Punters in the U.K. reportedly forfeited up to more than £90 million (US$125 million) due to the collapse of gambling website Football Index.
The player trading platform claims it’s broke and unable to pay off its customers. A group of MPs have asked Culture Secretary Oliver Dowden for a public inquiry and also demanded answers from the U.K. Gambling Commission (UKGC).
In a letter to Dowden, MPs on the All-Party Parliamentary Group for Gambling Related Harm said Football Index customers may have lost £3,000 (US$4,176) each on average, though some lost far more.
“This can only be termed a scandal,” said Chairwoman Carolyn Harris. “It underlines the need for wholesale reform of the gambling industry and raises significant questions of the Gambling Commission, given they saw fit to license this platform and failed to enact adequate oversight.”
One gambler named Ben told the BBC that he lost close to £6,500 due to the shutdown. “I feel embarrassed and cheated,” he said. “The crash has affected me mentally.
“I’ll never trust Football Index again,” Ben continued. “I will go elsewhere and enjoy my love of football with other companies and probably bet in a more conventional way. But it will make me think twice before putting money into other companies. Everyone affected by this wants to say how disappointed they are with the leadership of Football Index.”
Football Index hit serious financial problems earlier this month. The company cut dividend payouts on players, kicking off a domino effect that caused a crash in their “share” price value.
The law firm Leigh Day is representing some of the losing players. Partner Nichola Marshall said, “Whilst it is very early days in our investigations on behalf of the thousands of people who have lost money, there are serious questions which will need answering regarding what has happened at Football Index and what the Gambling Commission understood of Football Index’s activities.”
Football Index, which launched in 2015 allowed users to buy what it called “shares” in professional footballers, then paid “dividends” based on player performances. The goal for users was to pinpoint rising stars, buy shares in them while at a bargain, then sell them later at a profit. Football Index called itself a “challenge to traditional bookmakers” and an alternative to the regular stock market which it said could “seem intimidating and inaccessible.”
But Matt Zarb-Cousin of the Clean Up Gambling campaign described a sort of pyramid model of business in describing the site: “Football Index ended up in a situation where they needed new customers to honor the dividend payments to existing users. It was a business run in an entirely unsustainable way, which people do not expect of a licensed operator in a regulated sector. The Gambling Commission has been asleep at the wheel.”
