said Richard Feasey, chair of the independent panel reviewing the merger. “Sports spread betting – like any other market – needs competition to drive good customer experience, maintain choice and keep prices competitive.

“To achieve this, we have decided that Spreadex should sell Sporting Index, so that customers can choose between two firms for the best user experience and prices, rather than having to use only one.”

A sale remedy proposed by Spreadex, with some modifications, has been accepted by the CMA. The regulator has 12 weeks to accept the undertakings or make a counter order requiring Spreadex to sell Sporting Index to a suitable CMA-approved buyer.

The acquisition and its implications

Spreadex, a leading sports spread-betting firm, acquired its rival Sporting Index from the French gambling giant Francaise des Jeux. The details of the acquisition, which was completed last year, have not been disclosed.. However, the deal has raised eyebrows in the regulatory community due to its potential implications for competition in the UK sports spread-betting market.

The CMA’s initial investigation (Phase 1) found that the deal could potentially create a monopoly in the UK sports spread-betting market. This is because Sporting Index and Spreadex are the only two licensed operators of sports spread betting in the UK. The removal of Sporting Index from the market could therefore leave Spreadex as the sole provider, raising concerns about reduced competition.

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