Football Index licence suspended as clients face big losses following crash

The Gambling Commission has suspended the licence of under-fire online betting operator Football Index, which suffered a market crash last weekend leaving some customers facing losses of thousands of pounds.

The operator announced on Thursday night it had gone into administration and suspended its platform, with traders told they would not be able to withdraw their funds.

Launched in 2015, Football Index mimics the stock market in that it allows traders to buy 'shares' in footballers. Users receive dividends based on how the footballers perform, while the share price can also rise and fall.

Last Friday Football Index told customers it had made the "very difficult decision" to reduce dividends "in order to ensure the long-term sustainability of the platform". As a result the share prices of players plummeted, with some traders claiming to have lost their life savings as a result.

The Gambling Commission has been criticised over its handling of the case, with some users saying they had warned the regulator of concerns about the operator's viability before Christmas. The commission said it had suspended the licence following an ongoing review of the operator because it had concerns "Football Index may not be suitable to carry on with licensed activities".

Football Index is the subject of an ongoing review by the Gambling Commission

It added in a statement: "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."

The industry regulator said it would continue to work with the Jersey Gambling Commission, which also licenses Football Index, and that it would not comment further while the investigation was ongoing.

Football Index had claimed to be "revolutionising football betting" and also became shirt sponsor of Championship clubs Nottingham Forest and Queens Park Rangers. QPR said the operator's logo would be removed from their shirts with immediate effect.

Chief executive Lee Hoos said: "As a football club we entered into a one-year agreement with Football Index in good faith. In light of recent events, the front property of QPR’s home and away strips will no longer sport the Football Index logo."

It has also been reported that Nottingham Forest would be following suit.

In its statement on Thursday night, Football Index said the decision to suspend the platform had been made after consultation with "external legal and financial advisers, and the UK and Jersey Gambling Commissions".

The statement added: "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."

Football Index said the restructure could involve equity being distributed to customers, board representation for customers, and a new management team being put in place.

It added: "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."

Football Index is the trading name of BetIndex Ltd, whose membership of the Betting and Gaming Council has also been suspended.

A BGC spokesperson said: "As the standards body representing the regulated industry, our top priority is ensuring that the interests of BetIndex Ltd’s customers are protected."

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