The demise of the Football Index has prompted the U.K to order an independent review, as well as an assessment of the Gambling Commission’s regulatory actions in this area.
The Football Index offered participants the opportunity to buy shares of active players and shareholders received dividends and other payments depending on the player’s success. Football Index sold itself as a “football stock market” where users purchased or sold shares like selling shares of stocks. In addition to share prices, participants received dividends for a player success and even the media buzz surrounding a player.
The review will look into the collapse in March and see if there are any lessons to be gleaned for the future. But come March 5, the company cut dividends to sustain the program. Share values plummeted. The Gambling Commission suspended its license.
The findings will be published in the summer and used as part of the review of the 2005 Gambling Act underway, according to SBCNews.
“It is reported that many thousands of customers are affected by the product’s collapse, with some having lost very large sums,” said John Whittingdale, secretary of state for Digital, Culture, Media and Sport told the Athletic. “We know how difficult it has been for people affected by the collapse of Football Index with some losing significant sums of money.”
Meanwhile, Football Index customers want compensation. The parent company, BetIndex, will accept claims by month’s end. A separate inquiry will be made into BetIndex.
The industry trade group, Betting and Gaming Council, supports the investigation.
As early as 2020 reports circulated that the Football Index was really just a pyramid scheme.
The review will examine the “decisions and actions of the Gambling Commission and any other relevant regulators, to provide a clear account of how the company’s activities were regulated, and identify if there are potential areas for improvement in how complex products are treated”.
“It’s clear the government thinks there are questions for the Gambling Commission as they’ve taken this inquiry out of their hands,” says Matt Zarb-Cousin of Clean Up Gambling. “Hopefully this will lead to some redress for Football Index users, as well as recommendations for more rigorous gambling regulation on things like financial probity of operators.”
The review will consider possible regulatory changes. “It is also looking at how novel and complex products should be licensed and regulated,” Whittingdale said.
