Spreadex to Sell Sporting Index Due to Monopoly Concerns
The UK Competition and Markets Authority (CMA) has ordered Spreadex to divest itself of Sporting Index due to significant competition concerns in the licensed online sports spread betting market. This decision comes after an extensive investigation into the merger concluded that the deal stifled competition and risked negatively impacting consumers.
A Consolidated Market Could Hurt Consumers
In 2022, Spreadex acquired Sporting Index’s business-to-consumer operations from Sporting Group Holding Limited. Both firms are leading players in the UK market, offering sports fixed-odds and spread betting services. The CMA concluded that the merger had, in effect, created a monopoly in the UK’s licensed online sports spread betting market, potentially leading to significant negative consequences.
According to the CMA, such market consolidation could significantly restrict consumer choice and worsen the customer experience as the remaining monopoly became less incentivized to invest in innovative products or a customer-centric service. Furthermore, reduced market pressure could lead to increased prices, compounding on the previous issues.
Sports spread betting – like any other market – needs competition to drive good customer experience, maintain choice, and keep prices competitive.
Richard Feasey, CMA independent panel chair
These competition concerns arose due to the overall scarcity of spread betting providers in the UK. Spread betting is distinct from fixed-odds betting, as it involves wagering on the range of outcomes rather than binary win/lose results. Potential gains or losses can be much greater than the initial stake, making the service high-risk and only appealing to certain types of bettors.
A Potential Buyer Has Already Expressed Interest
The CMA has given Spreadex a 12-week timeline to submit final undertakings, after which it will be compelled to face a formal order requiring the sale of Sporting Index. Any potential sale must first meet the CMA’s approval, ensuring the buyer can effectively operate in the market and restore competitive dynamics.
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.
Richard Feasey, CMA independent panel chair
Star Racing, a division of Star Sports, has expressed interest in acquiring Sporting Index. The company aims to leverage its expertise in spread betting and fixed-odds wagering to rejuvenate the Sporting Index brand. While Star Sports acknowledged several challenges around a potential acquisition, the company remained confident in its ability to revitalize the Sporting Index brand.
For Spreadex, the forced divestiture marks a significant strategic setback. However, it also opens the door for new players to reshape the market. This development should be good news for consumers as it should reestablish competitive pressure, ensuring better service and pricing in this highly specialized betting niche.
