UK MPs criticise Gambling Commission’s “risky” decision to licence Football Index
A debate on the collapse of Football Index was highly critical of the British gambling regulator.
UK.- UK MPs have criticised the Gambling Commission in a debate on the collapse of Football Index. The football player trading platform run by BetIndex entered administration last year, with customers losing £90m in deposits, the House of Commons heard.
Conservative MP Aaron Bell said the Gambling Commission may have misled the public by licensing the Football Index.
He said: “My five constituents – all young men – believed, because they saw the kitemark, that the Gambling Commission understood, and almost endorsed, the product. Obviously it did not.
“If we licence these sorts of products, then we ought to be standing behind them. We are not standing behind them now, as they are struggling to get any sort of compensation at all, although there is obviously an administration process going on.”
Labour Party MP Jessica Morden said: “[Football Index] modelled itself as an investment package, and in an utter failure of regulation by the Financial Conduct Authority and the Gambling Commission, customers felt wrongly assured that their long-term investments in the index were secure. The Gambling Commission was aware that these investments were more risky than customers thought.”
Meanwhile, SNP MP Ronnie Cowan said: “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.
He added: “The Gambling Commission ignored warnings that its business model was flawed and that customers’ money could be at risk.”
Plaid Cymru MP Ben Lake said customers had lost their funds because of failings on the part of the regulator. He proposed the creation of a system to refund lost funds using money raised from the fines collected by the Financial Conduct Authority and the Gambling Commission.
He noted that the Gambling Commission has issued £58m in of fines between June 2014 and December 2019. However, the parliamentary under secretary of state at the Department for Digital, Culture, Media and Sport, Nigel Huddleston, noted that Gambling Commission fines are directed to social responsibility initiatives.
Andrew Rhodes, the Gambling Commission’s new chief executive, has defended the regulator’s role and responded publicly to questions about the case. Writing in a blog post, he denied claims that the Gambling Commission had licensed a product it didn’t understand, but said BetIndex had added functionalities that were not part of its licence terms, including allowing users to sell bets.
BetIndex’s administration process is still underway, with the fate of active bets at the time of the company collapse still to be decided. Meanwhile, Adam Cole, founder of Football Index, has been blacklisted by the Jersey Gaming Commission.
Cole will not be allowed to hold any position at any business licensed by the regulator following an investigation into his “fitness and propriety”. The commission has backdated its decision to April 6. Cole left his role as CEO of Football Index in December 2020 just months before it collapsed and its owner BetIndex went into administration
