Sat, 13 Mar 2021 | ADMINISTRATION
The Gambling Commission has announced that it has suspended the licence of online betting operator Football Index following a market crash that prompted the business to fall into administration.
The operator revealed that it has suspended the company's platform as a result of its collapse, preventing traders from withdrawing their funds. The company has subsequently confirmed that it is seeking to settle a restructuring arrangement via insolvency practitioners Begbies Traynor, which it hopes will allow it to satisfy all corporate stakeholders.
Launched in 2015, Football Index is an online platform that mimics the stock market by allowing users to trade in "shares" of football players. Traders would receive dividends based on the performance of the players, while share prices could also rise and fall.
The news of the company's suspension follows a decision by the operator to significantly reduce dividends on individual transactions, which reduced player valuations and resulted in losses of thousands of pounds for some traders. This move prompted many users to withdraw their funds and left the company unable to sustain the business.
In a statement released shortly after the company's collapse, Football Index said: "The dividend restructure announced on Friday was a necessary step in a business recovery plan to seek the long-term sustainability of the platform. However, it is clear that this has not been well received and we need to find a more agreeable way forward.
"We are pursuing a restructuring arrangement to be agreed with our stakeholders including, most importantly, our community."
In response to Football Index's decision, the Gambling Commission suspended the company's licence and expressed concerns that the company "may not be suitable to carry on with licensed activities".
Issuing a statement, the governing body added: "We have made it clear to the operator that as the investigation progresses, we expect it to focus on treating consumers fairly and keeping them fully informed of any developments which impact them."
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