Football Index has entered administration following changes to the trading platform implemented last weekend.
This morning, the trading platform Football Index announced it has entered administration and is suspending trades on its platform.
In a player update, the platform stated the decision had been made following consultation with external legal and financial advisors, and the UK and Jersey Gambling Commissions.
Football Index enters administration
This morning, the trading platform announced it is seeking a “restructuring arrangement” in order to satisfy all stakeholders as well as players.
The company has recruited insolvency practitioners Begbies Traynor to help find the best possible outcome for its customers. This will involve maintaining the trading platform in a “restructured form.”
According to the update: “Until such time as the administrators are in office, the platform will remain suspended and no trading or payment transactions, such as deposits and withdrawals, will be possible.
“Once in office, the administrators will be in contact with customers, creditors, and other stakeholders. This interim step of suspending the platform is merely to ensure that everyone’s rights are preserved in relation to funds held by BetIndex Limited.”
The trading platform reassured its customers that existing cash balances had been moved to a “segregated account” which is being safeguarded by administrators who would communicate with users to discuss liability.
The statement continued: “The Board have at all times been seeking the best way to sustain the platform as we believed a recovery was not only possible but also in the best interests of our customers. This decision is deeply regrettable, and is the outcome we were seeking to avoid by restructuring dividends. However, we believe it is the most responsible route forward for our community given the situation as it has developed.”
Why is Football Index suspending operations
Last weekend, the football player stock exchange made the decision to reduce the dividends paid for each player transaction. This led to a significant drop in asset value (player price) and the returns for customers.
A statement made prior to the decision to reduce dividends said: “In consultation with our legal and financial advisors we have had to make the very difficult decision that in order to ensure the long-term sustainability of the platform we simply must reduce Dividends. As such, in accordance with our terms, we are giving 30 days’ notice regarding this change.
“This decision is not one that we have taken lightly. The Board deliberated at length, and we have taken a number of other steps before reaching this decision: we have restructured, reduced costs, including taking Directors’ salary cuts and have tried our very best to keep the Dividends at the level that they have been. Unfortunately, however, the current yields are just not sustainable.”
This decision by Football Index led to a mass exodus of investors.
Over the weekend, some users reportedly lost tens and in some cases hundreds of thousands of pounds. One bettor claimed to have lost £250,000 due to the company’s decision.