CMA raises “significant competition concerns” over Spreadex’s acquisition of Sporting Index
UK competition regulator completes phase one review of merger as both firms asked to provide “meaningful solutions” to potential spread betting monopoly
The UK Competition and Markets Authority (CMA) has raised concerns that Spreadex’s acquisition of Sporting Index could “substantially lessen competition” in the vertical.
Spreadex acquired Sporting Index from La Française des Jeux (FDJ) in November 2023 for an undisclosed fee.
The CMA has since concluded a “phase one” investigation into the online sports spread betting market in the UK and deemed further action is required.
The watchdog noted that Spreadex and Sporting Index are the only licensed spread betting operators in the UK and that the merger may have created a monopoly.
The CMA said: “As part of the investigation, Spreadex and Sporting Index suggested they would be constrained by fixed odds betting providers after the merger, but the CMA has not received sufficient evidence to support this.”
The body added that without a competitor, the incentive for Spreadex to offer competitive odds for customers could be diminished.
Notes from the CMA’s report confirm it had received evidence from FDJ on alternative buyers of Sporting Index, while examining internal documents from Spreadex to understand the rationale behind the move.
The CMA said there was evidence that FDJ received bids from two other “credible potential purchasers”.
These credible purchasers, according to the CMA, would have operated the Sporting Index business in competition with Spreadex, and therefore would be classed as less anti-competitive buyers.
Spreadex and Sporting Index now have five working days from yesterday, 4 April, to respond with “meaningful solutions”.
The CMA said that should this evidence not be provided, or deemed inadequate, the deal will be referred to a “phase two” investigation.
The CMA said this would last 24 weeks, with the option to extend it by a further eight weeks and allow an independent panel of experts to prove initial concerns established in phase one.
The investigation into the merger began in January after the CMA initiated an initial enforcement order and, on 6 February, launched an inquiry.
Naomi Burgoyne, the CMA’s phase one decisionmaker for the case, said: “We believe that this deal could remove competition for sports spread betting services and give Spreadex a monopoly in this market.
“It is important that customers can rely on competition in the market to keep odds competitive.
“Spreadex now has five working days to resolve our concerns. If they are unable to do so, the merger will be referred to a more in-depth investigation,” she added.
Based in St Albans, Hertfordshire, Spreadex was founded in 1999, while Sporting Index was established seven years earlier, in 1992, and went on to dominate the spread betting industry. They both also offer fixed-odds betting.
Their spread betting activity is regulated by the Financial Conduct Authority.