Malcolm Sheehan QC was appointed to lead the review into the steps taken by the UK Gambling Commission and other regulatory bodies related to the collapse of Football Index.
Probe into Regulator’s Dealings
The review, announced by the Minister for Media and Data in April 2021, will focus on the period the company behind the collapsed sports betting business, BetIndex, was granted its license from the Gambling Commission in September 2015, until March 2021, when the national gambling regulator suspended it.
The Football Index platform fell into disgrace after a surprise move to slash dividend payments related to football players. Customers at the platform buy and sell “shares” in football players, effectively betting on the share price movement over a period of 3 years, while based on the media popularity of football players and on-field performances these shares accrue dividends.
Led by Malcolm Sheehan, an experienced counsel in product liability, group actions, public and regulatory law, the investigation will examine each step of the Commission in assessing, licensing and monitoring the novel sports betting product that incurred heavy financial losses to its customers after it collapsed earlier this year.
The review, which will report its findings in the summer, will also look into the actions of the UK financial watchdog, the Financial Conduct Authority (FCA), to determine whether the innovative betting product should have been regulated under the Financial Services and Markets Act (FSMA).
Insights for the Gambling Act Review
The findings of the inquiry are expected to provide lessons for future actions of regulators to help them avoid similar fallouts, and to provide invaluable insight to the government for the ongoing review of the 2005 Gambling Act, as officials intend to publish a white paper on the call for evidence by the end of the year.
While investigated, the Gambling Commission is carrying out its own regulatory investigation into the license of BetIndex, launched after the business fallout piled pressure on the gambling watchdog, especially after a media report revealed documents the Commission received in January 2020 clearly stated that dividend payments at Football Index were similar to a pyramid scheme. By that time, Gambling Commission CEO Neil McArthur surprisingly stepped down from his position with immediate effect.
The regulatory probe launched by the UK gambling watchdog is running independently of the proceedings into BetIndex’s assets and liabilities, undertaken by the appointed administrators after its collapse.