GAME OVER? FOOTBALL INDEX COLLAPSES & ENTERS ADMINISTRATION

UK-based football trading platform Football Index has collapsed, suspending its platform and entering administration. 

The company, which is licensed by the UK Gambling Commission, has confirmed that all trading and payments will be suspended until further notice. 

Styled as a “stock market for footballers,” Football Index had faced a spiraling crisis over the last few months, as liquidity dried up and prices collapsed – with problems worsened by the impact of the COVID-19 crisis on football. 

As reported earlier this week, the company had been forced to disable comments on its Twitter feed after anger started boiling over among users following a move to slash dividends. It is thought that many users have lost significant sums on the platform over the past few months, with some users reported to have invested six-figure stakes in the platform.

Football Index has released a statement saying: ““The Board of BetIndex Limited has consulted with external legal and financial advisors, and the UK and Jersey Gambling Commissions. The decision has been made to suspend the platform.

“The dividend restructure announced on Friday was a necessary step in a business recovery plan to seek the long-term sustainability of the platform. However, it is clear that this has not been well received and we need to find a more agreeable way forward.

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

AYO.NEWS says:

Although Football Index has broached several possibilities with a view of saving the platform, including equity being shared among customers, a new management team, and board representation for users, it’s hard to see how the platform can possibly recover from this. 

At the end of the day, the fundamental flaws and risks, which were clearly not appreciated by many users, of the platform’s basic business model have been revealed. With trust absolutely shot to pieces, anger sure to grow as the scale of losses dawns on people, plus a popular press that is likely to crucify everyone involved in the project, we’d say “put a fork in it” because Football Index is done. 

And, let’s not forget, many have already questioned the way that Football Index has marketed itself, giving the impression it is more of an investment tool than gambling product. With anti-gambling sentiment at an all-time high in the UK, and the Gambling Act Review currently underway, the fallout from this collapse could affect far more than just Football Index.

Will we see a phoenix rise from the ashes or is this the end for the “football stock market?”