Soccer ‘Stock Market’ Loses License, Seeks Credit Protection
(Bloomberg) -- The operator of Football Index, the soccer gambling website that calls itself a “virtual stock market,” moved to protect itself from creditors prior to having its license suspended by the U.K. betting regulator following a backlash over a recent move to cut payouts to clients.
Jersey-based BetIndex Ltd. said in a statement on Thursday night it was “pursuing a restructuring arrangement” to be conducted through an administration with insolvency practitioner Begbies Traynor Group Plc. Administration is a form of bankruptcy in the U.K.
The news comes less than a week after the company said it was in talks over a liquidity crunch and that it would slash payouts, or “dividends,” to clients in a move that caused an angry backlash on social media.
In a statement on Friday, Britain’s Gambling Commission said it had concerns that the firm had carried out activities that were not in accordance with a condition of its license “and that Football Index may not be suitable to carry on with licensed activities.” Neither the company, nor Begbies Traynor, were immediately available to comment.
After consulting with external legal and financial advisers, and gambling commissions of the U.K. and Jersey, BetIndex said it decided to suspend the Football Index platform. It acknowledged that the “dividend restructure” devised to assist with the recovery of the business “has not been well received.”
A petition calling for a probe by the Gambling Commission has gained more than 14,000 signatures since the liquidity squeeze was announced.
Football Index users place bets on the future performance of soccer players through a user interface designed to look like a stock market order book.
In 2019, the U.K. advertising watchdog told Football Index to stop falsely presenting its services as an investment product rather than gambling. Asked prior to the company’s latest announcement about the continued use of investing terms on the website, a spokeswoman described the site as a “game” and said all language had been approved by relevant bodies.
Football Index sponsored the English soccer clubs Queens Park Rangers and Nottingham Forest. London-based QPR confirmed in an emailed statement that the Football Index logo would no longer appear on the front of the team’s jerseys. A spokesman for Forest didn’t immediately respond to a request for comment.
The company also had an agreement with Nasdaq for the exchange group to provide Football Index with a cloud-optimized trading engine. A spokeswoman for Nasdaq declined to comment on Friday.
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