Ongoing criticism hurled at the Gambling Commission in the UK for its deafening silence during the administration process of Football Index provoked the commission’s interim chief executive to respond.
‘CVA May or May Not Happen’
Andrew Rhodes, who stepped to the executive role in June to replace his predecessor Neil McArthur, who was forced to leave, took to Twitter to defend the regulator’s actions while administrators of Football Index are doing their work.
Rhodes reiterated the Gambling Commission could not say much regarding an ongoing investigation and reviews of the collapsed business, though did nothing to hide his disappointment that customers at Football Index are blaming the regulator for their misfortune.
“Many have assumed the GC ‘did nothing’ and you are entitled to your view.”Andrew Rhodes, Interim CEO, Gambling Commission
Defending the institution he represents, Rhodes stated that he was willing to address every concern related to Football Index within the context of the ongoing administration and in particular the proposed Creditors’ Voluntary Agreement (CVA) in which the GC has no influence on the outcome.
“A CVA may or may not happen – it is not something the GC is involved with and would not be. It’s between the administrators and any potential investor/buyer to set up a CVA.”Andrew Rhodes, Interim CEO, Gambling Commission
The insolvency procedure proposed by Football Index in May would allow the business to keep its most precious asset, the software, while most of the debt would be written off as the platform is brought back into operation. It would also steer clear of any wrongdoings of the company’s directors.
Regulator Bears no Responsibility for Customer Funds
In response to messages, the regulator should compensate clients’ losses, the interim boss noted gambling regulation has no provisions for compensations from the regulator as any compensation scheme is the operator’s sole responsibility.
“Funds protection needs to be made clear by the operator but this will vary between companies and aside from funds held separately, often the cash balances, this does not protect against a company.”Andrew Rhodes, Interim CEO, Gambling Commission
Customers will probably have to wait until the ongoing inquiry launched into the platform by the Department for Digital, Culture, Media & Sport (DCMS) is over and the administration process is complete to have any chance of the regulator addressing issues raised in a media report by The Independent in May.
Further Issues to Address
The media argued that the GC is responsible for letting the business continue on a non-sustainable path, as it had been losing money prior to the summer of 2020 when it implemented changes to double the payout on bets to lure more deposits.
The GC used forensic accountants to launch a formal review in the business in May 2020, yet allowed the business which was clearly not sustainable to continue to operate akin to a Ponzi scheme, while telling its customers it was in perfect financial health.
Customers will also be eager to hear why Football Index appointed insolvency specialists Begbies Traynor on February 15, yet continued to urge people to deposit more money until its collapse on March 11.