The Competitions and Markets Authority (CMA) has ruled Spreadex must sell Sporting Index to address monopoly concerns the watchdog had found in the spread betting market.
The ruling came after the CMA launched its investigation in February following Spreadex’s acquisition of Sporting Index from La Française des Jeux (FDJ) in November 2023.
The watchdog stated it had found monopoly concerns and then asked for remedies to the situation, which were then made public in September.
The CMA’s remedies were either Spreadex selling all or part of Sporting Index, as well as potentially including existing Spreadex assets in any deal.
Spreadex provided its own remedy to the CMA, in which it said a total sale of Sporting Index would be an appropriate solution.
The CMA has provisionally agreed to Spreadex’s suggestion, subject to certain “modifications and enhancements”.
The Spreadex remedy consisted of three main points:
To divest its shares in the Sporting Index legal entity, including all assets it had acquired
To develop a “bespoke sports spread betting platform” which would be used by the acquirer
To provide the acquirer with a transitional services package while the purchaser makes investments into required personnel and functions to operate the Sporting Index business
In effect, Spreadex will divest all IP and web domains, source code, Sporting Index’s customer live, the five current employees who transferred over from FDJ, licences and tax losses and trade debtors.
The monopoly watchdog said it had held an “extensive consultation”, which also included third parties, as it said the remedy would be “effective and proportionate”.
The CMA now has 12 weeks to accept final undertakings from Spreadex, or make a final order that will require the firm to sell Sporting Index to a CMA-approved buyer.
The 12-week period can be extended by up to six weeks should there be a specific or “special” reason to do so.
Both Star Sports and 10star have expressed an interest in acquiring Sporting Index, although the CMA said it is yet to be seen if the package would be of interest to the parties.
However, the CMA said Star Sports and 10star’s preferences for a deal, which include bringing more staff over from Spreadex, would not be a sufficient factor in itself to make a divestment unfeasible.
The CMA noted 10star said the proposal was “sound in theory” while Star Sports added it was “very reasonable”, but further information would be required to understand how the divestment would work in practice.
Richard Feasey, the CMA’s independent panel chair, said: “This deal eliminates competition in the supply of licensed online sports spread betting services in the UK.
“Sports spread betting – like any other market – needs competition to drive good customer experience, maintain choice and keep prices competitive.
“To achieve this, we have decided that Spreadex should sell Sporting Index, so that customers can choose between two firms for the best user experience and prices, rather than having to use only one.”
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