The very real popularity of fantasy sports

The United Kingdom’s Competition and Markets Authority (CMA) has launched a comprehensive investigation into the acquisition of Sporting Index by Spreadex, both of which are major players in the sports-betting industry. This move comes after Spreadex declined to address the regulator’s concerns about the deal.

The acquisition and its implications

Spreadex, a leading sports spread-betting firm, acquired its rival Sporting Index from the French gambling giant Francaise des Jeux. The details of the acquisition, which was completed last year, have not been disclosed.. However, the deal has raised eyebrows in the regulatory community due to its potential implications for competition in the UK sports spread-betting market.

The CMA’s initial investigation (Phase 1) found that the deal could potentially create a monopoly in the UK sports spread-betting market. This is because Sporting Index and Spreadex are the only two licensed operators of sports spread betting in the UK. The removal of Sporting Index from the market could therefore leave Spreadex as the sole provider, raising concerns about reduced competition,

Regulatory scrutiny and need for remedies

Regulators in the UK and across the Atlantic have been increasing their scrutiny of acquisitions, particularly those involving companies with access to large volumes of user data. Such deals are typically approved only after the companies involved offer remedies to address any competition concerns.

In this case, the CMA gave Spreadex and Sporting Index five working days from 4 April to propose meaningful solutions to the concerns raised. However, Spreadex stated that it would not be submitting any undertakings to address these concerns.

In response to the CMA’s decision to launch a Phase 2 investigation, Spreadex has stated that it will continue to assist and cooperate with the ongoing review. Sporting Index, on the other hand, has not yet responded to requests for comment.

The outcome of the CMA’s in-depth investigation into the Spreadex-Sporting Index deal will be closely watched by industry stakeholders and regulators alike. It serves as a reminder of the importance of competition in the marketplace and the role of regulatory bodies in ensuring that acquisitions do not lead to monopolies or reduced competition. This situation highlights the importance of businesses actively and openly addressing any issues raised by regulators.

recently published structural business statistics (SBS) data for the arts, entertainment, and recreation sector for the first time. The document includes information about the gaming and betting activities in the European Union (EU), including the operation of casinos, bingo halls, and video gaming terminals, as well as the provision of gaming services such as lotteries and off-track betting for the year 2021.

The share of the value added of gaming and betting activities for the sector varied strongly among EU countries, with the EU average estimated around 38%. The lowest value was registered in the Netherlands (11 %) and the highest in Malta (98 %). In Malta, gaming and betting activities generated over 16 % of the value added of the whole business economy, while in most EU countries (except Greece (1.0 %), Hungary (1.9 %) and Slovakia (3.6 %)) this share was below 1 %.

Despite the high turnover, a relatively low number of enterprises operated in the gaming subsector, specifically 38,200 out of a total of 894,000 for the whole sector. Gaming employed 360,000 persons, accounting for 17.5% of the sector’s employment.

Another significant statistic, which attests to the importance of the gaming industry in the EU is that out of a total €210 billion net turnover for the whole arts, entertainment, and recreation sector, more than half, specifically, €110 billion, was generated by the gaming industry.

The arts, entertainment and recreation sector included a wide range of activities to meet varied cultural, entertainment and recreational interests of the general public, including live performances, operation of museum sites, gaming, sports and recreation activities.

The Dutch courts have made a groundbreaking ruling that could potentially reshape the landscape of the online gambling industry. The Overijssel District Court decreed that Flutter Entertainment and Entain, two prominent players in the industry, must reimburse all losses incurred by two of their players during the grey market era.

The lawsuits were brought against Flutter-owned PokerStars and Entain’s Bwin by the players’ legal representatives. The crux of their argument was that these companies were operating without a license in the Netherlands’ grey market prior to the regulated market’s inception in April 2021, thereby violating Dutch law.

Interestingly, neither of these subsidiaries are currently active in the market. However, Entain is licensed and operates in the Netherlands through its BetCity brand.

According to reports first published by Casino Niuews, the player involved in the Bwin lawsuit is to be repaid €187,622 plus interest. This sum accounts for bets placed between January 2018 and November 2019. In the second case, Flutter is required to repay the customer $230,705 and €400 plus interest for gambling activities conducted between 2006 and 2021.

These cases are not isolated incidents but part of a broader European trend where gambling businesses are being ordered to return player losses for unlicensed betting activities. Lawyers have successfully brought similar cases forward in Germany, Austria, and the Netherlands. While many operators have chosen to comply with the court orders, others, notably 888, have continued to fight.

In response to these legal challenges, operators often rely on European free movement of services rules as legal cover for their European grey market operations. Last year, Malta passed a law, commonly referred to as Bill 55, which aimed to shield operators from legal liability resulting from their MGA-licensed activities.

However, Bill 55 has proven to be controversial. Some, including Germany’s gambling regulator the GGL, argue that it is incompatible with European law. In July 2023, the European Commission announced that it would scrutinise the law and requested additional information from the Maltese authorities.

Historically, the Court of Justice of the European Union has been the final authority on disputes between national and supranational law. As such, the outcome of this scrutiny could have far-reaching implications for the future of the online gambling industry.

In a brief conversation with Sigma News this week, offered his candid views on the future of compliance and anti-money laundering (AML) in the sector. His outlook, while seemingly somewhat bleak, paints a realistic picture of the hurdles that lie ahead.

Cachia (pictured above), has been observing an unsettling trend in global gambling regulations. He argues that, often demanding commercially sensitive data from operators without explicit goals. This overregulation, he cautions, is resulting in unnecessary red tape and protracted approval times.

Furthermore, Cachia has noticed a change in the stance of some regulators, who are becoming more aloof rather than cooperative. He contends that this shift is harmful to an industry that heavily depends on speed.

However, it’s not all negative. Cachia highlights that these challenges are paving the way for new jurisdictions to set up their own offshore regimes. Despite their lack of infrastructure to support such a complex industry, these jurisdictions could potentially emerge as alternatives to the current reputable ones.

On the subject of AML, Cachia anticipates that business-to-business (B2B) entities, which are presently outside the purview of AML laws, will gradually be mandated to provide some form of reporting. He points to as an example, which already has reporting obligations with the He foresees this trend becoming increasingly prevalent among European regulators.

When probed about his advice for other firms in the gaming industry, Cachia points out the significance of investing in robust compliance and responsible gaming functions. He recommends companies to incorporate these functions into major business decisions, as this can help avert expensive errors and uncover overlooked opportunities.

Cachia also urges companies to keep the lines of communication open with all regulators and not to hesitate from expressing their views on the directions a regulator is taking. He is of the opinion that most regulators value this honesty.

Ultimately, Cachia says that the need for continuous testing of business operations for non-compliances and reporting any identified non-compliances to the relevant regulators promptly and transparently. He assures that the consequences of self-reporting often outweigh those of a regulator uncovering non-compliances through other means.

The future of gaming compliance may indeed seem challenging. However, these insights are a useful guidance for manoeuvring through this evolving landscape. Strategic planning and proactive management are a necessity to effectively handle regulatory changes and promote responsible gaming in the industry. Cachia's views and experience in the field are a valuable resource for those working their way through the complexities of gaming compliance.

SiGMA News spoke with Jake Cachia, Compliance and AML Manager at EveryMatrix. He is former Compliance Manager at the Malta Gaming Authority.

You may wish to read a more comprehensive interview with Jake Cachia,