{"id":168087,"date":"2021-03-22T05:20:10","date_gmt":"2021-03-22T12:20:10","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=168087"},"modified":"2021-03-22T11:07:23","modified_gmt":"2021-03-22T18:07:23","slug":"football-index-ukgc-warned-of-dangerous-pyramid-scheme","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/football-index-ukgc-warned-of-dangerous-pyramid-scheme\/","title":{"rendered":"Football Index: UKGC Warned of \u2018Dangerous Pyramid Scheme,\u2019 Failed to Act"},"content":{"rendered":"

Football Index<\/a> was a disaster waiting to happen, according to a document that described the soccer trading platform as an \u201cexceptionally dangerous pyramid scheme under the guise of a football stock market.\u201d<\/p>\n

\"Football
A highly visible brand in soccer, Football Index advertised its services on the front of QPR jerseys (pictured). (Image: Kieran McManus\/Shutterstock)<\/figcaption><\/figure>\n

The document, seen by The Guardian<\/em>, was authored by an unnamed person \u201cwith extensive experience in the [gambling] sector.\u201d It was passed to UK Gambling Commission<\/a> staff in January 2020, who forwarded it to the regulatory body\u2019s senior executives, according to The Guardian.<\/em><\/p>\n

But questions will be asked about why the regulator apparently ignored the document or failed to take it seriously. The author analyzed the Football Index business model in-depth and highlighted fundamental flaws that made it allegedly unsustainable. The document recommended that immediate action be taken by the UKGC to protect consumers.<\/p>\n

Market Crash<\/strong><\/h2>\n

Launched in 2015, Football Index became a visible brand around English soccer by advertising heavily on TV and radio, and on player’s jerseys.<\/p>\n

\n

Mimicking a stock market, Football Index allowed users to buy and trade \u201cshares\u201d in professional soccer players. The value would fluctuate depending on metrics like a player’s on-pitch performances, or real-world value in the soccer transfer market. Players were then paid \u201cdividends\u201d based on the performance of their shares.<\/p>\n<\/div>\n

But early this month, the company announced it would slash dividends by 80 percent to ensure the platform\u2019s \u201clong-term sustainability.\u201d<\/p>\n

This caused the market to crash and the value of shares to nosedive overnight, forcing the site offline and leaving users unable to withdraw what was left of their balances.<\/strong><\/p>\n

The UKGC suspended the license of Football Index\u2019s parent company, Bet Index, on March 11, the same day it went into receivership.<\/p>\n

Dangerous Liabilities <\/strong><\/h2>\n

But 14 months earlier, the UKGC was warned that the only way Football Index could afford to meet its liabilities — the dividends it had to pay to users 00 in the long term was \u201cthrough the constant sale of yet more new shares to new users alongside a constant churn in positions.\u201d<\/p>\n

\u201cShould user growth stop or decline, the company would quickly find itself unable to pay these liabilities to users,\u201d continued the report.<\/p>\n

This left Football Index \u201cvulnerable [to] and destined for a bank run in which the first \u2018X\u2019 percent of users manage to get some money out before the system collapses and the remainder lose everything,\u201d it concluded.<\/strong><\/p>\n

Lawmakers including Labour MP Carolyn Harris have vowed to ask questions in Parliament about Football Index and whether the UKGC was derelict in its duty to oversee the company.<\/p>\n

The UKGC has countered that while it is its duty to look at suitability, including financial circumstances, when licensing an operator, it does not \u201coversee their businesses on a day-to-day basis or monitor the financial health of operators directly in real-time.\u201d<\/p>\n

\u201cPeople using gambling operators do so at their own risk,\u201d<\/strong> it added.<\/p>\n","protected":false},"excerpt":{"rendered":"

Football Index was a disaster waiting to happen, according to a document that described the soccer trading platform as an \u201cexceptionally dangerous pyramid scheme under the guise of a football stock market.\u201d The document, seen by The Guardian, was authored by an unnamed person \u201cwith extensive experience in the [gambling] sector.\u201d It was passed to […]<\/p>\n","protected":false},"author":36,"featured_media":168090,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21,10],"tags":[],"acf":[],"yoast_head":"\nFootball Index: UKGC Warned of \u2018Dangerous Pyramid Scheme\u2019<\/title>\n<meta name=\"description\" content=\"Football Index business model unsustainable UKGC told 14 months before it suspended license after the platform collapsed.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/football-index-ukgc-warned-of-dangerous-pyramid-scheme\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Football Index: UKGC Warned of \u2018Dangerous Pyramid Scheme\u2019\" \/>\n<meta property=\"og:description\" content=\"Football Index business model unsustainable UKGC told 14 months before it suspended license after the platform collapsed.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/football-index-ukgc-warned-of-dangerous-pyramid-scheme\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2021-03-22T12:20:10+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-03-22T18:07:23+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/03\/football-index-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1192\" \/>\n\t<meta property=\"og:image:height\" content=\"684\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Philip Conneller\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@casinoorgphilc\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Philip Conneller\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/football-index-ukgc-warned-of-dangerous-pyramid-scheme\/\",\"url\":\"https:\/\/www.casino.org\/news\/football-index-ukgc-warned-of-dangerous-pyramid-scheme\/\",\"name\":\"Football Index: UKGC Warned of \u2018Dangerous Pyramid Scheme\u2019\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/football-index-ukgc-warned-of-dangerous-pyramid-scheme\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/football-index-ukgc-warned-of-dangerous-pyramid-scheme\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/03\/football-index-1.jpg\",\"datePublished\":\"2021-03-22T12:20:10+00:00\",\"dateModified\":\"2021-03-22T18:07:23+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/58769b72851c8cf117fb58ca150ebf8b\"},\"description\":\"Football Index business model unsustainable UKGC told 14 months before it suspended license after the platform collapsed.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/football-index-ukgc-warned-of-dangerous-pyramid-scheme\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/football-index-ukgc-warned-of-dangerous-pyramid-scheme\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/football-index-ukgc-warned-of-dangerous-pyramid-scheme\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/03\/football-index-1.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/03\/football-index-1.jpg\",\"width\":1192,\"height\":684,\"caption\":\"A highly visible brand in soccer, Football Index advertised its services on the front of QPR jerseys (pictured). 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