IG Group, the owner of the sports spread betting company Extrabet, has stated it is closing its sports spread betting business and focus solely on the financial part.

In the trading update statement for the year ended 31 May 2011, IG reported that its Extrabet business is now representing just a little more than 2% of the group revenues. The fixed cost structure of Extrabet make its profits contribute to even less than 2%.

To focus on its financial business, the group directors decided that an investigation should be made in order to evaluate selling possibilities or to close the business. After conducting the necessary steps to investigate the possibilities, the group considers that it is not possible to proceed with a sale of the whole Extrabet business in acceptable terms such that it is writing-off the sports business goodwill of £5.25m and will incur in an additional expense of £2.5m to cover potential redundancy and lease-related costs.

IG reached an agreement with Spreadex regarding the client base of Extrabet. The sports spread betting and fixed odds clients will be merged into Spreadex’s by June 23. Jonathan Hufford, Managing Director at Spreadex, commented: “We see this as a significant step forwards and warmly welcome the Extrabet customer base to the Spreadex fold… With 12 years of sports spread betting experience behind us, we’re sure the thousands of new clients will appreciate the ease of use of our award-winning sports betting platform and enjoy the high standards of customer service for which we have become known.”

The agreed terms state that Spreadex will make IG semi-annual payments for the next three years, calculated by reference to the revenue it generates from the acquired clients.

In the meantime, after the announcement of the closure of Extrabet, the rival Sporting Index started an offer of £200 to all Extrabet clients that open an account at Sporting Index. A spokesman for Sporting Index, said: “We’re sorry to see another rival sports spread betting company fall by the wayside… We’d like to urge all Extrabet clients to hop on board with us and experience first-hand our superior service. We’re so confident you’ll enjoy betting with Sporting Index that we’ll even give you £200 as a welcome gift!”