The Competition and Markets Authority (CMA) is investigating the merger between spread betting groups, Spreadex and Sporting Index, over concerns the deal could harm competition in the UK spread betting market.

Spreadex acquired the business-to-consumer arm of Sporting Index from Sporting Group last year.

Both Spreadex and Sporting Index provide online fixed odds betting services and online sports spread betting services to customers based in the UK.

Sports spread betting involves betting above or below a range of outcomes, rather than standard win or lose outcomes offered by fixed-odds betting. The more “correct” a customer is, the more money they stand to win, and the more “wrong” they are the more they stand to lose.

The CMA launched an initial phase one investigation into the deal in February, which focused on the online sports spread betting market where Spreadex and Sporting Index are the only licensed providers in the UK.

According to the competition regulator, the deal may have created a “monopoly” by removing the only other licensed UK sports spread betting provider, and could “substantially lessen competition” in the supply of licensed online sports spread betting services in the UK.

Spreadex and Sporting Index have suggested they would be constrained by fixed odds betting providers after the merger, but the CMA said it has not received enough evidence to support this.

Phase one decision maker for the case at the CMA, Naomi Burgoyne, said: “We believe that this deal could remove competition for sports spread betting services and give Spreadex a monopoly in this market. It is important that customers can rely on competition in the market to keep odds competitive.

“Spreadex now has five working days to resolve our concerns. If they are unable to do so, the merger will be referred to a more in-depth investigation.”

Should Spreadex and Sporting Index fail to respond with meaningful solutions to the CMA within five working days, the CMA will refer the deal to a more in-depth phase two investigation.

---