Spreadex Forced to End Sporting Index Merger Following CMA Decision
Competition and Markets Authority Blocks Spreadex’s Control of Sporting Index
The UK’s Competition and Markets Authority (CMA) has upheld its previous ruling that Spreadex’s attempt to control Sporting Index’s consumer operations would reduce competition in the sports spread betting market. As a result, Sporting Index must be sold to another buyer to prevent Spreadex from monopolizing this sector.
End of a Prolonged Dispute Over the Merger
In a recent decision, the CMA reiterated that the merger between Spreadex and Sporting Index would significantly diminish competition in the UK sports spread betting industry. This would leave Spreadex as the sole dominant licensed operator, which an independent CMA panel warned could result in reduced product choice, higher prices, and a poorer overall user experience for consumers.
The authority stated that the acquisition either has led to, or is expected to lead to, a substantial decrease in competition within the licensed online sports spread betting market.
This ruling seemingly concludes a dispute that has lasted over two years. Spreadex acquired the consumer-facing part of Sporting Index from Sporting Group in 2023, effectively merging the only two spread betting providers in the UK into a single entity. Late last year, the CMA ruled that this consolidation would harm competition and ordered Spreadex to sell the consumer business.
Unhappy with this decision, Spreadex appealed to the Competition Appeal Tribunal (CAT), which in turn asked the CMA to reassess the acquisition. However, after reconsideration, the CMA reaffirmed its original concerns, noting that Spreadex’s arguments failed to demonstrate that the merger would not create a monopoly.
Sporting Index Must Be Sold to a New Operator
Spreadex expressed disappointment with the CMA’s verdict, arguing that the decision overlooks the commercial challenges faced by the sector, including rising compliance costs and declining customer demand. The company also questioned whether any other buyer would be able to run Sporting Index profitably as an independent business.
Despite these objections, the CMA has mandated that Spreadex divest Sporting Index’s consumer division either through an agreed sale or a forced sale to a CMA-approved buyer. This divestment process is expected to begin in the coming months. Industry insiders suggest that independent bookmaker Star Sports may have an interest in acquiring Sporting Index, though no official bid has been made.
Whoever eventually acquires Sporting Index will confront a difficult market environment. Sports spread betting remains a niche segment compared to fixed-odds betting, and tighter regulations have compressed profit margins industry-wide. While Spreadex hoped that the merger would streamline operations and sustain the sector in the UK, the future of sports spread betting now remains uncertain.
