Spread Betting Deal Raises Competition Concerns

4th April 2024

The deal seeks to combine the only 2 licensed sports spread betting operators in the UK market.

Last year, Spreadex acquired the ‘business to consumer' arm of Sporting Index from Sporting Group Holding Limited (Sporting Group). Spreadex and Sporting Index provide both online fixed odds betting services and online sports spread betting services to customers based in the UK. Spreadex is also active in financial spread betting and casino betting.

Sports spread betting involves betting above or below a range of outcomes rather than standard ‘win or lose’ outcomes offered by fixed-odds betting. The more ‘correct’ a customer is, the more money they stand to win, and the more ‘wrong’ they are the more they stand to lose.

The Competition and Market Authority’s (CMA) Phase 1 investigation focused on the online sports spread betting market, where Spreadex and Sporting Index are the only licensed providers in the UK.

The CMA found that the deal may have created a monopoly by removing the only other licensed UK sports spread betting provider. As part of the investigation, Spreadex and Sporting Index suggested they would be constrained by fixed odds betting providers after the merger, but the CMA has not received sufficient evidence to support this.

Having assessed the evidence, the CMA believes the merger could substantially lessen competition in the supply of licensed online sports spread betting services in the UK. Without a competitor, the incentive for Spreadex to offer competitive odds for customers could be lost.

Naomi Burgoyne, Phase 1 decision maker for this case at the CMA, said:

We believe that this deal could remove competition for sports spread betting services and give Spreadex a monopoly in this market. It is important that customers can rely on competition in the market to keep odds competitive.

Spreadex now has 5 working days to resolve our concerns. If they are unable to do so, the merger will be referred to a more in-depth investigation.

Both Spreadex and Sporting Index now have 5 working days to respond with meaningful solutions to the CMA, otherwise the deal will be referred to a more in-depth Phase 2 investigation.

More information can be found on the Spreadex / Sporting Index case page.

The CMA launched its formal Phase 1 investigation in February 2024. This review is designed to identify whether the deal may lead to a ‘substantial lessening of competition’ - focusing on the potential impact on consumers and businesses in the UK – and therefore requires an in-depth, Phase 2 investigation. Phase 2 investigations last 24 weeks (extendable by up to 8 weeks in certain circumstances) and allow an independent panel of experts to probe in more depth initial concerns identified at Phase 1.

Sporting Group Holding Limited (Sporting Group) is a subsidiary of La Française des Jeux (FDJ). FDJ has retained ownership of Sporting Group which includes sports betting technology and trading service provider Sporting Solutions.

Sporting Index and Spreadex are the only 2 licensed operators of sports spread betting in the UK.