Worst Fears for Football Index Bettors Realised as Firm Enters Administration

Magnifying Glass on SpreadsheetIt has been a while in coming perhaps, but the worst case scenario for Football Index has finally been realised.

Football Index has entered administration, with its platform closed for business with immediate effect and their license issued by the UK Gambling Commission suspended.

The company has come in for intense scrutiny after sensationally slashing maximum dividend payments to their users by around 80% per day – seeing investment in the platform plummet and shareholders left with considerable losses on their owned players.

That caused widespread disruption and saw prices slashed – Jadon Sancho’s value slumped from £15 per share to £1 overnight.

The decision to cut dividends was covered by Football Index’s terms and conditions, which state that they can lawfully make ‘adverse changes’ to the pay scale as they wish.

However, it has now been revealed that a lack of liquidity has caused the firm’s owners to seek the help of administrators in restructuring the business or, perhaps, winding it up altogether.

A statement from Football Index outlined the regrettable course of action.

“We are pursuing a restructuring arrangement to be agreed with our stakeholders including, most importantly, our community,” it reads.

“We are preparing this through an administration with insolvency practitioners Begbies Traynor, to seek the best outcome for customers with the goal of continuing the platform in a restructured form.”

At the time of writing, deposits and withdrawals from Football Index accounts have been suspended until further notice. And in a further blow, QPR – who FI are a shirt sponsor of – have announced they will drop the brand’s logo from their kit.

The Hoops’ chief executive Les Hoos confirmed:

“As a football club we entered into a one-year agreement with Football Index in good faith. In light of recent events, the front property of QPR’s home and away strips will no longer sport the Football Index logo.”

Will Football Index Customers Get Their Money Back?

Football Index Screenshot

That’s the million dollar question.

A petition with more than 5,000 signatures has been raised by customers seeking financial restitution, and others are urging the UK Gambling Commission to investigate the firm’s operations.

As part of their licensing, Football Index have ‘medium’ level protection in place should they go bust, which states: ‘There are arrangements (e.g. insurance) to make sure that the money in separate accounts is given to customers if the company goes bust.’

While these ratings – there’s also ‘no protection’ and ‘high protection’ – are not decided by the UKGC, they can act when they believe the operator in question is inaccurate.

So, on that basis, Football Index users may just be able to get some of their money back, and there could be further good news following the latest news release from the beleaguered betting firm. There is the possibility of ‘equity in BetIndex Ltd [the parent company of Football Index] being distributed to customers.’

A management restructure has also been mooted, plus the possibility of ‘board representation for customers’, although these are assumptions that the company will be a) able to continue trading and b) be granted their UKGC licence once again.

Our article on what happens when a betting company closes down can be found here.