Spreadex ordered to sell Sporting Index after ‘creating monopoly’
Spreadex has been ordered to sell Sporting Index after it was ruled that the acquisition had created a monopoly.
The Competition and Markets Authority (CMA) has told Spreadex to dispose of the ‘business-to-consumer’ firm after it snapped it up from Sporting Group last year.
Spreadex and Sporting Index both provide sports fixed odds betting and sports spread betting services to customers based in the UK.
However, the CMA has said an independent panel has concluded the deal “created a monopoly” in the UK licensed online sports spread betting market, “eliminating competition in that market”.
The panel also concluded that the merger “could lead to a worse user experience, a more limited range of products and/or higher prices for consumers in the UK”.
Richard Feasey, the chair of the independent panel reviewing the merger, 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.”
Speadex ‘strongly disagrees with disproportionate decision’
A Spreadex spokesman said: “Spreadex note the CMA’s decision. We’ve co-operated and engaged positively with the CMA throughout the review and recognise the importance of the CMA’s role in protecting and promoting competition in the UK economy.
“However, we strongly disagree with this entirely disproportionate decision, and we are reviewing all available options.
“As part of the UK sports betting market, Spreadex faces significant ongoing competitive pressure from leading firms and continues to enhance and invest in its spread betting services as a result.
“Sporting Index was a failing firm, and its customers have greatly benefited from Spreadex’s infrastructure, resources, improved services, and increased oversight since the acquisition.
“The level of public resources, time and money spent on this review, feels wholly disproportionate to the benefits it is purported to provide either the UK economy or consumers, given the immaterial size of both the transaction and the sub-section of the UK sports betting market it impacted.”
The announcement comes after Morning Wire revealed that a significant move into sponsorship of Championship football teams had helped turnover at Spreadex surge during its latest financial year.
The business is a major sponsor of clubs such as Watford, Sheffield United, Sunderland and West Bromwich Albion.
Spreadex has reported a turnover of £103.2m for its financial year to 31 May, 2024, according to newly-filed documents with Companies House.
The latest total comes after the firm reported a turnover of £88.8m for its previous 12 months.
The new accounts also show that the company’s pre-tax profit grew from £35.3m to £42.2m over the same period.
Off the back of its improved financial performance, Spreadex increased its dividend from £12.5m to £15.8m.
The business, which is headquartered in St Albans, was founded by Jonathan Hufford in 1999.