UK Watchdog Clears Spreadex Sale of Sporting Index Amid Monopoly Fears

The UK’s Competition and Markets Authority (CMA) has approved the sale of Sporting Index’s assets by Spreadex, resolving competition concerns arising from the acquisition of the rival spread betting platform. Spreadex had purchased the business-to-consumer (B2C) arm of Sporting Index from FDJ in November 2023 for an undisclosed amount, but the CMA determined the merger would harm market competition.

Following an in-depth Phase 2 investigation, the CMA’s independent panel found that the acquisition effectively created a monopoly in the UK licensed online sports spread betting sector. According to Reuters, the CMA concluded that reduced competition could lead to higher prices, a more limited range of products, and a diminished user experience for consumers.

Panel’s Decision and Spreadex’s Response

Richard Feasey, chair of the CMA’s independent panel reviewing the case, emphasized the importance of maintaining competition in the sports spread betting market. He stated:

“This deal eliminates competition in the supply of licensed online sports spread betting services in the UK. 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.”

Despite the CMA’s findings, Spreadex had initially criticized the ruling. The company had argued that the deal was relatively small in scale and had a limited impact on the broader sports betting market. According to Reuters, Spreadex further contended that if it had not acquired the Sporting Index B2C division, the likely outcome would have been the closure of the business due to a lack of credible alternative bidders.

Related: UK’s CMA Raises Concerns Over Spreadex-Sporting Index Acquisition

Remedy for Competition Concerns

The CMA panel ultimately deemed the proposed sale of Sporting Index sufficient to address its concerns. The sale will allow the market to maintain two competing operators, ensuring consumers continue to benefit from choice and competitive pricing in the niche sports spread betting market.

Sports spread betting differs from traditional fixed-odds betting by allowing wagers on a range of outcomes for a given event, offering greater variability in potential pay-offs. The panel highlighted the importance of preserving competition in this specialized market, which relies on competitive dynamics to deliver high-quality services and fair pricing.

Financial Context

Spreadex has demonstrated robust financial performance, reporting £103.2 million in revenue for the financial year ending May 2024. Despite its success, the company has faced regulatory hurdles since acquiring Sporting Index. In July, Spreadex expressed strong opposition to the CMA’s provisional findings, asserting that the acquisition did not negatively impact competition.

With the approval of the asset sale, Spreadex’s brief ownership of Sporting Index is set to conclude, marking a resolution to the regulatory dispute while ensuring consumer interests are protected in the UK’s sports spread betting market.

Source: Reuters