Football Index: what happened to the sporting stock market gambling site - will government compensate players?
Football Index was a platform that allowed customers to bet on how well football players would perform in the future
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It left about 280,000 consumers with a £3.2 million loss.
Here is everything you need to know about it.
What was Football Index?
Football Index was a gambling site that allowed consumers to wager on the future performance of football players.
Customers bought imaginary shares in the hopes of winning daily payouts based on player performance on match days and their position in the site's Media Rankings, which paid out on the top trending footballers each day.
It was launched in 2015, and over £321 million was traded on the platform during the 2018/2019 football season, with over £4.3 million in dividends given out to traders.
Changes were announced in March 2021, which lowered the value of all open bets, sparking outrage among users who saw their portfolio values plummet from 50% - 90%.
Football Index halted trading on its platform shortly after, and its parent firm went bankrupt within hours.
Its licences were suspended by both the UK Gambling Commission and the Jersey Gambling Commission, and trading on the platform was immediately halted.
The company was not a Ponzi scheme, according to the Gambling Commission, because it "did not need to rely on new customers to meet its obligations."
Football Index “drastically changed its financial position without any notification to the Commission” in 2020, according to a report, and “when the Commission became aware, it was, in hindsight, too late to prevent the losses customers then experienced”.
What has Nigel Huddleston said?
Sports Minister Nigel Huddleston has said the Government should not use public funds to compensate for losses caused by the failure of the gambling company.
Huddleston said: “Administration proceedings continue, which may result in some money being refunded to customers.”
He added: “We do not think it would be appropriate for the Government to use public funds to cover losses to individuals resulting from the collapse of a gambling company.
“And consumers staking money on gambling is not the same as placing money into other things such as savings products.
“And furthermore the Gambling Commission does not have any statutory powers which would enable it to offer redress for losses suffered as a result of a gambling operator collapsing.”
However, the FCA and Gambling Commission have acted on recommendations made by a Government-commissioned expert review to “ensure that a similar situation like this does not happen again”.
The Gambling Commission has changed how it analyses risk “so that novel products are properly considered” Huddleston said, and the two authorities are taking steps to improve their collaboration.
Huddleston went on: “Following information received from the administrators and the Gambling Commission, the Insolvency Service has confirmed that the conduct of BetIndex’s directors is being investigated by them.”
He added: “Be in no doubt of the seriousness with which the Government takes all the matters highlighted today, and the gambling review will indeed be announced in the coming weeks.”
Football Index ‘haven’t been held to account’
LondonWorld editor Ralph Blackburn joined Football Index in October 2020 after playing a few successful seasons of Fantasy Premier League.
Blackburn had seen multiple adverts for the platform - the company had sponsored several football teams - so thought he might be able to make some money from his love of the beautiful game.
“I did some research and it seemed like a lot of people had been playing for a while, and everything seemed legitimate,” he tells NationalWorld.
“I invested around £70, however some people had thousands of money tied up. The company went bust about five months later, but before then you’d have had no idea anything was wrong.”
Shortly before its collapse, Football Index players were still being “bombarded” with emails encouraging further investment, as well as messages from senior executives claiming the company was in good health.
Blackburn says it seemed as if it “was almost too easy to make money”, but he never thought the company would go bust as quickly as it did.
Since the platform went into administration, communication from the administrators has been very clear, according to Blackburn, “in stark contrast to that from Football Index.”
Users can only claim back money they had in their account, as opposed to money “invested” in players - which has been lost.
“I think there has to be some route for people who’ve lost a lot of money to reclaim it back,” Blackburn adds. “It seems like the Football Index management created a house of cards and haven’t been held to account as it came tumbling down.”