The UK Gambling Commission (UKGC) is under – pressure to justify the fallout of Football Index, the football player trading site that applied for insolvency last week, saying it could no longer sustain its company due to liquidity problems.
Disgruntled traders took to social media to detail the loss of thousands of pounds due to the exchange’s market crash, causing John Whittingdale, DCMS’ new undersecretary monitoring UK gaming rules, to have “frank discussions” with the Commission’s leadership ranks over the fallout from Football Index.
Whittingdale’s action comes after Neil McArthur‘s unexpected resignation as the Commission’s Chief Executive, which was revealed to stakeholders yesterday afternoon by the UKGC.
So far, the Commission has only revoked the licence of ‘BetIndex Limited,’ Football Index’s operating business, releasing a brief statement stating that “Football Index may not be suitable to carry on with licenced activities.”
Meanwhile, the All-Party Parliamentary Group on Gambling Harm (APPG) reported that the fall of Football Index showed that the UKGC ought to overhaul its regulation of gambling operators and how it assesses licensee suitability.
The UKGC has been questioned as to whether it will grant a sports betting licence to a company that markets itself as a trading exchange site but does not offer conventional sports betting.
The Advertising Standards Authority (ASA) fined BetIndex in 2019 for releasing a series of commercial videos that were deemed to advertise Football Index as a “reliable source of income” without fully describing the financial risks to consumers.
Football Index was never licenced by the Financial Conduct Authority (FCA) despite being sold as a trading forum, which meant that its player values were merely bets that could not be covered as securities commodities.
The downfall of Football Index has been dubbed the UKGC’s greatest governance setback, as the DCMS goes forward with its continuing review of the 2005 Gambling Act, which includes a look at the Commission’s administrative system and operating mechanisms.
In certain cases, the Commission was “simply outpaced and outgunned by betting companies,” according to a study undertaken by the National Audit Office (NAO) last year.
The NAO proposed a substantial raise in the UKGC’s operating spending, claiming that the agency’s £20 million expenditure was weakening its ability to regulate a $11 billion industry.