Spreadex Ordered to Divest Sporting Index
The UK Competition and Markets Authority (CMA) has ruled that Spreadex must divest its Sporting Index business, citing concerns over reduced competition in the online sports spread betting market. This decision follows an in-depth investigation into the implications of the 2022 merger.
Merger Raises Competition Concerns
The CMA’s investigation found that Spreadex’s acquisition of Sporting Index significantly reduced competition in a sector already characterized by limited players. This consolidation, the CMA argued, could harm consumers by reducing their options, driving up prices, and stifling innovation in the sports spread betting market.
Richard Feasey, chair of the CMA’s independent panel, emphasized the importance of competition in ensuring quality and fair pricing for consumers. He noted that monopolistic conditions weaken incentives for companies to improve their services, potentially leading to a decline in customer satisfaction and market innovation.
Timeline for Compliance
Spreadex, established in 1999, has built a strong reputation in sports and financial spread betting. The acquisition of Sporting Index in 2022 was a strategic move to bolster its market position. However, the CMA concluded that this merger tipped the balance too far, creating a near-monopoly in the licensed sports spread betting sector.
The CMA has given Spreadex 12 weeks to outline and finalize the divestment process for Sporting Index. If the company fails to comply, the CMA will enforce a formal order requiring the sale. Additionally, any prospective buyer must be vetted and approved by the CMA to ensure they can restore competition and operate effectively in the market.
