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Football Index Collapse
07 June 2022
Lead MP
Liz Twist
Blaydon and Consett
Lab
Responding Minister
Nigel Huddleston
Tags
NHSEconomyCulture, Media & SportBusiness & TradeMental Health
Word Count: 9664
Other Contributors: 17
At a Glance
Liz Twist raised concerns about football index collapse in Westminster Hall. A government minister responded.
Key Requests to Government:
I urge the Minister to commit to a meeting with the Football Index action group and myself to discuss outstanding issues. Furthermore, I ask for another in-depth report or inquiry into regulatory failures, showing support for those affected. Lastly, I request that the Government look at bringing forward a redress scheme for Football Index victims.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
Football Index's collapse has significantly damaged many customers, leading to financial losses exceeding £124 million for tens of thousands of individuals. This situation not only impacts their financial stability but also affects their mental health and wellbeing. The regulatory failures highlighted by the Sheehan report reveal that both the Gambling Commission and Financial Conduct Authority were negligent in overseeing Football Index's operations. These failings allowed customers to continue investing money into an inadequately regulated platform, exacerbating the losses.
Aaron Bell
Con
St Ives
I am concerned about the failure of the Gambling Commission to identify and regulate Football Index properly. Five constituents have lost thousands of pounds due to the collapse of Football Index, which looks like a Ponzi scheme. There is a need for better protection for people against such schemes. In an intervention, he thanked Sarah Green for the opportunity to clarify that the new CEO of the Gambling Commission understands past issues with Football Index regulation.
Alison Thewliss
SNP
Glasgow Central
I am concerned about the significant sums lost by constituents who invested in Football Index, which they believed was a regulated and safe product. The regulatory failure led to people losing their life savings due to a lack of clear responsibility between the Gambling Commission and the FCA.
Clapham and Brixton Hill
Agrees that securing redress for Football Index collapse victims includes addressing emotional and psychological damage as well as financial losses. Agreed with Liz Twist's points about regulatory failings and their impact on constituents' wellbeing, not just financially. Highlighted the need for compensation and redress for those affected.
Ben Lake
PC
Ceredigion Preseli
Mr Lake expressed concern over the devastation caused by Football Index to his constituents, highlighting instances of people losing savings for marriages and deposits for first homes. He criticized regulators such as the Gambling Commission and Financial Conduct Authority for their failure to understand and effectively scrutinize the platform, leading to a lack of timely action despite warnings from insiders. Mr Lake also questioned why funds levied by regulators could not be used to contribute towards financial redress for Football Index users.
Clive Lewis
Lab
Norwich South
Urges the Government to reconsider financial redress in light of severe impacts on constituents' wellbeing, including home and business losses due to failures by regulators.
Asked if the Government should step in to address regulatory failures as mentioned by Alison Thewliss, suggesting that only the Government can rectify such issues. Mr Howarth questioned whether compensation from BetIndex's liquidation would be sufficient and suggested that Government intervention might be necessary, possibly through fines as proposed by Mr Lake.
Greg Knight
Con
Welwood
Congratulates the hon. Lady on securing the debate and asks if she supports an early-day motion from November 2021, calling for full reimbursement to those owed money.
Jeff Smith
Lab
Manchester Withington
Mr Smith highlighted the severe impact of Football Index's collapse on constituents, noting financial losses and mental health issues. He criticised regulatory failures by BetIndex and the Gambling Commission, urging the Minister to address concerns about the adequacy of their investigation. Mr Smith also called for an urgent release of the gambling White Paper to prevent future scandals.
Jessica Morden
Lab
Newport East
I highlight the significant losses suffered by constituents in Newport East due to the collapse of Football Index, amounting to £124 million. There are serious regulatory failings from both the Gambling Commission and Financial Conduct Authority regarding this investment package.
Jim Shannon
DUP
Strangford
Mr Shannon asked whether the investigation should pursue directors of Football Index, noting that some employees had salaries of £1 million despite the company employing only 100 people.
Justin Madders
Lab
Ellesmere Port and Bromborough
He emphasised the severe impact on individuals, noting losses into seven figures and instances where people were driven to suicide. He questioned the effectiveness of past regulation and demanded clear delineation of regulatory responsibility.
Mick Whitley
Lab
Cynon Valley
The collapse of Football Index left a trail of human misery with some £90 million-worth of open stakes vanishing, and an average loss of £3,000 per customer. Constituents have lost their life savings to the platform's unscrupulous scheme that misled the Gambling Commission and violated its licence terms.
Patricia Gibson
SNP
North Ayrshire and Arran
Football Index customers were not properly protected, as the Gambling Commission ignored warnings about the platform's business model. The commission failed to carry out due diligence leading to significant losses of around £90 million for unsuspecting customers.
Mr Cowan emphasized the need for wholesale reform in the gambling industry, highlighting BetIndex's failure to properly notify the Gambling Commission about its product and questioning why warnings were ignored. He stressed the importance of better protection for consumers through measures such as a gambling ombudsman and called for compensation from public funds for those who have lost money. Mr Cowan pointed out the potential for DCMS to impose a levy under section 123 of the Gambling Act 2005 for compensating those affected by Football Index's collapse.
Ruth Cadbury
Lab
Brentford and Isleworth
Highlighted the £124 million lost due to Football Index's business model, which was a Ponzi scheme allowed by regulatory failures. Emphasised that it took over a year for regulators to act after warnings were given.
Sarah Green
Lib Dem
Chesham and Amersham
She highlighted the regulatory deficiency that allowed Football Index to operate, citing a constituent who lost £13,000 and another who lost £50,000. She urged for clearer regulation and consumer protection.
Sarah Owen
Lab
Luton North
Thanked her Friend for raising fairness and justice issues. A constituent lost £7,000 with only £81 returned and wants the Directors responsible made accountable; requests the Minister to address prevention measures and justice.
Government Response
Nigel Huddleston
Government Response
I thank the hon. Member for Blaydon (Liz Twist) for securing this debate and acknowledge the collapse of Football Index, apologising on behalf of my colleague who could not attend due to parliamentary duties. I outline the history of BetIndex's licensing by the Gambling Commission in September 2015, detailing the increasing scrutiny from May 2019 onwards and the subsequent licence suspension and company administration in March 2021. The minister highlights that the Gambling Commission initiated an independent review into the regulation of Football Index, led by Malcolm Sheehan QC, which identified areas for improvement, particularly regarding decision-making speed and novel product assessment. Actions taken include updating risk assessment methods, publishing consultations on licensing policies, and enhancing cooperation between the Gambling Commission and FCA through a strengthened memorandum of understanding. The minister explains that although both bodies have implemented changes, compensation from fines to affected customers is not feasible under current laws due to legal requirements for funds placement into the Consolidated Fund or use for socially responsible purposes by the Gambling Commission. He further mentions ongoing administration proceedings and an Insolvency Service investigation into BetIndex's directors' conduct. The minister reiterates that while the government sympathises with those impacted, it does not believe using public funds is appropriate to cover individual losses from gambling collapses.
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.