British watchdog warns of second probe into Spreadex – Sporting Index merger
The Competitions and Markets Authority has warned that the deal may reduce competition.
UK.- The UK Competitions and Markets Authority (CMA) has demanded “meaningful solutions” to avoid a further investigation into the Spreadex and Sporting Index merger. The competition watchdog announced an initial phase one investigation last month and has concluded that the deal may reduce competition.
Spreadex reached an agreement to buy Sporting Index’s B2C arm from Sporting Group Holding last year. Both companies offer online fixed odds betting and spread betting in the UK, while Spreadex also provides financial spread betting and casino gaming.
The CMA noted that Spreadex and Sporting Index are the UK’s only licensed sports spread betting providers in the UK, which means that the merger may have created a monopoly. Spreadex and Sporting Index claim they compete with fixed-odds betting providers, but the CMA sees insufficient evidence of this. It’s given the companies five working days to respond with “meaningful solutions” otherwise they will face a more in-depth Phase 2 investigation.
It said: “The CMA believes the merger could substantially lessen competition in the supply of licensed online sports spread betting services in the UK, Without a competitor, the incentive for Spreadex to offer competitive odds for customers could be lost.”
Spreadex faced regulatory enforcement action from the British Gambling Commission in 2022, when it was issued with a £1.36m penalty fee for a series of social responsibility and anti-money laundering failings. The regulator found that the operator had used ineffective financial alerts to identify customers at risk of harm and allowed customers to lose “significant amounts” of money over a short period of time.
