Spreadex-Sporting Index merger in jeopardy after watchdog's independent panel raises 'serious competition concerns'

An independent panel has raised “serious competition concerns” after reviewing Spreadex’s purchase of rival spread betting brand Sporting Index from French gambling giant Francaise des Jeux (FDJ) last year.

Possible remedies stated by the panel include Spreadex selling a business made up of all or some of the Sporting Index assets it acquired in the merger to a Competition and Markets Authority-approved (CMA) purchaser.

The inclusion of Spreadex assets in a potential sale was also raised, with the panel deeming the sale of solely Sporting Index assets as “unlikely to be sufficient”.

The deal between Spreadex and FDJ was completed in November but the CMA in April warned it would launch an in-depth investigation into the merger unless its concerns were addressed.

Its secondary investigation, which followed an initial merger inquiry in January, provisionally found the merger to have substantially lessened – or potentially will substantially lessen – competition in online sports spread betting services.

The panel also raised concerns over the potential for a worse user experience, a more limited range of products and higher prices than would otherwise have been the case before the merger.

Richard Feasey, the chair of the independent panel reviewing the merger, said: “Having assessed this deal, our provisional conclusion is that it raises serious competition concerns in the licensed online sports spread betting market. It would remove the only other licensed provider of sports spread betting in the UK and could lead to a worse user experience for consumers.

“We will now be considering how best to remedy this lessening of competition. Given that Spreadex has already acquired certain Sporting Index assets, our initial view is that Spreadex would need to divest sufficient assets to allow a purchaser to operate a rival licensed spread betting business on a standalone basis.”

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