In the spring of 2021, the US gambling website Football Index collapsed. Thousands of British customers of the operating company BetIndex Ltd. lost horrendous sums. An official investigation later concluded that the football trading offering bore features of a Ponzi scheme.
Yesterday, the UK Parliament held a special debate on the impact of the collapse of the betting platform. Those responsible rejected a demand by opposition representatives for compensation for the victims from public funds.
compassion instead of money
The British government is sticking to its stance that it does not want to use state funds to compensate those injured by the Football Index betting platform. Conservative Secretary of State Nigel Huddleston confirmed this yesterday in London’s Westminster Hall. He explained:
As far as compensation is concerned, there are (…) procedures from which we cannot deviate. It is also very clear that we have great compassion – everyone has great compassion. (…) However, we do not think it appropriate for the government to use public funds to cover losses suffered by individuals resulting from the collapse of a gambling company. When consumers gamble with their money, it is not the same as using money for other things, such as gambling. B. Savings products. Additionally, the Gambling Commission has no statutory powers that would allow it to offer compensation for losses incurred as a result of a gambling operator’s collapse.
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The Gambling Commission (UKGC), which has come under particular criticism in the context of the Football Index, reports to Huddleston’s Department for Digital, Culture, Media and Sport.
Football Index Collapse
Labor politician Liz Twist had to special debate [Seite auf Englisch] called for the “Football Index Collapse”.
There have been clear regulatory failings in the collapse of the Football Index and @fi_action customers lost thousands and have had lives torn apart as a result. We need to do so much more to look at this, work with those affected and push for their justice. pic.twitter.com/cyXF6NFfcP
— Liz Twist MP (@LizTwistMP) June 7, 2022
Twist is an advocate for the victims of the platform and also explained their financial and psychological hardships to the MPs using case studies. She sees the government as having a duty to work out solutions together with those affected, including a compensation scheme.
Football Index struck a chord with the idea of trading the value of real football players on its own stock exchange. Founded in 2015 and licensed by the UKGC, the platform quickly became a favorite of sports betting and trading fans.
The offer illegally played with the perception of many users that the platform is not about gambling. Rather, the impression was reinforced that the Football Index is a financial product that, with sufficient skill, can yield high dividends.
It was over in March last year. After the UK gambling regulator revoked the license due to irregularities, operator BetIndex suspended its services at short notice.
The losses incurred are estimated at up to GBP 124 million (up to EUR 141 million).
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Twist pointed out that the often existence-threatening consequential damage from the collapse of the football trading platform was largely due to serious negligence on the part of the responsible state authorities. Both the gambling authority UKGC and the financial market authority FCA acted far too late, despite early warning signals.
Gambling supervision under criticism
To this conclusion in September 2021 was also an independent investigation report [Seite auf Englisch] came.
Author Malcolm Sheehan noted, among other things, that the UKGC had fallen well short of its capabilities both in testing the new Football Index product and in issues of decision-making, agency and problem-solving.
Various members of parliament supported Liz Twist in her demands at yesterday’s parliamentary session. As explained by Ronnie Cowan of the Scottish National Party, among others:
