Gambling Commission accused of 'complete failure' over Football Index storm

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.

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.

The operator claimed to be "revolutionising football betting" and became shirt sponsor of Championship clubs Nottingham Forest and Queens Park Rangers.

But on Friday Football Index told traders it had made the "very difficult decision" to reduce dividends "in order to ensure the long-term sustainability of the platform". Under the new structure, dividends that had been as much as 14p were reduced to 1p to 3p.

As a result the share prices of players plummeted. For example, the price of England and Borussia Dortmund star Jadon Sancho was trading at £1.29 on Monday evening having been £7.43 on Thursday.

Football Index issued a further statement saying: "We know that the dividend announcement on Friday has caused frustration and disappointment, and has been a stressful experience for many of you."

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The firm added it had "sustained substantial losses" in recent months and that a recovery plan had failed to make sufficient progress, leading to the cut in dividends.

This was despite traders on the site claiming the operator had told them in recent months it had never been in a stronger financial position.

The campaign group Clean Up Gambling said the case pointed to "a complete failure of regulation", tweeting that Football Index "should never have been licensed in the first place".

They added: "Lots of people have lost their life savings after being misled."

'We do not talk about individual cases'

The Gambling Commission would neither confirm nor deny it was looking into the matter amid calls for the industry regulator to take action.

A spokesperson for the regulator said: "In order to regulate effectively we do not talk about individual cases. We may, following the conclusion of an investigation, publish details and the outcome of that investigation.

"We neither confirm nor deny the existence of investigations."

Football Index's website states it holds player funds in accounts separate from business accounts and that "arrangements have been made to ensure assets in the player accounts are distributed to players in the event of insolvency".

In 2019 a sponsored video for Football Index fell foul of the Advertising Standards Authority, which said it gave the impression it was an investment opportunity rather than a betting product and did not make the financial risks clear.

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