Spreadex Challenges CMA’s Stance on Sporting Index Merger

Spreadex is standing firm against the UK Competition and Markets Authority’s scrutiny over its acquisition of Sporting Index’s consumer business. The company insists that the regulator’s proposed solutions are based on outdated views and do not reflect the current challenges of a market where many operators face extremely tight profit margins.

A Challenging Market Environment Questions the CMA’s Approach

In recent official statements, Spreadex rejected the CMA’s provisional conclusion that the merger could significantly reduce competition in the UK’s sports spread betting sector. The regulator had suggested that Spreadex should sell Sporting Index’s consumer arm to a competitor. Spreadex criticized this proposal, describing it as both unrealistic and disproportionate.

The operator highlighted the difficult market conditions, emphasizing the limited availability of true alternatives when the deal was made. Increasing regulatory pressures and taxation are impacting the industry broadly, fueling a decline in customer demand and squeezing the number of market participants. Additionally, wider economic uncertainties increase the risks for operators willing to invest aggressively in this area.

Ongoing regulatory and fiscal changes are worsening the prospects for companies offering sports betting services.

Spreadex statement

Spreadex maintained that expecting another company to emerge as a viable competitor within a short timeframe – as envisioned by the CMA – is not practical. Even if a new bidder were found, there is no certainty that the Sporting Index brand could thrive independently.

Spreadex Calls on Regulator to Reassess Its Decision

The CMA initially blocked the merger due to concerns over reduced competition. Following a court appeal that returned the case to the Competition Appeal Tribunal, the CMA was instructed to reexamine its verdict. However, its renewed assessment upheld the initial objections and proposed a sale of the acquired assets by Spreadex.

Spreadex argues that the regulator’s demand effectively requires it to rebuild a competitor from the very business it has already integrated. The company considers this approach impractical and claims it disregards their efforts to sustain the Sporting Index brand. Spreadex further points out that the CMA appears to be neglecting the competitive threat posed by unlicensed offshore operators, which continue to challenge the regulated market sector.

The CMA’s preliminary conclusions overlook the significant impact of unlicensed sports spread betting providers.

Spreadex statement

Describing the CMA’s remedy as burdensome and misaligned with industry realities, Spreadex warns that enforcing the sale of assets now would likely cause more damage than benefit. The company urges the regulator to reconsider its stance, taking into account proportionality and actual market conditions. As the final ruling approaches, the ultimate outcome of this merger remains uncertain.