SBC News Voice of the Sports Betting Industry
In response to an investigation into the collapse of BetIndex, the UK Gambling Commission (UKGC) has announced that it will make changes to its regulatory oversight of digital gambling products.
The Independent Review highlighted a number of areas for improvement from both the UKGC and the Financial Conduct Authority (FCA).
In response to the review’s recommendations, the UKGC has introduced changes to its regulatory practices, such as the inclusion of ‘novel products’ as a factor when making assessments of an operator’s risk.
Furthermore, the Commission has moved to strengthen its Memorandum of Understanding with the FCA in order to better escalate issues which ‘blur the lines’ between financial services and gambling enterprises.
UKGC CEO Andrew Rhodes remarked: “No amount of explanation of what happened to Football Index will take away the justifiable hurt and anger its customers are experiencing having lost, in some cases, life-changing amounts of money when the gambling company collapsed.
“We accept and agree that we should have drawn a line under our efforts sooner, but this does not mean those customers would not have lost money in the event of the BetIndex company collapsing. Throughout this case we sought the best outcome for consumers within the scope of our regulatory powers.
“The review provides a number of helpful recommendations for how both regulators can work better together and for how our regulatory approach deals with novel products.”
Occurring during the UK government’s review of the 2005 Gambling Act, the decline of Football Index led to significant public discussion regarding the UKGC’s regulatory oversight of the situation.
The operator – which functioned as a player exchange platform where ‘shares’ in footballers were purchased and then rose or fell in value depending on performance – faced a ‘customer exodus’ in March after slashing dividends on players from 13p to 8p, resulting in many users losing money.
After entering administration, Betindex’s UKGC and Jersey Gambling Commission (JGC) licences were revoked and its membership of the Betting and Gaming Council (BGC) was also suspended.
Subsequent criticism of the UKGC’s oversight as a result of the operator’s collapse prompted the government to launch the independent review of the regulator in April, with Malcolm Sheehan QC later appointed to lead the review by the DCMS.
“In recent years we have seen an increase in the complexity of business models and product offerings”, Rhodes continued. “The lines between what is gambling and other types of products, such as financial services or computer games, has become increasingly blurred and no longer neatly fit into existing statutory definitions of gambling.
He concluded: “Our actions were always focused on trying to protect consumers while we sought to bring the operator into compliance with regulations. This does not mean however that those customers would not have lost money in the event of the BetIndex company collapsing.”
