The deal seeks to combine the only 2 licensed sports spread
betting operators in the UK market.
From:
Competition and Markets
Authority
Last year, Spreadex acquired the ‘business to consumer' arm of
Sporting Index from Sporting Group Holding Limited (Sporting
Group). Spreadex and Sporting Index provide both online fixed
odds betting services and online sports spread betting services
to customers based in the UK. Spreadex is also active in
financial spread betting and casino betting.
Sports spread betting involves betting above or below a range of
outcomes rather than standard ‘win or lose' outcomes offered by
fixed-odds betting. The more ‘correct' a customer is, the more
money they stand to win, and the more ‘wrong' they are the more
they stand to lose.
The Competition and Market Authority's (CMA) Phase 1
investigation focused on the online sports spread betting market,
where Spreadex and Sporting Index are the only licensed providers
in the UK.
The CMA found that the deal may have created a monopoly by
removing the only other licensed UK sports spread betting
provider. As part of the investigation, Spreadex and Sporting
Index suggested they would be constrained by fixed odds betting
providers after the merger, but the CMA has not received
sufficient evidence to support this.
Having assessed the evidence, 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.
Naomi Burgoyne, Phase 1 decision maker for this case at the CMA,
said:
We believe that this deal could remove competition for sports
spread betting services and give Spreadex a monopoly in this
market. It is important that customers can rely on competition in
the market to keep odds competitive.
Spreadex now has 5 working days to resolve our concerns. If they
are unable to do so, the merger will be referred to a more
in-depth investigation.
Both Spreadex and Sporting Index now have 5 working days to
respond with meaningful solutions to the CMA, otherwise the deal
will be referred to a more in-depth Phase 2 investigation.
More information can be found on the Spreadex / Sporting Index
case page.
