Spreadex must sell Sporting Index, UK competition watchdog concludes
The CMA has concluded that Spreadex’s acquisition created a monopoly, affecting competition in the spread betting market.
UK.- The UK Competition and Markets Authority (CMA) has concluded that Spreadex must sell Sporting Index. It said the acquisition agreed last year created a monopoly, impacting on market competition. Back in July, the regulator had cited “provisional competition concerns” about the deal.
Spreadex, already the UK’s biggest spread betting operator, bought the B2C division of Sporting Index from Sporting Group Holding last year. Sporting Index was its only competitor in spread betting.
The CMA began the first phase of its investigation in February and a second more detailed phase in April. The CMA said yesterday (Monday) that this investigation found the deal created a monopoly by effectively eliminating Spreadex’s competition in the spread betting sector (Spreadex also operates financial spread betting and online casino games).
An independent panel concluded that this could lead to an inferior user experience, a more limited range of products and increased prices for customers. The panel took submissions and responses to its requisitions for information requests from both parties as well as La Française des Jeux, which owns Sporting Group, and a number of third parties.
The CMA said: “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.”
Richard Feasey, the panel’s chair, said: “This deal eliminates competition in the supply of licensed online sports spread betting in the UK. 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 regulator has 12 weeks to accept undertakings from Spreadex or make an order demanding that Spreadex sell Sporting Index to an approved buyer. The CMA said it would closely monitor progress on the proposed sale. The news comes after Spreadex renewed its sponsorship deal with Sunderland AFC, allowing non-branded shirts.
