The UK Gambling Commission (UKGC) has suspended the licence of betting firm Football Index last week and revealed that it had started a review into the platform in May 2020. While it did not see grounds to suspend its licence last year, this time there was “sufficient evidence to demonstrate that suspension was necessary” said the gambling regulatory body.
Not enough evidence
The UKGC, which regulates betting companies, granted an operating licence to Football Index parent BetIndex back in September 2015. However, concerns over the platform business’s model appeared quickly after its launch. This one was deemed to be unsustainable and endanger the whole sector.
In May 2020, the UKGC started a formal review into the company’s operations, which included accountants and barristers looking into parent BetIndex’s finances and the legal questions over the appropriate regularly framework.
Later, the Commission noted that at this stage of the investigation, it had no evidence to suspend the company’s operating licence, adding that “suspension of a license can […] trigger or hasten the financial decline of an operator and put customer funds at risk”, making clear that the suspension would come as a last resort to protect customer funds.
The last resort
It’s only when Football Index planned to make significant changes to its pay-out system after acknowledging that its previous model was not sustainable, with the intention to restructure and relaunch the business, that the regulator decided to suspend the platform’s licence.
The Commission declared: “We were satisfied that on 11 March suspension was the only regulatory option left available to us.”
Customer funds protected
BetIndex holds a Trust Account that is intended to ensure that all dividends are paid to winning consumers in priority and not distributed to the operator’s other creditors.
The UKGC has also been given the assurance that the payments have been suspended to allow the entitlements of its customers to be calculated.
Nevertheless, it will come to the Court to decide on the matters associated with the funds’ distribution, and not the Commission.