Football Index: UKGC Warned of ‘Dangerous Pyramid Scheme,’ Failed to Act

Football Index was a disaster ready and waiting(p) to happen, according to a written document that described the soccer trading political platform an “exceptionally dangerous pyramid intrigue under the guise of a football game caudex market.”

The document, seen past The Guardian, was authored by an unnamed person “with extended have inward the [gambling] sector.” It was passed to UK Gambling Commission staff inwards Jan 2020, who forwarded it to the regulatory body’s senior executives, according to The Guardian.

But questions testament follow asked virtually why the regulator on the face of it ignored the written document or failed accept it seriously. The author analyzed the Football Index byplay simulate in depth and highlighted underlying flaws that made it allegedly unsustainable. The document recommended that immediate action be taken past the UKGC to protect consumers.

Market Crash

Launched inward 2015, Football Index became a seeable brandmark around English people soccer by publicizing heavily on TV and radio, and through and through T-shirt sponsorship deals with English Football League teams QPR and Nottingham Forest.

Mimicking a caudex market, it allowed users to purchase and switch “shares” inward pro association football players, the value of which would waver depending on metrics similar a player’s on-pitch performances or real-world note value in the soccer carry-over market. Players were and so paid “dividends” based on the carrying into action of their shares.

But ahead of time this month, the troupe proclaimed it would cut down dividends by 80 percent to ensure the platform’s “long-term sustainability.”

This caused the marketplace to wreck and the value of shares to nosedive overnight, forcing the land site offline and leaving users unable to withdraw what was left hand of their balances.

The UKGC suspended the licence of Football Index’s parent company, Bet Index, on March 11, the same mean solar day it went into receivership.

Dangerous Liabilities

But 14 months earlier, the UKGC was warned that the only when way Football Index could afford to run into its liabilities – the dividends it had to pay to users – inwards the long term was “through the constant cut-rate sale of yet to a greater extent young shares to unexampled users alongside a constant quantity churn in positions.”

“Should user development block or decline, the companionship would speedily bump itself unable to pay off these liabilities to users,” continued the report.

This left hand Football Index “vulnerable [to] and destined for a bank building black market in which the firstly ‘X’ per cent of users deal to let some money come out before the scheme collapses and the difference lose everything,” it concluded.

Lawmakers including Labour MP Carolyn Townsend Harris make vowed to require questions inwards Parliament most Football Index and whether the UKGC was delinquent inwards its duty to oversee the company.

The UKGC has countered that piece it is its duty to look at suitability, including financial circumstances, when licensing an operator, it does not “oversee their businesses on a day-to-day fundament or monitoring device the financial wellness of operators straight inwards tangible time.”

“People using gambling operators make out so at their possess risk,” it added.