In response to government criticism over the collapse of Football Index, the UK Gambling Commission has pledged to improve a number of its processes, including its regulatory oversight of certain digital products. [Image: Wikimedia Commons]
UKGC takes the blame
When betting site Football Index collapsed earlier this year, it reportedly placed around £90m ($125.4m) of its users’s cash in danger. Now, the UK government is looking for answers as to why the regulatory body in charge of the gambling market could allow such a collapse to happen.
should have done more to protect the betting site’s customers
On Wednesday, MPs published the results of a review into the UK Gambling Commission’s (UKGC) role in the collapse of Bet Index-owned Football Index. Through the review, carried out by Malcolm Sheehan QC, officials determined that the regulatory body should have done more to protect the betting site’s customers in the two years leading up to the crash.
In response to those findings, the UKGC has announed that it plans to make changes to its regulatory oversight in regards to “innovative” digital gambling products. According to Commission CEO Andrew Rhodes, this will include considering the novelty of a product when forming an assessment of a gambling company’s risk.
The findings of the review
UK Government officials began their independent review of the Football Index collapse in April 2021. The investigation looked back as far as September 2015, when Football Index first began operating in the UK market, and up to March 2021, when it eventually entered administration and lost its license.
A statement posted to the UK government website on Wednesday noted three main findings from the review. Officials found that BetIndex did not properly notify the UKGC of the nature of its product in its license application. However, the review also determined that once the UKGC did learn “the full nature” of Football Index in early 2019, it failed to act on the information for the next two years.
Football Index was a betting site through which customers could buy or sell shares of soccer players, much like they would companies on a stock exchange. They then earned dividend payments depending on a player’s performance or notoriety. In March, the betting exchange announced a significant reduction in maximum dividends per share before its eventual collapse.
Added to this, officials also took issue with the handling of the situation by the Financial Conduct Authority (FCA). It urged the body to improve the speed to which its responds to requests from the UKGC and the consistency of messaging on regulatory responsibilities. The Commission has since confirmed that it has strengthened its Memorandum of Understanding with the FCA, thus improving communication between the two bodies.
It’s not over yet
While this week might have brought an end to the government-led review into the Football Index collapse, the trouble is certainly not over for the UKGC.
Earlier this week, a group of MPs called the Parliamentary All Party Betting and Gaming Group (APBGG) announced the beginning of an inquiry into the regulator. The APBGG has asked members of the industry to submit any evidence of the UKGC acting in a way they feel is “unnaceptable of an industry regulator.”
In addition, government officials are currently assessing the regulator’s role as part of their review of the Gambling Act 2005. The Department for Digital, Culture, Media and Sport began the process in December 2020 with officials set to consider reform of a number of gambling-related laws.
Commenting on Wednesday, UK Gambling Minister Chris Philp confirmed that the findings of the Football Index investigation will feed directly into the ongoing Gambling Act review.