A UK watchdog has found gambling firm Spreadex’s takeover of rival spread betting firm Sporting Index created a monopoly in the market by eliminating its “only competitor”.
The Competition and Markets Authority (CMA) said Spreadex must sell Sporting Index following a fresh review of the deal.
A spokesman for Spreadex said it disagreed with the “entirely disproportionate” decision regarding its acquisition of a “failing firm”.
The CMA found that having a monopoly in the market could lead to a worse experience for users, a more limited range of products, and higher prices for consumers.
The acquisition, which took place in 2023, reduces the number of specialist betting firms from two to one, the regulator said.
Richard Feasey, chairman of the independent panel reviewing the merger, said: “We found that the merger substantially lessens competition by removing Spreadex’s only competitor in the sports spread betting market in the UK.
“We also found that the only effective remedy would be for Spreadex to sell Sporting Index to restore competition in the supply of licensed online sports spread betting in the UK.
“Doing so would mean customers in the UK have greater choice between two independent businesses, rather than one.”
Sports spread betting involves betting on a range of outcomes for a sports event, rather than fixed-odds bets which involve a standard “win or lose” scenario.
The closer a bet is to an outcome, the more money a consumer can win. But it also means it is possible for consumers to lose more than their initial stake.
The CMA launched a fresh investigation into the deal after Spreadex appealed its decision to the Competition Appeal Tribunal in March.
A panel had found last year that the deal harmed competition in the market and that a sale should take place.
Following Friday’s final report, Spreadex can now assure the regulator that it will sell Sporting Index, or the CMA could order the sale to a buyer that it approves of.
A spokesman for Spreadex said it was “extremely disappointed” in the CMA’s decision.
It said: “We have co-operated and engaged positively with the CMA throughout what has now been a 20-month review period into an immaterial transaction involving a failing firm serving a very small number of customers in a tiny sub-section of the UK sports betting market.”
Spreadex said it recognised the “importance of the CMA’s role in protecting and promoting competition in the UK economy” but that it believed the review was “wholly disproportionate to the benefits it is purported to provide either the UK economy or consumers”.
“Sporting Index’s customers have greatly benefited from Spreadex’s infrastructure, resources, improved services, and increased oversight since the acquisition,” it said.
“Spreadex strongly disagrees with this entirely disproportionate decision and are reviewing all available options.”
