May 10 hearing
The collapse of Football Index in March came at a high cost to customers, with reports suggesting gamblers could lose more than £90m ($125.3m) altogether. Some users, however, could receive e-wallet reimbursement through a £4.5m ($6.3m) fund.
BetIndex, the UK-based parent company of Football Index, appointed Begbies Traynor LLP as administrator for the ongoing insolvency proceedings last month. The rescue and recovery specialists subsequently applied to the Business and Property Courts of England and Wales to determine how Football Index should distribute money from its player protection account.
the first step towards the distribution of cash balances to customers”
Football Index released a statement on Thursday confirming that the hearing will go ahead at 11:30am on May 10. The soccer gambling business described the court proceedings as “the first step towards the distribution of cash balances to customers of the Football Index platform.”
Calculating the settlements
Jersey-based Football Index allowed its users to purchase stocks in professional soccer players, earning dividend payments depending on a player’s performances or notoriety. The site began operations in 2015, but hit trouble this year when it dramatically slashed dividend payouts in March. The operator lost its UK license and collapsed completely shortly afterwards.
159,075 had an e-wallet balance and should receive a refund
Although Football Index has since had its account for player funds frozen, dividends have continued to mount on the company’s site. As a result, Begbies Traynor has calculated the administration date as starting March 26, meaning affected customers should receive the funds from their e-wallets up to this date. Of the 278,585 Football Index active accounts on that day, 159,075 had an e-wallet balance and should receive a refund.
Unfortunately, customers will still lose out on any portfolio investments. According to a Football Index director, around 34% of customers had small portfolios, 9% had medium portfolios, and 4% had a portfolio considered to be large. Of these large portfolio accounts, at least five had an account balance in excess of £50,000 ($69,630).
Regulator and government pressure
News of the hearing date comes as pressure continues to mount from regulatory authorities. Both the UK Gambling Commission and Jersey Gambling Commision have demanded swift reimbursement for Football Index bettors. This has prompted Begbies Traynor to request a quick resolution to the court proceedings.
While Begbies Traynor might be feeling the heat from the UKGC, the regulator is also facing significant pressure from the UK government. The Commission has faced criticism from MPs for allowing the crisis to develop without intervention, and last month the government announced plans for an independent review into the collapse. This will focus partly on the UKGC’s role in the scandal.