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In a potentially significant development for the UK betting landscape, Star Racing, a division of Star Sports, has announced it is looking to acquire Sporting Index from the bookmaker Spreadex. This move comes in response to the ongoing investigation by the UK’s Competition and Markets Authority (CMA) into the merger between Spreadex and Sporting Index due to concerns that such a move would be anti-competitive.
The Regulator Has Outlined Several Avenues
Star Sports’ proposal follows findings by the CMA that the merger between Spreadex and Sporting Index could significantly lessen competition in the sector. The CMA has recommended the sale of assets as a remedy. Star Sports has now positioned itself as a potential buyer, presenting an opportunity to maintain market diversity and customer choice.
The Spreadex-Sporting Index merger, first announced in November 2023, quickly drew the regulator’s attention due to its broader market implications. The CMA feared such a move would create a monopoly in the sports spread betting sector and launched a detailed investigation, fearing potential adverse effects on competition, product diversity, and user experience.
The CMA outlined two avenues to resolve these issues, urging Spreadex to either embark on a more substantial merger or a divestiture package containing key Sporting Index assets. While Spreadex laid out its views on a potential divestiture, the company protested the CMA’s decision and remains apprehensive regarding Star’s newest proposal.
A Competitive Market Will Benefit All Stakeholders
Star Sports announced that it would welcome Sporting Index’s assets to its existing operations, leveraging its experience in spread betting and fixed-odds sports betting to re-establish Sporting Index as a strong competitor. However, the operator noted that Sporting Index’s asset portfolio had suffered significant degradation due to the layoffs of much of its workforce and potential damage to its brand.
We have assets of our own that we could integrate into Sporting Index, assisting in creating a more potent and viable competitor.
Star Sports statement
Despite these assurances, Spreadex was concerned that two leading suppliers of online sports spread betting services utilizing the same basic technology could stifle innovation in the sector. Instead, Spreadex suggested a limited divestment of Sporting Index’s assets and a Transitional Service Agreement (TSA), allowing a potential buyer to temporarily rely on Spreadex’s infrastructure as it develops its operational capacity.
The ongoing CMA investigation could have substantial long-term implications. If the regulator approves Star Sports’ bid, the operator could significantly grow its presence in the UK betting market. As the CMA navigates potential solutions, this evolving situation highlights the delicate balance the regulator has to strike between ensuring competition, protecting consumers, and fostering innovation.
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