DCMS deals hammer blow to Football Index consumers' compensation hopes
Nigel Huddleston refutes suggestions of compensating former users from public funds deeming it “not appropriate”
The UK government has controversially quashed the notion of compensating customers impacted by the collapse of the disgraced Football Index (FI) business in March 2021, single-handedly ending the hopes of thousands of former players left out of pocket.
Speaking during a Westminster Hall debate on the same day he failed to reveal when the white paper into the Gambling Act 2005 would be released, DCMS parliamentary under secretary Nigel Huddleston confirmed compensating disadvantaged FI users was not on the government’s agenda.
Huddleston said: “With regard to compensation, as I have said, there are procedures that we cannot move from. It is also very clear that we strongly sympathise – everybody strongly sympathises.
“However, we do not think it would be appropriate for the government to use public funds to cover losses to individuals resulting from the collapse of a gambling company. Consumers staking money on gambling is not the same as their placing money into other things, such as savings products.
“Furthermore, the [UKGC] does not have any statutory powers that would enable it to offer redress for losses suffered as the result of a gambling operator collapsing,” he added.
Huddleston and the government’s contention that as a gambling product, Football Index could not be reimbursed, despite the product frequently being advertised as “the world’s first football stock market” since its debut, as detailed by Liz Twist MP in her opening remarks.
Football Index’s parent company, BetIndex, enjoyed huge financial growth, largely unchecked by the UK Gambling Commission (UKGC), before announcing a huge cut in dividends awarded for media coverage and on-field performances.
This, along with the removal of the instant sell function so that Football Index operated more akin to a peer-to-peer financial stock market, contributed to a crash and customers left struggling to sell their ‘shares’, which were three-year bets on players rather than actual shares.
The fallout, which saw customers lose around £124m in open bets, led to a review led by Malcolm Sheehan QC which laid bare the details into what was the biggest UK gambling industry failure to date.
During the debate, Sarah Owen MP revealed one of her constituents in Luton North, Mr Murphy, had lost £7,000 following the collapse of Football Index.
To date, Mr Murphy has only received £81 in compensation, and Owen relayed his feelings to the assembled MPs and press.
On Mr Murphy’s behalf, she stated: “I want the directors responsible to be made accountable for their actions…I have seen nothing from the government in terms of redress for customers or even how something like this can be prevented in the future.”
Last month it was revealed former Football Index CEO Adam Cole had been blacklisted by the Jersey Gambling Commission from holding any position within a gambling firm licensed by the regulator.
However, the UKGC has yet to make any indication it will serve a similar notice of direction to Cole, or any other former Football Index director.