Football Index Collapse

Mick Whitley Excerpts

Tuesday 7th June 2022 Westminster Hall

[Mick Whitley (Birkenhead) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Ghani. I thank my hon. Friend the Member for Blaydon (Liz Twist) for securing this important debate.

The collapse of Football Index in March 2021 left a trail of human misery in its wake. Some £90 million-worth of open stakes has vanished, with an average loss of £3,000 per customer—a life-changing sum for anyone. For some of the people I represent, however, those losses have been far greater still. I have heard from pensioners whose entire life savings have been snatched away, and from constituents who lost more than £100,000 when the platform collapsed. My constituents are not stupid, and nor are they gamblers whose luck simply ran out. They are victims of an unscrupulous, if not outright criminal, scheme that wilfully misled the Gambling Commission, pedalled lies about the state of its financial health, violated the terms of its licence and cynically preyed on fans’ passion for the beautiful game. They deserve so much better than the condescension that has accompanied Football Index’s demise.

Few have been quite as tone-deaf as the chief executive officer of the Gambling Commission, Andrew Rhodes, who had the temerity to lecture victims still coming to terms with their losses by saying that

“no one should gamble more than they can afford to lose.”

In fact, Rhodes and the commission he oversees still have serious questions to answer about their role in this whole saga, because if this is a story about unchecked greed, it is also a story of chronic regulatory failings. The Gambling Commission issued a licence for a product that it did not understand, and ordinary customers were forced to pay the price. Despite receiving warnings about systemic flaws with the index in January 2020, it was not until May 2020 that the commission began investigating. In that time, Football Index signed a sponsorship deal with Queen’s Park Rangers, lending further legitimacy to this elaborate pyramid scheme.

The simple truth is that thousands of Football Index consumers were failed by the very people who were supposed to protect them. My constituents now deserve justice, but despite the publication of the independent review in September last year, it still seems to be a long way away. Successive announcements by both DCMS and the Gambling Commission that no compensation will be made available will come as a bitter blow to people living in my constituency, whose lives have been changed irrevocably as a result of the collapse, and the continued existence of platforms seemingly mimicking Football Index’s business model—including AllStars Trader, which is run by a former Football Index employee —shows that not nearly enough is being done to stop the catastrophe repeating itself. The fact that Football Index was allowed to trade without any oversight from the Financial Conduct Authority, despite styling itself as a trading platform, shows just how badly regulatory reform is needed.

Football Index was not the only app that encouraged ordinary people to hand over small fortunes with the promise of massive returns. In recent years we have seen a massive upsurge in a number of online trading platforms becoming available to ordinary people, such as eToro, Freetrade and Robinhood. Like Football Index, those apps promise ordinary people a way to break into a world previously dominated by big banks and the mega-rich. Those sites, although legal, tempt ordinary people into ploughing massive sums of money into investments that they often have no hope of understanding. Many even model themselves on video games, with users receiving constant pushes to keep investing more.

Despite the obscene amounts of money involved, Ministers are still playing catch-up, and today the world of online investments resembles the wild west, with ordinary people enjoying little to no protection from financial ruin. Without far-reaching reform of the regulations governing those platforms, I fear that the Football Index scandal is doomed to repeat itself. Ministers must act now.