Commons Sense

House of Commons · Westminster Hall

Football Index Collapse: Lessons Learned — [Mrs Sheryll Murray in the Chair]

24 April 2024 · 9 other contributors · 11,299 words

Opened by Liz Twist Lab Blaydon and Consett

Responding minister: Stuart Andrew

Culture, Media & Sport

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Liz Twist raised concerns about football index collapse: lessons learned — [mrs sheryll murray in the chair] in Westminster Hall. A government minister responded.

Key points

  • Concerns raised about the collapse of Football Index affecting tens of thousands of people in the UK, with losses amounting to 124 million.
  • The Sheehan report highlights regulatory failures by both the Gambling Commission and the Financial Conduct Authority.
  • The Minister is urged to commit to independent scrutiny of the evidence and to prevent future issues with similar platforms like KiX.

Key requests to Government

The Minister is urged to commit to proper independent scrutiny of all the available evidence on Football Index and ensure that any future football platforms like KiX cannot be launched without learning from the lessons of the Football Index scandal. Liz Twist also asks for an update on compensation plans for victims and actions taken regarding the new platform, KiX.

How the debate unfolded

MPs spoke in turn to share their views and ask questions. Here's what each person said.

Opened the debate

Liz Twist Lab Blaydon and Consett

The collapse of Football Index affected tens of thousands of people across the UK, many losing substantial amounts of money. Regulatory failures from both the Gambling Commission and the Financial Conduct Authority were highlighted by the Sheehan report, indicating that if the platform had been taken down in 2019, it could have saved customers huge amounts of money. Victims are still dealing with financial difficulties, stress, anxiety, and depression, amounting to as much as £124 million in losses.

Other contributors (9)
  • Alex Sobel Lab Co-op Leeds Central and Headingley

    Concerned about a new platform called KiX, modelled on Football Index and involving one of its founders, Alex Sobel calls for the FCA and Gambling Commission to look into it at an early stage to prevent another regulatory failure.

  • Barbara Keeley Lab Worsley and Eccles South

    Barbara Keeley highlighted the impact of Football Index's collapse on her constituents, one losing £20,000. She cited failings by BetIndex Ltd in notifying the Gambling Commission and shortcomings in regulatory oversight by both the Gambling Commission and Financial Conduct Authority. Concerns were raised about financial literacy and potential risks posed by new platforms like KiX. She emphasised that the Gambling Commission's credibility is now questionable given the significant losses incurred by individuals. She questioned whether KiX, a new platform based on Football Index, can be considered gambling and highlighted the inconsistency in defining compensation for gambling losses.

  • Gill Furniss Lab Sheffield Brightside and Hillsborough

    The speaker highlighted the issue of gambling addiction, particularly among young people in her constituency. She criticised the ongoing sponsorship deals between football teams and platforms like Football Index, which contributed to misleading consumers about the nature of their products. The speaker called for an investigation into KiX, a platform that replaced Football Index, and urged the government to introduce a cross-sport gambling sponsorship code of conduct as soon as possible.

  • Gregory Campbell DUP East Londonderry

    He thanked the hon. Member for giving way and congratulated her on securing the debate, expressing concern about gambling companies sponsoring Premier League teams, which he believes contributes to young people associating their heroes with the gambling industry.

  • Jim Shannon DUP Strangford

    Mr. Jim Shannon thanked the hon. Member for Blaydon for bringing forward the debate and emphasized the importance of the issue due to its impact on constituents who have lost money from the collapse of Football Index. He highlighted the need for consumer protection, the importance of gambling awareness, and called for a legislative change regarding regulation by the Financial Conduct Authority (FCA). Mr. Shannon mentioned that the FCA's view was that all products fell within their regulatory perimeter until the company collapsed in March 2021.

  • Justin Madders Lab Ellesmere Port and Bromborough

    He criticised the regulatory failures surrounding Football Index, highlighting cumulative losses of up to £134 million for thousands of customers. Justin Madders emphasised the need for stricter consumer protection measures, citing multiple investment scandals where people's life savings were lost due to inadequate regulation. He mentioned that executives were warned about the unsustainability of Football Index as early as 2016 and criticised the FCA's indecisiveness in regulating the product. Madders also raised concerns over new schemes like KiX, questioning whether they should be regulated by the FCA or Gambling Commission.

  • Patricia Gibson SNP North Ayrshire and Arran

    Football Index's collapse in 2021 led to significant losses for thousands of users who were misled into believing they were investing rather than gambling. The platform was akin to a pyramid scheme and the Gambling Commission failed to act despite warnings, allowing the product to masquerade as an investment without proper regulation. Constituents have faced life-changing financial consequences due to this regulatory failure. She pressed the Minister to consider David Hammel's suggestion from the Football Index action group regarding a route to deliver compensation without using taxpayer funds directly.

  • Ronnie Cowan SNP East Renfrewshire

    Ronnie Cowan intervened, expressing concern that gambling products operate in regulatory grey areas to exploit consumers. He criticised the lack of clear regulations and suggested that new schemes like KiX aim to extract money from users rather than provide an enjoyable experience for football fans. The intervention by Ronnie Cowan suggested that the £90 million lost through the collapse of Football Index was not truly lost but is in someone's possession, and there should be a way to identify and return this money to those who lost it. Asked if the Gambling Commission alone will decide on licensing for a new football cryptocurrency trading project, KiX, mirroring Football Index.

  • Stephanie Peacock Lab Barnsley South

    Paid tribute to the debate's lead, highlighted that Football Index's collapse cost £90 million and left many users destitute. Criticised the misleading nature of the platform and the regulator's inadequate response to early warnings in 2019. Raised concerns over the launch of a similar platform by a co-founder of Football Index, questioning why he was allowed to continue operations.

Government Response

Stuart Andrew

It is a pleasure to serve under your chairmanship, Mrs Murray. I thank the hon. Member for Blaydon (Liz Twist) for tabling this debate and acknowledge her contribution to ensuring that these events receive attention. The Government appreciate the impact of Football Index's collapse on consumers and sympathise with those affected financially. Today's debate has been valuable and I commend all contributors for their thoughtful comments, highlighting the serious consequences of the collapse. The independent review of Football Index by Malcolm Sheehan KC identified areas where the Gambling Commission could have been more effective in responding to challenges posed by novel products and highlighted where the FCA could have co-operated more effectively with the commission. The report recommended that both bodies enhance their scrutiny of such products, prompt decision making, quicker internal escalation, greater scrutiny of product features, and additional liquidity requirements for longer-term tradeable bets. The Gambling Commission has taken various actions to implement these recommendations, including updating its statement of principles for licensing and regulation in June 2022, increasing resources available to ensure licensees disclose notifiable changes to products, changing its approach to licensing novel products where long-term bets might appear more like financial products, and enhancing the risk assessment process. The FCA has also implemented all the recommendations from the report, improving speed and consistency of decision making. An updated memorandum of understanding addressing all review's recommendations was agreed between the commission and the FCA in November 2022, establishing a process for co-operation and escalation, creating relationship owners to oversee operations, requiring quarterly minuted meetings, and providing an avenue for escalation. The minister also addressed issues around advertising, progress on gambling White Paper reforms, new product KiX, and engagement with the Gambling Commission and FCA regarding individuals previously involved in Football Index. He reiterated that both bodies are proactively monitoring potential products attempting to replicate Football Index and will take appropriate risk-based action if any activities fall within their remits. The minister concluded by thanking everyone for contributing to the debate and ensuring clarity about lessons learned from Football Index's collapse, actions taken by Government, Gambling Commission, and FCA.

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