The UK government has announced an official independent review into the collapse of Football Index, which will further include an assessment of the UK Gambling Commission‘s (UKGC) regulatory actions.
An ‘independent expert’ will participate in the investigation into the demise of Football Index, which operated as a trading platform where users could purchase ‘shares’ in active professional footballers, receiving payments based on dividends.
The review will assess both how the firm collapsed in March 2020 – after which its license was suspended by the UKGC – and identify ‘lessons to be learned,’ whilst also featuring an assessment of the decisions and actions made by the UK’s gambling regulatory body.
The government stated that the findings of the assessment are expected to be published this summer and will be used as further ‘evidence informing the ongoing review of the 2005 Gambling Act‘.
“We know how difficult it has been for people affected by the collapse of Football Index with some losing significant sums of money,” said John Whittindale, Minister for Gambling and Lotteries.
“We are setting up an independent inquiry so that we can find out how this happened. We are determined to ensure that regulators have the right tools to protect customers and to deal with novel products.
“The gambling landscape is evolving rapidly and so we are also taking action by reviewing the Gambling Act to make sure our laws are fit for the digital age.”
The review will be undertaken as Football Index customers seek compensation from the insolvent business, with administrators from the operator’s parent company BetIndex beginning to register claims last week.
The Betting and Gaming Council (BGC), which suspended BetIndex’s membership after the UKGC’s action against its gaming license, has supported the government inquiry.
A spokesperson for the BGC said: “We strongly welcome this independent review of the regulation of Football Index, up to the point where its operator’s licence was suspended in March.
“Following the suspension of BetIndex Ltd’s operating licence by the Gambling Commission last month, we immediately suspended their membership of the BGC.”
Furthermore, the standards body stated that it was ‘concerned about reports that the Gambling Commission was made aware of issues surrounding Football Index’s business model as early as the start of 2020’. These reports alleged that the UKGC had been warned that Football Index’s operations represented those of a pyramid scheme.
Maintaining that the BGC had no knowledge of such allegations, the spokesperson concluded: “The top priority remains consumer welfare and we hope that the inquiry leads to vital lessons being learned for the future.”