Fans lose £90m in collapse of Football Index...

[dutchman]

Gambling regulator accused of being ‘asleep at the wheel’ amid betting firm’s failure



Football fans have lost nearly £90 million after a major betting firm collapsed into administration, sparking recriminations over how the company was regulated and accusations that customers have been misled.

Football Index, which promotes itself as “the football stock market”, failed late yesterday evening after a week of turmoil. The Gambling Commission has suspended the company’s betting licence as it announced an investigation into its operations today. The collapse is thought to be the biggest failure of a gambling business in British history.

Customers expressed fury and disbelief at the collapse and said they felt betrayed, with some reporting that they had lost more than £100,000. Campaigners accused the Gambling Commission of being “asleep at the wheel”.

The company, which was set up in 2015, allowed customers to buy imaginary “shares” in footballers and offered “dividends” based on player performances and their media profiles. But last weekend it slashed the dividends customers could earn by 82 per cent, triggering a massive slump in the value of players on its market. The price of Bruno Fernandes, the Manchester United midfielder, slumped by more than 80 per cent from £5.62 to £1.10 following the announcement.

The Times has spoken to a Football Index employee who appeared to support this. He did not want to be identified but said: “It seemed that towards the end the company was operating like a pyramid scheme. I’m sure that’s not what the company’s original intentions were but that’s what it became.

“It constantly needed new money from deposits coming in to make the platform viable. When people stopped signing up it was impossible for that to keep going."

The Times has also seen a warning letter sent to the Gambling Commission in December in which an experienced trader on Betfair, the online gambling company, urged the regulator to investigate Football Index, warning that its current model is “closely aligned to a Ponzi scheme”.

[dutchman]

Gambling regulator accused of being ‘asleep at the wheel’

The same as every other regulator then?