Online betting platform Football Index, has had its gambling licence suspended after it appointed administrators as it looks to restructuring options.
In light of the recent extreme market crash, the company confirmed that the decision means that customers will be barred from trading or payment transactions, including deposits and withdrawals, until further notice.
The platform, which markets itself as a stock market for footballers, said it had appointed Begbies Traynor, the insolvency specialist, as administrator following talks with advisers and gambling regulators, in a statement.
Industry trade group the Betting and Gaming Council also suspended the operator’s membership, following the suspension of its licence.
Football Index, which is the trading name of BetIndex — a Jersey-based gambling company, said that its licence was suspended by both the UK Gambling Commission and the Jersey Gambling Commission.
A statement posted on its website on Friday said: “The restructure could involve equity in BetIndex Limited being distributed to customers, board representation for customers, and a new management team put in place, along with other initiatives.”
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It added that the board of BetIndex acknowledged their decision last week to slash dividend payments had “not been well received” and that they were searching for a “more agreeable way forward”, calling it “deeply regrettable.”
New rules for dividends payouts, which were due to come into force on 4 April, would see users’ earning potential on each player fall by up to 82%, with the maximum payout per day set at 6p, down from the existing 33p.
In March, users of the platform were outraged by a policy change, which reduced the so-called dividend payout on players, with customers claiming they had “lost” tens of thousands of pounds when “share prices” crashed following the change.
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The UK Gambling Commission said that there had been “concerns activities may have been carried on in purported reliance on the licence, but not in accordance with a condition of the licence, and that Football Index may not be suitable to carry on with licensed activities.”
It told the operator to “focus on treating consumers fairly and keeping them fully informed of any developments which impact them” as the investigation progresses.
The company allowed punters, which it referred to as traders, to buy and sell “shares” in professional football players, to offer an alternative to betting on the outcome of football matches, instead allowing them to bet on the future performance of specific players.
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