Football Index operating licence suspended (plus a summary of what led up to that & what has happened since)

The Gambling Commission has today (12 March 2021) published the following Information Notice, in which it confirms suspension of the Remote General Betting (Standard – Real Events) operating licence held by BetIndex Limited, trading as ‘Football Index’:

Information notice: Suspension of licence – BetIndex Limited

The Gambling Commission has decided to suspend the operating licence of BetIndex Limited (t/a Football Index) pursuant to section 118(2) of the Gambling Act 2005.

The suspension follows an ongoing section 116 review into the operator, as we had concerns activities may have been carried on in purported reliance on the licence, but not in accordance with a condition of the licence, and that Football Index may not be suitable to carry on with licensed activities.

We have made it clear to the operator that as the investigation progresses, we expect it to focus on treating consumers fairly and keeping them fully informed of any developments which impact them.

Football Index can be contacted via their website and as part of our review we continue to work closely with colleagues from the Jersey Gambling Commission.

The Gambling Commission will not comment any further whilst this investigation is ongoing.

Reference by the Commission to “concerns that activities may have been carried on in purported reliance on the licence, but not in accordance with a condition of the licence” leaves open to question the type of licence condition breach that is being investigated. It raises the question whether such concerns are linked to the following extract from the Commission’s National Strategic Assessment, published in November 2020 (as reported by us here):

Another area of product innovation that we continue to scrutinise are new business models which risk blurring the lines between betting regulated by us, and spread-betting or other instruments regulated by the FCA.

GC action

We will continue to:

  • engage with DCMS to provide advice on the resources required to regulate effectively
  • understand new technologies
  • improve our understanding of new products, delivery mechanisms and payment methods.

Interestingly, in its own website ‘strapline’, Football Index has to date described itself as “a real money virtual stockmarket licensed and regulated by the Jersey Gambling Commission and the UK Gambling Commission. This is a betting platform and should not be viewed as an investment vehicle”. It has gone on to describe its aims as follows:

The first aim – to become a challenger to traditional bookies – was part of a response to customers regularly losing money through betting. Buying Shares in a footballer on the Index is a bet on their future performance. It’s a bet that isn’t defined by a win-lose.

Secondly, we wanted to provide a way of Trading in something that you know and love. The regular stock market can seem intimidating and inaccessible. Football Index replicates the way the market works, but allows you to trade a commodity you understand – football.

Buy Shares. Sell Shares. Make a profit with your football knowledge.

Time will tell whether the reason for the operating licence review has any association at all with the following comments by Football Index in a market update from October 2020:

In line with our future goals, we have engaged with financial regulators with the objective of holding a licence that is more appropriate for our ‘market’ than our current ‘betting’ licence. If successful, this outcome would take us a step closer to realising our vision of becoming a fully regulated sports market, trading a high-yield asset and sitting alongside financial markets. It’s an exciting development for all of us, although at this stage embryonic.

In terms of the immediate background circumstances leading up to today’s Gambling Commission Information Notice:

1. Friday 5 March 2021: A dividend restructuring announcement was made by Football Index purportedly in order “to ensure the long-term sustainability of the platform”.

Whilst its Terms of Use refer to reductions in the level of dividends only being permitted in January and June each year, they do reserve Football Index’s right to do so at other times, including “in exceptional circumstances to protect [its] business”. The Terms of Use also commence by listing key risks that customers will face when betting with Football Index, including warnings that:

  • the Dividend Table will change from time to time,
  • the basis on which dividends are awarded may change and
  • there is no guarantee of winning any particular amount of dividends in respect of bets.

2. Saturday 6 March 2021: Publication of the following statement by Football Index:

Dear Traders,

We know that the Dividend Announcement on Friday has caused frustration and disappointment, and has been a stressful experience for many of you.

Firstly, anyone who is concerned about their well-being, or the well-being of another user should consider the resources available on our Safer Gambling page or these mental health resources.

We feel that you deserve additional background as to how we have reached these decisions.

Over recent months, Football Index has sustained substantial losses. The Board agreed a recovery plan aimed at stemming these losses whilst retaining the dividend payments at current levels. It was hoped that this would stimulate a market recovery which would allow for the higher dividend to continue to be paid prior to the normal annual review, and for an exciting and affordable Dividend to be announced at that time. The issuance of new shares and IPOs were key deliverables of that recovery plan, amongst other initiatives to rejuvenate the market.

Our team worked hard to deliver against that recovery plan. We made increased efforts to maintain the levels required when they were at risk. However, it became clear that important KPIs of the plan were not being sustained to a level that would support the ongoing payment of dividends at those levels, despite substantial progress being made against those objectives.

While the Board worked to form a new plan to retain the maximum sustainable level of dividends, the Board decided to continue business as usual until a new plan was agreed and adopted, on the basis that the Board considered that this would be less disruptive to, and in the best interests of stakeholders. Once it was clear that the reduction and restructure of dividends to the degree announced was necessary, we suspended placing issuance orders and announced the reduction and restructure to customers as soon as reasonably practicable. We will notify customers if and when these are put into operation again. There was no intent to mislead customers in these transactions, or in the announcement of a Q&A session.

Once again, anyone concerned about their well-being or the well-being of another user should reach out through the resources detailed.

We would also like to stress that while we are aware of the fact that our latest announcement proved upsetting for many of you, we have a zero-tolerance policy with regards to abuse and threats to our employees. Any such behaviour will not be tolerated, and we will pursue all necessary measures should they arise.

As ever, the long-term sustainability of the platform remains our main priority.

Football Index HQ

3. Tuesday 9 March 2021: The Racing Post publishes an article entitled “Gambling Commission accused of ‘complete failure’ over Football Index storm” in which it states:

The Gambling Commission has been accused of a “complete failure” of regulation following claims that some users of under-fire online betting operator Football Index had lost their life savings after its market crashed over the weekend.

4. Thursday 11 March 2021: Publication of the following announcement by Football Index:

Dear Football Index Community,

We understand this has been a difficult and challenging week for you all. After much difficult deliberation we must now issue the following update.

The Board of BetIndex Limited has consulted with external legal and financial advisors, and the UK and Jersey Gambling Commissions. The decision has been made to suspend the platform.

The dividend restructure announced on Friday was a necessary step in a business recovery plan to seek the long-term sustainability of the platform. However, it is clear that this has not been well received and we need to find a more agreeable way forward.

We are pursuing a restructuring arrangement to be agreed with our stakeholders including, most importantly, our community.  We are preparing this through an administration with insolvency practitioners Begbies Traynor, to seek the best outcome for customers with the goal of continuing the platform in a restructured form.

The restructure could involve equity in BetIndex Limited being distributed to customers, board representation for customers, and a new management team put in place, along with other initiatives.

Until such time as the administrators are in office, the platform will remain suspended and no trading or payment transactions, such as deposits and withdrawals, will be possible.  Once in office, the administrators will be in contact with customers, creditors, and other stakeholders.  This interim step of suspending the platform is merely to ensure that everyone’s rights are preserved in relation to funds held by BetIndex Limited.

We fully understand and anticipate concerns regarding a temporary suspension of your ability to withdraw existing Cash Balances and assure you that they will remain held in a segregated account to be managed in conjunction with our advisors, protected by the trust arrangements that are in place and will be subject to review by the administrators.

The Board have at all times been seeking the best way to sustain the platform as we believed a recovery was not only possible but also in the best interests of our customers. This decision is deeply regrettable, and is the outcome we were seeking to avoid by restructuring dividends.  However, we believe it is the most responsible route forward for our community given the situation as it has developed.

The administrators will release a statement upon their formal appointment by the Court, which is anticipated to be in the next 10 days and will be able to share further timelines at that point.

The Board of BetIndex Limited

UPDATES:

1. Reacting to suspension by the Gambling Commission of the operating licence held by BetIndex Limited, the Betting and Gaming Council has stated:

Following the suspension of their operating licence by the Gambling Commission, we are immediately suspending BetIndex Ltd’s membership of the BGC while the details of the case are investigated. As the standards body representing the regulated industry, our top priority is ensuring that the interests of BetIndex Ltd’s customers are protected.

2. It has subsequently been announced that solicitors Leigh Day are “investigating claims on behalf of Football Index ‘traders’ who believe they have been misled by the platform and failed by the Gambling Commission”. You can read more about this on Leigh Day’s website here. It also quotes Matt Zarb-Cousin, CEO of Clean-Up Gambling, as saying:

Clean Up Gambling is working with Leigh Day to ensure Football Index users have the best possible chance of getting redress from a company that has consistently misrepresented its product and misled the public regarding its sustainability.

3. David Clifton is quoted in a 15 March 2021 Vixio Gambling Compliance article entitled Regulator Under Fire As Football Shares Firm Collapses (that you can download below), commenting on whether customers of Football Index might have any right to compensation for their losses.

4. A Guardian article entitled “Football Index seeks buyer amid widespread customer fury” published the day after Gambling Commission CEO Neil McArthur suddenly resigned (on 15 March 2021), has quoted Whitehall sources as saying that the new gambling minister John Whittingdale has held “frank” discussions with the Gambling Commission regarding the Football Index matter.

5. A 16 March 2021 BBC news report entitled “Football Index collapse: ‘I lost £4,000 in seven days'” summarises stories of losses sustained by some customers of Football Index.

6. A subsequent BBC news report (entitled “Football Index collapse: MPs call for inquiry into ‘scandal'”) reports that:

  • the Gambling-Related Harm APPG has written to the Culture Secretary, Oliver Dowden, calling for a public inquiry into the collapse of Football Index, quoting the APPG’s Chair Carolyn Harris MP as saying: “This can only be termed a scandal. It underlines the need for wholesale reform of the gambling industry and raises significant questions of the Gambling Commission, given they saw fit to licence this platform and failed to enact adequate oversight”, and
  • Leigh Day partner Nichola Marshall has said (in relation to her firm’s above-mentioned investigation into this matter): “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”.

7. An 18 March 2o21 Guardian article entitled “Football Index: Gambling Commission was warned about firm in January 2020” alleges that the Gambling Commission was warned in January 2020 that Football Index was “an exceptionally dangerous pyramid scheme under the guise of a ‘football stock market’ and that immediate and urgent action was needed ‘to alert and protect their users’”.

8. Notwithstanding previously stating in its 12 March 2021 Information Notice that it “will not comment any further whilst this investigation is ongoing”, the Gambling Commission published an “update” on its website on 19 March 2021, essentially confirming what had already been published earlier the same day in an iGB article entitled “GC defends decision not to suspend Football Index licence earlier”, stating as follows:

BetIndex – Update

Due to the number of consumers interested in our investigation into BetIndex we have taken the decision to publish some further information about the background to our regulatory action. We have focussed this update on the areas where we have received questions about our approach.

Background

BetIndex Limited was granted a licence for Remote General Betting Standard Real Event on 9 September 2015. The operator is also licensed by the Jersey regulator.

The current BetIndex product allows customers (called traders) to place bets (shares) on the future performance of footballers. A bet lasts for 3 years during which time they accrue dividends. After 3 years the bet expires meaning that customers lose their stake and any right to further dividends. The product evolved to enable customers to buy and sell bets with prices fluctuating according to demand. We have identified that the product contains elements that are betting in nature, and therefore regulated by us as gambling, as well as elements are not considered gambling and therefore not subject to our regulatory remit.

Gambling product features

Following concerns about the operator we began a formal Review into the licensee under section 116 of the Gambling Act on 20 May 2020. The focus of our review was to address issues in relation to the betting aspect of the product At that stage there were no grounds to suspend their operating license.

During the course of the review, we utilised betting specialist expertise, a Forensic Financial accountant and specialist external QC to examine the business model, the finances of the company and the complex legal questions over the appropriate regulatory framework.

In the early part of March, BetIndex advised of plans to self suspend with a view to restructure and relaunch. Our concerns as to the timings of this and the position regarding customer funds led us to suspend the licence on 11 March 2021. We have acted in tandem with the Jersey Regulator, with whom BetIndex also hold a licence.

We know from experience that the suspension of a license can, of itself, trigger or hasten the financial decline of an operator and put customer funds at risk. That is why we will always consider whether there are steps short of suspension that can still deliver the right regulatory outcomes and address the risks that consumers face without accelerating the financial collapse of a business. We will therefore only turn to suspension when that is the only option for delivering the right regulatory outcome and, indeed, the legislation requires us to exercise those powers in that way. We were satisfied that on 11 March suspension was the only regulatory option left available to us.

Whilst our investigation is ongoing our priority is to ensure the licensee focuses on treating consumers fairly and keeping them fully informed of any developments which impact them.

Information for impacted consumers

BetIndex holds a Trust Account intended to hold dividends to be paid to winning customers. We have been assured by their solicitors that BetIndex has suspended payments from this account whilst customers’ entitlements can be calculated and pending an application to the Court for directions. BetIndex requires a direction from the Court as to the appropriate treatment of those funds. We understand that those legal processes are underway.

The assurance the Commission has is that the funds in the Trust Account will not be distributed to any creditor other than customers. However, its ability to distribute immediately to customers, and if so which customers, is likely to be subject to the directions of the Court rather than the Commission.

Whilst there will be limitations on what information we can publish whilst regulatory investigations are ongoing, we will continue to provide updates whenever we have further information to share.

9. As reported by EGR on 26 March 2021, collateral damage from the collapse of Football Index has been sustained by Footstock, that has described itself as offering “a unique mix of fantasy football and gambling”. EGR writes that “football trading app Footstock has surrendered its UK gambling licence and ceased trading with immediate effect as the fallout from the Football Index crash reverberates across the industry”. An announcement on the Footstock website reads as follows:

I am announcing with deep regret, that Footstock has surrendered its UK gambling licence and ceased trading with immediate effect.

The whole sector has been shaken by recent events. As a result, over the last few days, we have suffered significant setbacks.

Expected and necessary funding being put on ice, we can no longer run our Seedrs campaign and valuable partners are pausing cooperations.

These unprecedented circumstances have crushed our company in this crucial period of growth. But without funding, Footstock cannot survive.

Over the last few days, we tried incredibly hard to find a solution that allows us to stay operational. But ultimately I am sorry to announce that Footstock has entered the German equivalent of UK administration and we have had to suspend the platform.

Over the coming weeks, we will continue to consult with our professional advisors and keep you informed on the next steps as soon as we are able to, including information about your cash balances.

10. On 11 April 2021, in an article entitled “Ministers plan investigation into collapse of Football Index”, the Sunday Times reported that the UK government is to establish an “independent investigation” into the collapse of Football Index, quoting a ‘government source’ as saying that “something appears to have gone very wrong here”, adding that “this case further reinforces the need for our comprehensive review of gambling laws. This independent investigation into Football Index will feed into that work and if we need to make changes to regulation to protect people, we will.”

11. On 13 April 2021, the Gambling Related Harm APPG wrote a letter to the Prime Minister (that you can download below), “calling for an urgent independent public inquiry into the circumstances around the collapse of Football Index and Footstock, which should include the role of the Gambling Commission and the Department of Digital, Culture, Media and Sport (DCMS) in its terms of reference”. The letter added that: “it appears as though the Gambling Commission licensed what became a pyramid scheme, was subsequently warned that it had become a pyramid scheme, but by negligence or design allowed Football Index to overstate its financial position, reassuring its users to attract more investment and new money into the platform”.

12. As reported by SBC News on 14 April 2021: “Begbies Traynor, the insolvency practitioner of Football Index operator BetIndex, has begun to process customer claims against the company, which officially entered into administration on 26 March. This morning, Begbies Traynor issued a communication to Football Index customers, notifying them that it had begun to register claims against the insolvent business, requiring affected customers to fill out an online form. As BetIndex’s chosen practitioner, Begbies Traynor are required to carry out all statutory duties and obligations bound by the UK’s Insolvency Code of Ethics, ensuring that all potential creditors can register their claims. Football Index’s claims process has been made available to all customers, including those who self-excluded on Gamstop.  However, the practitioner underscored that: “Submitting a claim does not mean that the claim is accepted, the validity of claims will be adjudicated upon in due course.” Begbies Traynor did not provide any further information with regards to how it will qualify customers’ claims or how it will judge the criteria for compensation”. 

13. Subscribers to EGR Intel can access here a pay-gated article (published on 15 April 2021) entitled “Pressure situation: The under-fire UK Gambling Commission feels the strain”, that includes comments by David Clifton and others in relation to the following issue: “The high-profile collapse of Football Index has led to accusations that the UKGC was ‘asleep at the wheel’. But where does this leave the beleaguered regulator as Neil McArthur heads for the exit?”

14. Also on 15 April 2021, in response to questions posed by three Labour MPs, John Whittingdale MP, the DCMS Minister for Gambling & Lotteries stated:

The government is taking the collapse of Football Index and the concerns of those affected by it very seriously, and the Secretary of State and I have met the Gambling Commission to receive urgent updates. We are particularly keen to understand both how this situation came about and what lessons we can learn from these events. Further details will be provided in due course.

DCMS officials were made aware of the challenges facing Football Index in March 2021 shortly before the Gambling Commission suspended the licence of BetIndex Ltd, the operator of Football Index. The Gambling Commission’s regulatory investigation is ongoing. While we have been in close contact with the Commission as it continues its investigation, its role as set out in the Gambling Act is to conduct investigations fully independent of Government. It is not for the government to direct independent regulatory bodies on individual cases.

Our Review of the Gambling Act 2005 is considering a range of questions around the regulation of gambling, including the powers and resources of the Commission and whether any changes to the legislation are required to make it fit for the digital age. The review will also consider whether an alternative system of consumer redress, such as an ombudsman, is needed. Our call for evidence closed on 31 March and we are carefully considering the responses received.

15. On 20 April 2021, following a written statement made by John Whittingdale MP, a press release (entitled ‘Government to launch independent review into collapse of football gambling firm’ that you can download below) was published by the DCMS. It reads as follows:

An independent review examining the circumstances surrounding the collapse of the gambling company, Football Index, is to be launched, Minister for Gambling and Lotteries John Whittingdale has announced.

  • Independent expert to be appointed to look at the demise of Football Index
  • Review will also assess action taken by the Gambling Commission
  • Findings will help to inform the Government’s ongoing review into the Gambling Act

Football Index, operated by BetIndex Ltd, had a model that allowed customers to buy ‘shares’ in footballers and receive returns based on their performance. The Gambling Commission suspended the firm’s operating licence in March, and it entered administration shortly after.

The Government will appoint an independent expert to lead the review. The company is understood to have had many thousands of customers, with some having lost very large sums of money as a result of its demise.

As well as establishing how the firm collapsed and identifying any lessons to be learned, the review will look at the decisions and actions of the Gambling Commission, which licenses and regulates the gambling industry.

The findings will be made public in the summer and they will form part of the evidence informing the wider review of the Gambling Act. A White Paper setting out findings and proposals for reform of the Act will be published by the end of the year.

Minister for Gambling and Lotteries John Whittingdale said:

“We know how difficult it has been for people affected by the collapse of Football Index with some losing significant sums of money. We are setting up an independent inquiry so that we can find out how this happened.

We are determined to ensure that regulators have the right tools to protect customers and to deal with novel products. The gambling landscape is evolving rapidly and so we are also taking action by reviewing the Gambling Act to make sure our laws are fit for the digital age.”

The review will also look at the work of other relevant regulators, to provide a clear account of how Football Index’s activities were regulated and identify if there are areas for improvement in how complex products are treated.

The period under review is September 2015 to 11 March 2021, which is when the Gambling Commission suspended BetIndex’s licence after concerns over customer funds.

The appointment of an independent reviewer and further details of the terms of reference will be announced shortly.

16. Also on 20 April 2021, the Betting and Gaming Council published its response to the above DCMS announcement, stating:

A spokesperson for the Betting and Gaming Council said: “We strongly welcome this independent review of the regulation of Football Index, up to the point where its operator’s licence was suspended in March.

“Following the suspension of BetIndex Ltd’s operating licence by the Gambling Commission last month, we immediately suspended their membership of the BGC.

We have been concerned about reports that the Gambling Commission was made aware of issues surrounding Football Index’s business model as early as the start of 2020, something the BGC was not made aware of at the time.

The top priority remains consumer welfare and we hope that the inquiry leads to vital lessons being learned for the future.”

17. David Clifton’s April 2021 ‘Licensing Expert’ article for SBC News entitled “Gambling can’t hide from its spotlight” (that you can download below) comments on the above-mentioned DCMS announcement of an independent review into the collapse of Football Index.

18. Arising from David’s above ‘Licensing Expert’ article for SBC News, he was invited to answer a series of questions posed by ‘Football Index Trader’. You can read here David’s answers to those questions based on information available at the time of publication on 5 May 2021 of the ‘Football Index Trader’ blog (entitled “FI and the Gambling Commission: Q&A with licensing expert David Clifton”).

19. Subsequently on 5 May 2021, a ‘Company Announcement’ was made to the effect that application had been made to the Royal Court of Jersey for a determination (a) how BetIndex will be allowed to distribute funds held in the Football Index Player Protection Trust Account and (b) in relation to identification of customers who would be entitled to such funds. That announcement reads as follows:

On 30 April 2021 the Administrators of BetIndex Limited issued an application for the determination of the appropriate distribution of the monies held in the Football Index Player Protection Account, and the identification of the customer classes who may be entitled to participate in those funds.  This is the first step towards the distribution of cash balances to customers of the Football Index platform.

The hearing will take place at 11:30am on Monday 10 May 2021.  A link to the application documents are available below:

BetIndex Trust Grounds.pdf

BetIndex Application Notice.pdf

Witness Statement of Adrian Hyde – Trust application.pdf

The above-mentioned application documents can also be downloaded below. The final paragraph of Adrian Hyde’s Witness Statement stresses the reasons for the Court’s determination to be made as a matter of urgency. It states as follows (with our emphasis added in bold below):

The Joint Administrators would be most grateful if the Application could be heard as soon as possible. The reasons for the urgency are as follows:
(i) the Company is regulated by the Gambling Commission in the UK and the Jersey Gambling Commission in Jersey. Both Commissions are understandably very keen for the monies in the Trust Account to be disbursed to the proper beneficiaries as soon as possible and the UK Gambling Commission, in particular, is applying a significant amount of pressure in this regard;
(ii) understanding the Court’s view of the customers’ claims against the Trust Account is important in order for the Joint Administrators to progress the CVA (or scheme of arrangement) because it will be integral to ascertaining the customers’ unsecured claims against the Company. Work is being progressed urgently in the background but ultimately it is crucial for the CVA to be completed, and the platform relaunched, before the start of the 2021/22 football season in August 2021 and so early directions from the Court would be very helpful;
(iii) as can be seen from the table in paragraph 20, there are 261 customers with Trust Account balances, as at 11 March 2021, between £1,000 and £100,000 and so significant hardship is being suffered by such customers (as well as the other customers with smaller balances); and
(iv) I am also aware that a number of customers with claims on the Trust Account are experiencing a large degree of stress in relation to the ongoing situation and we have been made aware that many are suffering from mental health issues which would be alleviated by the expedited return of the monies in the Trust Account.
20. On 11 May 2021, it was reported by iGB (in an article entitled “Football Index’s £4.5m player funds hearing raised to High Court”) that the hearing of the application mentioned at point (19) above is being transferred to the High Court of Justice and that “a date for the hearing has not yet been selected, with the next steps involving administrators and others involved setting out a date for the determination”.
21. On 14 May 2021, it was reported by SBC News that the High Court has set 19 to 21 May 2021 for the above hearing.
22. On 21 May 2021, an ‘Administrator Announcement’ was made, stating as follows:
The High Court has concluded the hearing of the Administrators’ application for guidance on the distribution of the Player Protection Fund monies. Following lengthy argument for several different dates, the Judge has reserved his decision. Counsel made the judge aware of the urgency of the matter and he confirmed that he will hand down judgement as soon as possible, but due to trial commitments next week, it may not be until the week ending 4 June 2021. As soon as the judgement is released we will provide further details of the payment process, and ensure that payments are made at the earliest possible time.
23. On 22 May 2021, an iGB article entitled “Football Index planned administration days before dividend change” reported that documents released in advance of the above High Court hearing had revealed that Football Index operator BetIndex Limited decided to go into administration on 5 March 2021. A further iGB article on 24 May 2020 (entitled “High Court judge postpones Football Index decision”) expanded on the above-mentioned ‘Administrator Announcement”.
24. On 27 May 2021, an iGB article entitled “Football Index founder denies he received millions from the business” reported that “Football Index co-founder Adam Cole has sought to correct what he described as ‘inaccuracies’ regarding the payments he and other BetIndex shareholders received before the operator collapsed earlier this year”.
25. On 7 June 2021, the Government confirmed the appointment of Malcolm Sheehan QC to lead the above-mentioned independent review into the regulation of Football Index. You can read about this appointment and the Terms of Reference for the independent review in our subsequent website posting entitled “Malcolm Sheehan QC to lead independent review into regulation of Football Index”.
26. By way of update to point 22 above, on 8 June 2021, an iGB article entitled “Football Index to return £3.5m in account funds after High Court ruling” reported on the High Court judgment (accessible here) delivered on that day, stating:
A court has selected 26 March as the cut-off date for payment of Football Index dividends, meaning roughly £3.5m in player account funds may now be distributed in a process that should take 7-18 working days. The High Court of England and Wales’ decision means that player account funds – which are held in the player protection account – include winnings to be paid based on for events up until and including 26 March, but no further. This means around £3.5m will be paid from the account, which held a total of £4.5m. The hearing dealt only with funds held in player accounts, with the status of money spent on or held in active bets still undetermined.
In the conclusion section of his judgment, Deputy Judge Robin Vos stated:
I agree with the interpretation put forward by Ms Hilliard on behalf of the administrators. In accordance with clause 2 of the trust deed, the entitlements of Customers are fixed by reference to their Customer Funds as at 26 March 2021. The trust funds should be distributed as soon as possible. They should be used first to pay each Customer’s entitlement to “Customer Funds” as at 26 March 2021. This would include dividends which have accrued up to that date even if they have not been credited to the Customer’s account. Any surplus should be paid to BetIndex.
27. On 29 June 2021, the Gambling Commission published a “Football Index update” (on which we have reported here).
28. With effect from 13 July 2021 and in accordance with the above-mentioned High Court judgment, Football Index customers are able to log in to their accounts and withdraw their funds but they should allow between two and ten working days from the date of the withdrawal request for the money to appear in their nominated bank account.
29. Our website posting of 3 August 2021 entitled “Today’s tweets by new UKGC CEO give cause for hope of more open engagement in future” comments on a series of tweets by the new Gambling Commission CEO, Andrew Rhodes, concerning the processes currently underway in relation to Football Index.
30. On 22 September 2021, the independent report of Michael Sheehan QC into the regulation of Football Index was published, as reported by us here. Both the Gambling Commission and the Financial Conduct Authority have faced criticism within the report.
Download article PDF: Betindex Trust Grounds
Download article PDF: Betindex Application Notice