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
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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>\nThe 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>\nBut 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>\nLawmakers 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":"\n
Football Index: UKGC Warned of \u2018Dangerous Pyramid Scheme\u2019<\/title>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\t\n\n\n\n\n\n\t\n\t\n\t\n