• Jersey-based BetIndex Ltd undergoing operator review
• Company suspended trading on Thursday
• Players fear for millions of pounds deposited on the site

Football Index, the self-proclaimed “the stock market of football” that let customers trade in players, has had its license suspended by the UK Gambling Commission.

The Jersey-based operation BetIndex Ltd announced last Thursday that it was ceasing operations, leaving angry customers unable to deposit or withdraw their funds.

The UKGC said the operating licence of BetIndex Ltd, the Jersey parent company of Football Index, was on hold following “an ongoing section 116 review into the operator, as we had concerns activities may have been carried out in purported reliance on the licence, but not in accordance with a condition of the licence, and that Football Index may not be suitable to carry on with licensed activities.

‘Treating consumers fairly’

“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.”

Football Index woes mounted after a series of crashes in its markets. One came earlier this month when the site changed its terms and conditions, reducing the amount of “dividends” it would pay out when players performed well on the pitch, down from a maximum of 14p per share to just 3p.

Players like Bruno Fernandes of Manchester United were valued at £7.20 a share one day and £1.54 the next.

£60 million

Customers now see no hope of getting their money out of the site. Some estimates say customers could be owed as much as £60 million.

If that’s true, this could be the biggest collapse that Britain’s regulated gambling industry as ever seen.

Meanwhile, Football Index had sponsorship deals with a number of football league clubs. Championship sides Queens Park Rangers and Nottingham Forest have already said they are dropping the logo with immediate effect.

As far as the business goes, it is, publicly at least, still hoping for a positive outcome, including the possibility of a restructure and equity divided between customers who are owed funds.

A statement on the website states: “We are pursuing a restructuring arrangement to be agreed with our stakeholders including, most importantly, our community. We are preparing this through an administration with insolvency practitioners Begbies Traynor, to seek the best outcome for customers with the goal of continuing the platform in a restructured form.

“The restructure could involve equity in BetIndex Limited being distributed to customers, board representation for customers, and a new management team put in place, along with other initiatives.”

Questions in Parliament

The issue does not look like it is going to go away any time soon. It is expected that British Members of Parliament, who sit on the All-Party Parliamentary Group for Gambling Harm, are expected to raise urgent questions about “the biggest disaster to afflict British gamblers in history”.

As the crisis continues to unfold, few would have put money on a football trading site being at the centre of such a financial storm. However, if anything, it shows how well managed licensed online casinos, sports books, poker and bingo sites tend to be.