UK competition watchdog investigation into Spreadex-Sporting Index deal
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 raised1. 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.
