Football Index Collapse

Jim Shannon Excerpts

Tuesday 7th June 2022 Westminster Hall

[Ronnie Cowan (Inverclyde) (SNP)]

I congratulate the hon. Member for Blaydon (Liz Twist) on bringing forward this debate. I was assured as recently as this morning in this very room by a Government Minister that the gambling review White Paper is due in the coming weeks. Minister, we cannot keep meeting like this. Among a range of reforms, the gambling review White Paper must effectively regulate the digital age, and consumers must be better protected from Ponzi schemes.

BetIndex Ltd, trading as Football Index, was a sports betting platform. An operating licence was issued to BetIndex by the Gambling Commission in September 2015. It was BetIndex’s decision to dramatically decrease its dividend payment by 82% that led to a virtual market crash on the site. Scandalously, days before the crash, Football Index minted new shares in footballers, enticing consumers to purchase shares that some days later would be worth far less than their former value.

[Jim Shannon (Strangford) (DUP)]

One employee from the firm stated that 100 people were employed by Football Index. Some, but not all, of those had salaries of £1 million. Does the hon. Gentleman feel that the investigation should pursue the directors, who seem to be well off at this moment?

[Ronnie Cowan]

Absolutely. I will touch on that briefly later. I watched “Question Time” from Belfast a couple of weeks ago, and I was surprised that the hon. Member for Strangford (Jim Shannon) did not intervene at any point.

BetIndex failed to properly notify the Gambling Commission of the nature of the product in its licence application. The Gambling Commission could have responded better, with earlier scrutiny of the product offered by BetIndex, quicker decision making and action, and better escalation of the issues, but it did not do so. The Gambling Commission ignored warnings that its business model was flawed and that customers’ money could be at risk. Although Football Index was not regulated by the Financial Conduct Authority, the report identified areas for improvement for the FCA. Those included its speed of response to requests from the Gambling Commission.

Football Index is a scandal that underlines the need for wholesale reform of the gambling industry and raises significant questions about the Gambling Commission, given that it saw fit to license the platform and failed to enact adequate oversight. In the regulated sector, when people gamble they should have confidence that they are doing so on the basis of the outcome of a wager. It should not be a gamble on the solvency or sustainability of the licensed operator.

This scandal shows how much a gambling ombudsman is needed to ensure that consumers have a clear avenue for redress in circumstances such as the Football Index scandal. The Government said that they would not use public funds to compensate customers who have lost money, despite customers losing up to, at a modest estimate, £90 million. BetIndex Ltd was approved and operated a licence authorised by the Gambling Commission. The failure is on the regulator as much as it is on the Ponzi scheme that stole consumers’ cash. The Government should be doing more to protect their citizens and should act swiftly when they have let them down. The ex-CEO of Football Index, Adam Cole, has been named persona non grata by the Jersey Gambling Commission, with the regulator citing the executive’s track record as the reason for its decision. While the Jersey Gambling Commission has stepped up, there are no immediate plans for the UK Gambling Commission to act.

At the heart of the scandal are those robbed of their money. One football fan has revealed that he lost £98,000, saying:

“It has completely torn my life apart…It is all the money I’ve ever saved, almost everything I’ve ever had and has put quite simply left me on the verge of committing suicide.”

This is a wrong that needs to be made right through better legislation, stronger enforcement and compensation to those swindled by BetIndex.