Begbies Traynor, the insolvency practitioners for BetIndex, initiated the process of allocating funds to former Football Index customers at a hearing in the Royal Court of Jersey today.
The company was initially appointed as BetIndex’s insolvency practitioner in late March following the initial collapse of Football Index and began processing customer claims against the company in April.
In a statement to its former customers last week, BetIndex confirmed that the initial hearing would take place on 10 May to address the distribution of lost finances.
There is currently £4.5 million held in the Football Index Player Protection Trust Account, and it is now Begbies Traynor’s responsibility to appropriately distribute this money among former Football Index users.
As the bets of many customers are still active, customers may be owed dividends based on the wagers they invested in players, and so Begbies Traynor administrators must now determine the date at which dividends are to be calculated from, which could fall from the moment Football Index suspended operations up to the date when the bets are due to expire.
Additionally, the firm faces a challenge in weighing up the claims of players who lost funds in their accounts as a result of the firm’s demise against those owed dividends, whilst it must also identify the customers who would be entitled to the funds in the account.
BetIndex has been left with a £1.3 million surplus to be distributed among customers with funds still in their accounts and with active bets, after its current liability to customers of around £3.2 million is taken into account.
The company has stated that player funds have protection over other creditors’ claims, but according to its own terms and conditions, funds invested in football players via the football trading exchange do not benefit from this protection.
Football Index’s collapse was a direct consequence of its decision to slash dividends on players from 14p to 3p, leading to many customers losing significant sums of money, ranging from hundreds to hundreds of thousands of pounds.
Following a mass withdrawal by customers and investors, the exchange was forced to enter administration and its betting license was subsequently suspended by the UK Gambling Commission (UKGC), whilst its member status of the Betting and Gaming Council (BGC) was also placed on hold.
The fallout from Football Index’s collapse has taken a central role in the government’s ongoing review of British gambling regulations, with the UKGC facing criticism for being ‘asleep at the wheel’.
UK Ministers were reportedly ‘deeply concerned’ by the collapse of Football Index, subsequently announcing an investigation into the circumstances surrounding its collapse, whilst the fallout was described as a ‘scandal’ by the All Party Parliamentary Group for Gambling Related Harm (GRH APPG).
Law firm Leigh Day has also been enlisted by former Football Index customers and the UKGC may become a target of its planned legal action.