Some accuse<\/a> Football Index of being little more than a Ponzi scheme and are mulling class action against the site.<\/p>\n\u201cThis case further reinforces the need for our comprehensive review of gambling laws,\u201d said The Times\u2019<\/em> \u201cgovernment source.\u201d \u201cThis independent investigation into Football Index will feed into that work, and if we need to make changes to regulation to protect people, we will.\u201d<\/p>\n\u201cSomething appears to have gone very wrong here,\u201d the source added.<\/p>\n
Soccer\u2019s \u2018Stock Market\u2019<\/strong><\/h2>\nLaunched in 2015, Football Index marketed itself as a soccer \u201cstock market\u201d where users could buy and sell notional \u201cshares\u201d in professional soccer players.<\/p>\n
The value of these shares would fluctuate, depending on factors like the football star’s on-field performances or actual value in the real-world transfer market. Successful traders were paid \u201cdividends\u201d based on the performance of their shares.<\/p>\n
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The brand, advertised widely on television and radio, sponsored the jerseys of two English Football League teams, QPR and Nottingham Forest. \u00a0<\/strong><\/p>\n<\/div>\nIts board was populated with veteran betting industry execs like Brian Mattingley, the former chairman of 888 Holdings, now chairman of Playtech, and Mark Blandford, the founder of Sportingbet, who was also among the company\u2019s biggest shareholders.<\/p>\n
The site promoted itself as the \u201csmart\u201d alternative to sports betting, where users were supposedly less exposed to risk.<\/p>\n
Flawed Model<\/strong><\/h2>\nBut unlike investing in a company, which has real, underlying value, Football Index\u2019s shares were purely notional.<\/p>\n
This meant the business model relied on the constant sale of more shares and for its growth rate to exceed its churn rate. Otherwise, it would find itself top-heavy with successful players and unable to pay its liabilities, or dividends.<\/p>\n
Sure enough, when the company announced it would be cutting dividends to ensure \u201clong-term sustainability,\u201d user panic set in and the market crashed. \u00a0\u00a0\u00a0<\/strong><\/p>\nPlayer accounts were decimated. Average individual losses are thought to be around \u00a33,000 ($4,120) each.<\/p>\n
The UK government is currently undertaking a review of the country\u2019s gambling laws, which have been criticized as being too liberal. Regulations are expected to be tightened in the coming year.<\/p>\n","protected":false},"excerpt":{"rendered":"
The UK government will launch an independent investigation into the Football Index collapse, sources have told The Times. The soccer trading platform tumbled into insolvency overnight on March 5, resulting in collective losses for its users of almost $100 million ($138 million). Many of those users are now demanding answers about Football Index\u2019s business model […]<\/p>\n","protected":false},"author":36,"featured_media":170534,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21,1074],"tags":[],"acf":[],"yoast_head":"\n
Football Index Facing Government Inquiry into \u2018Flawed\u2019 Business Model<\/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