{"id":175985,"date":"2021-06-09T16:21:36","date_gmt":"2021-06-09T23:21:36","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=175985"},"modified":"2021-06-09T16:37:53","modified_gmt":"2021-06-09T23:37:53","slug":"football-index-scandal-high-court-approves-repayment-of-3-5-million","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/football-index-scandal-high-court-approves-repayment-of-3-5-million\/","title":{"rendered":"Football Index Scandal: High Court Approves Repayment of \u00a33.5 Million in Player Funds"},"content":{"rendered":"

Some \u00a33.5 million ($5 million) held in a Football Index<\/a> \u201cplayer-protection account\u201d can now be redistributed to 280,000 former customers of the stricken soccer trading platform, London\u2019s High Court has ruled.<\/p>\n

\"Football
Football Index was a highly visible brand in UK soccer, sponsoring the jerseys of English Football League team Queens Park Rangers (pictured). (Image: Scottish Sun)<\/figcaption><\/figure>\n

The account was held by a third party and kept separate from the company\u2019s operating costs. It will now be turned over to administrator Begbies Traynor to reimburse players who still had funds on the platform when it collapsed in March.<\/p>\n

It\u2019s a drop in the ocean compared with the estimated \u00a3100 million ($138 million) that players lost in the aftermath of Football Index\u2019s demise. Some individual losses ran into hundreds of thousands of pounds.<\/p>\n

It is still to be determined how customers who had active bets when their accounts were frozen will be repaid from the remaining money in the fund. But it\u2019s likely these claims will be prioritized over players who were simply owed \u201cdividends\u201d by the company.<\/p>\n

Soccer\u2019s Flawed \u2018Stockmarket\u2019<\/strong><\/h2>\n

Launched in 2015, Football Index marketed itself as a soccer \u201cstock market.\u201d Users could buy and sell notional \u201cshares\u201d in professional soccer players, which would fluctuate in value, depending on various real-world factors.<\/p>\n

Successful traders were paid \u201cdividends\u201d based on the performance of their shares. But critics say the company\u2019s business model was flawed, and that it overextended itself by overpaying successful traders.<\/p>\n

\n

Court documents showed that by the summer of 2020, Football Index was dependent on attracting new deposits to pay its liabilities to winning players.<\/strong><\/p>\n<\/div>\n

It initially increased its dividend payments in a bid to attract more new depositors. And when that didn\u2019t work, it announced it would slash dividends by 80 percent to ensure \u201clong-term sustainability.\u201d<\/p>\n

Panic Ensues<\/strong><\/h2>\n

The platform\u2019s customers panicked, and in the ensuing stampede to cash out, the market crashed. Average individual losses are estimated to be around \u00a33,000 ($4,120 USD) each.<\/p>\n

According to court filings, the company appointed insolvency specialist Begbies Traynor three weeks before its collapse. But it continued to encourage customers to deposit money.<\/p>\n

\n

\u00a0Previously, Football Index had continually reassured users about its financial health, especially during the pandemic. It also claimed to be less risky and more \u201cresponsible\u201d than traditional betting companies.<\/strong><\/p>\n<\/div>\n

But ultimately, the company’s business model relied on the constant sale of more shares, and for its growth rate to exceed its churn rate, something that could never be guaranteed.<\/p>\n

Government Review Launched<\/strong><\/h2>\n

On Monday, UK lawmakers announced they had appointed barrister Malcolm Sheehan QC to lead an independent review into the Football Index affair. The inquiry will examine whether there were failures of oversight by the UK Gambling Commission.<\/p>\n

The regulator has said it launched an investigation into Football Index a year before its collapse, but feared suspending its license would have exacerbated its financial problems, immediately placing consumers at greater risk.<\/p>\n","protected":false},"excerpt":{"rendered":"

Some \u00a33.5 million ($5 million) held in a Football Index \u201cplayer-protection account\u201d can now be redistributed to 280,000 former customers of the stricken soccer trading platform, London\u2019s High Court has ruled. The account was held by a third party and kept separate from the company\u2019s operating costs. It will now be turned over to administrator […]<\/p>\n","protected":false},"author":36,"featured_media":175986,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21,1074],"tags":[],"acf":[],"yoast_head":"\nFootball Index Scandal: High Court Approves Repayment of \u00a33.5 Million<\/title>\n<meta name=\"description\" content=\"Football Index players will begin to receive repayments from a player-protection account, thanks to High Court ruling on Tuesday.\" \/>\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-scandal-high-court-approves-repayment-of-3-5-million\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Football Index Scandal: High 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