The UK government has announced the launch of an official independent investigation into the collapse of Football Index, which will include a review of the UK Gambling Commission’s (UKGC) regulatory activities.
The inquiry into the collapse of Football Index, which acted as a trading platform where users could buy “shares” in successful professional footballers and receive payments based on dividends, will include a “independent expert.”
The investigation would look into how the company went bankrupt in March 2020, following which the UKGC revoked its licence, and identify “lessons learned,” as well as the UKGC’s decisions and acts.
The results of the assessment will be released this summer, according to the government, and will be used as further “evidence informing the ongoing review of the 2005 Gambling Act.”
John Whittindale, Minister for Gambling and Lotteries explained: “We know how difficult it has been for people affected by the collapse of Football Index with some losing significant sums of money.
‘right tools to protect customers’
“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 Football Index administrator began work registering customer’s claims last week, as customers seek compensation from the operator’s parent company BetIndex.
The Betting and Gaming Council (BGC), which revoked BetIndex’s membership following the UKGC’s action against the company’s gaming licence, has backed the government investigation.
According to a BGC spokesperson: “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.”
Problem business model
Furthermore, the standards body expressed concern over claims that the Gambling Commission was made aware of problems with Football Index’s business model as early as the beginning of 2020. According to these sources, the UKGC was issued a warning that Football Index activities resembled a ‘Pyramid Scheme’ Back In January 2020
Maintaining the BGC was unaware of the allegations, the spokesperson concluded: “The top priority remains consumer welfare and we hope that the inquiry leads to vital lessons being learned for the future.”