Spreadex, a prominent spread betting firm, has formally appealed the Competition and Markets Authority (CMA)’s decision to divest Sporting Index. This move signals Spreadex’s intent to defend its investment and maintain its prospects in the UK sports spread betting market.
Concerns Raised by CMA
In November 2024, the CMA concluded that Spreadex’s acquisition of Sporting Index created a monopoly, significantly impacting fair competition. The CMA expressed concerns that this consolidation could limit consumer choice, stifle innovation, and degrade customer service quality. Moreover, reduced competitive pressure could lead to higher prices for consumers.
Following the investigation, the CMA issued a 12-week deadline for Spreadex to submit a divestiture plan for Sporting Index. If Spreadex fails to comply, the CMA will mandate a sale. Any potential buyer of Sporting Index must gain CMA approval to restore fair and competitive market conditions.
Spreadex’s Stance
Spreadex has strongly opposed the CMA’s decision, calling it “entirely disproportionate.” The company argued that Sporting Index was a “failing firm” at the time of acquisition and that its intervention had improved Sporting Index’s financial position, benefiting consumers. According to Spreadex, a divestment order would invalidate their substantial investments in the brand.
Appeal to Competition Appeal Tribunal
Spreadex has appealed to the Competition Appeal Tribunal (CAT), contesting the CMA’s findings on two primary grounds. First, the company alleges that the CMA denied access to crucial third-party evidence, which was necessary for a fair evaluation. Second, Spreadex disputes the CMA’s claim that other bidders would have acquired and operated Sporting Index in direct competition with Spreadex, calling this conclusion “irrational” and “not properly justified by the evidence.”
Spreadex seeks to have the CMA’s decision overturned and the matter reconsidered by the regulator.
Star Racing’s Interest
Star Racing, a potential buyer for Sporting Index, has expressed interest in purchasing the brand if the divestment proceeds. However, Star Racing acknowledges the difficulties in integrating and revitalizing the business. The company’s decision will hinge on the CAT’s judgment regarding Spreadex’s appeal.
The Tribunal is now considering whether the CMA’s decision was legally sound and will ultimately determine the future of Sporting Index in the UK’s sports spread betting market.
