The UK’s Competition and Markets Authority (CMA) has today (22 November) ruled that Spreadex should sell its Sporting Index business after concluding the acquisition of its rival impacts market competition and creates a monopoly.
Spreadex purchased the B2C arm of Sporting Index from Sporting Group Holding last year. However, the deal came under scrutiny as to how it could reduce market competition in the UK.
Both companies provide online fixed odds betting and sports spread betting to customers based in the UK. Spreadex also operates financial spread betting and online casino games.
Such concerns led the CMA to investigate the acquisition, launching a Phase 1 probe in February this year. In April, the CMA said it would look more closely at the deal and whether it led to a substantial lessening of competition via a more in-depth investigation (dubbed Phase 2).
Today, the CMA has published its findings on the case, ultimately ruling Spreadex should sell Sporting Index. The CMA said such a sale would satisfy its concerns about competition in the online sports spread betting sector.
Sporting Index acquisition created a monopoly in the UK
In its evaluation, the CMA said its Phase 2 investigation found the deal created a monopoly in the UK market. By acquiring Sporting Index, it said that Spreadex effectively eliminated its competition within this sector.
An independent CMA panel also concluded the deal could lead to a worsened user experience, as well as a more limited range of products and higher prices for consumers in the UK.
It considered submissions and responses to information requests from both parties as well previous Sporting Index owner Sporting Group. La Française des Jeux, which owns Sporting Group, also gave opinion on the case, as did several third parties.
“The panel has concluded, with some modifications and enhancements, the sale remedy proposed by Spreadex is sufficient to remedy the competition concerns and restore competition in this market that is lost as a result of the deal,” the CMA said.
The CMA now has 12 weeks to either accept final undertakings from Spreadex or make a final order requiring Spreadex to sell Sporting Index to a CMA-approved buyer.
CMA: sports spread betting needs competition
Commenting on the ruling, Richard Feasey, the chair of the independent panel reviewing the merger, said like any other market, sports spread betting needs competition. As such, a sale is the only way to ease the CMA’s concerns about the merger.
“This deal eliminates competition in the supply of licensed online sports spread betting in the UK,” Feasey said. “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.”
The CMA added in a separate note that while the decision marks the end of its investigation, it will closely monitor the progress made in implementing the proposed sale.
