An independent panel has provisionally concluded that a merger between Spreadex and Sporting Index would significantly hurt competition in the spread betting sector. [Image: Shutterstock.com]
Raises serious questions
An independent panel has provisionally concluded that a merger between the two biggest spread betting operators in the UK would be detrimental to competition. Spreadex announced in November that it was planning to take over its main rival Sporting Index for an undisclosed sum.
the commencement of an assessment in February
This led to questions over the fairness of such a deal and the commencement of an assessment in February by the Competition and Markets Authority (CMA), with the results made public on Thursday.
Impact on consumers
While the merger relates to both spread betting and fixed odds sports betting, the probe focused on the spread betting side since these companies are the only operators in the space.
The first phase of the investigation focused on the chances of the deal substantially lessening competition and the second phase analyzed the concerns in a more in-depth manner.
The panel looked at all available evidence and concluded that the merger would mean there would be no competition in the space. This would have a knock-on impact, limiting consumers to a smaller range of products, higher prices, and a poorer user experience.
Possible solutions
The panel is considering steps that could mitigate some of these concerns, such as Spreadex selling certain Sporting Index assets or some of its own assets.
Leading the investigation, panel chair Richard Feasey shared the view that Spreadex “would need to divest sufficient assets to allow a purchaser to operate a rival licensed spread betting business on a standalone basis.”
CMA will accept feedback on its remedy proposals until August 8
The CMA will accept feedback on its remedy proposals until August 8 and its provisional findings until August 15. The final report has a deadline of November 26.
