A report of the UK Government into the collapse of the popular soccer trading platform Football Index has criticised the gambling and financial regulatory bodies in the country. According to the report, called the Independent Review of the Regulation of BetIndex Limited, the UK Gambling Commission (UKGC) failed to understand how complex the new betting product was, as well as the regulation of such product so that it granted the company the wrong type of operating licence.
As Casino Guardian previously reported, Football Index was earmarked as a virtual stock market that provided football fans with the opportunity to purchase and sell notional shares in professional football players. These shares’ value would rise and fall depending on the actual performances of the players who were represented by them, and traders would be given so-called dividends that were the payouts based on the performance of their shares.
The new type of betting service unveiled for a market that has already been packed with various forms of gambling helped Football Index become an easily recognisable brand in the UK gambling sector, with massive advertising campaigns aired on radio and television channels. The operator also sponsored two clubs from the English Premier League (EPL) – the Queens Park Rangers F.C. and Nottingham Forest F.C.
As a result of the damning report which put much of the blame for poor regulation of Football Index to the UKGC, the gambling regulator has announced that it will be implementing certain changes to the way innovative digital gambling products and services are regulated.
New Gambling Products and Services Get More Complex to Regulate
Recently, regulation of the sector has become more difficult because both the business models and product offerings have been getting more complex, not to mention the fact that the lines between gambling and other types of products have been blurred. All of this has made the existing regulatory procedures no longer suitable to control the newest products in the sector, as some of the services cannot fit into the statutory definitions provided by the regulators.
Andrew Rhodes, the new CEO of the UK Gambling Commission, who has been occupying the position since June, shared that there was no amount of explanation of the recent collapse of Football Index that could make customers less angry or anxious about the negative consequences they have been suffering after the gambling operator’s tumble.
Mr Rhodes shared that the UKGC accepted the accusations that it should have put more effort into investigating the gambling company but still, its efforts would not mean that the customers of Football Index would not have lost any money in the operator’s collapse. He further noted that the watchdog had sought the best outcome for customers, as much as its regulatory powers allowed.
As mentioned above, the statement was made after the publication of the Independent Review of the Regulation of BetIndex Limited that highlighted certain areas where the approach used both by the UKGC and the Financial Conduct Authority (FCA) could be improved. The UK gambling regulator’s CEO said that the review provided some helpful recommendations for how the two watchdogs could work in collaboration and improve their regulatory approach, especially when it comes to new gambling products or services.
- Author
Daniel Williams
