Spreadex’s acquisition of Sporting Index escalated to in-depth investigation by CMA
Competition and Markets Authority takes probe into phase two with four-person panel deployed to examine monopoly concerns in UK spread betting market
Spreadex’s acquisition of Sporting Index has been upgraded to a phase two investigation by the Competition and Markets Authority (CMA) after the operator declined to provide information to the regulator.
The phase two investigation, which will last for 12 weeks and can be extended for up to a further four, will see an independent panel probe the merger.
Concerns had been raised over the deal, with suggestions it could lead to a monopoly on spread betting in the UK.
The independent panel will be chaired by Richard Feasey, a member of the CMA’s specialist utility panel and former group public policy director at Vodafone Group between 2001 and 2013.
He will be joined by former British Airways general counsel Maria Da Cunha, ex-Royal Mail compliance director Anne Fletcher and founder of the Competition Economists Group Paul Muysert.
The in-depth investigation has been given the greenlight after Spreadex declined to offer undertakings as part of the phase one investigation.
The CMA had given the St Albans-based firm five working days from 4 April to provide “meaningful solutions” to its concerns.
On 10 April, Spreadex informed the CMA it would not offer such undertaking, allowing the regulator to push ahead with phase two.
In the terms of a reference document published by the CMA, the body said the four-person panel will now investigate and explore the merger on two fronts.
Those being “a) whether a relevant merger situation has been created; and b) if so, whether the creation of that situation has resulted, or may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services”.
The CMA added that it will publish an administrative timetable for the investigation as “soon as it is practical”.
The investigation into the merger began in January, with the CMA launching a formal inquiry in February.
Spreadex confirmed the acquisition of Sporting Index from French operator La Française des Jeux (FDJ) in November 2023 for an undisclosed fee.
The CMA’s phase one investigation established there was evidence that FDJ had received bids from two other “credible potential purchasers” which would have been less anti-competitive buyers than Spreadex.