The High Court of England and Wales has given Football Index administrators the green light to roll out the process of returning customer funds.
On Tuesday, the court ruled that Begbies Traynor Group can start paying out money owed to players following the collapse of the popular football stock market in March this year. The cut off for the payment of the dividends has been set at the date of administration, which is March 26. This means that bettors will receive payment based on the status of their account on the date, and dividends accrued after March 26 will not be paid out.
The judgement comes as a great relief to more than 280,000 players whose funds have been trapped in the platform for the last three months.
According to Begbies Traynor, Football Index will refund roughly £3.5 million of £4.5 million held in the company’s player protection account.
The money, which is currently held by the Viscount of Jersey, will be disbursed to the platform’s payment provider upon request from the administrator. The transfer will take five to eight days, after which the company will start distributing the funds to customers.
Payouts will be made through the players’ accounts using the same withdrawal methods available when the betting site was active. Customers who qualify to get a refund will receive email notifications when the funds hit their accounts, and from there they will be able to sign into the site and submit cashout requests.
The surplus amount in the player protection account will be used to offset legal fees and other costs incurred by administrators, as well as settle debts owed to other creditors, including customers with open bets.
Bettors can look forward to receiving their dividends in the next 7 to 18 working days.
Football Index launched in the UK market in 2015 under the regulation of the Gambling Commission.
The BetIndex operated platform allowed punters to buy shares in professional football players by placing real money bets on their future performance. Customers with active bets earned dividends based on the footballers’ performance in the media or on the field.
On March 8 this year, the investment platform announced new dividend terms that saw the value of maximum dividend per share drop from 14p to 3p. The move led to a drastic fall in share prices on the market, prompting instant losses for thousands of British bettors.
Three days later, the platform operator, BetIndex, announced the suspension of the betting exchange on its website and revealed that it was going into administration as it seeks to relaunch operations in a restructured form.
Consequently, the Gambling Commission suspended the operating licence of Football Index citing concerns over the operator’s activities. The announcement was followed by a statement from BetIndex, confirming that it was planning to go into administration with Begbies Traynor.
Investigations into the collapse of the exchange have revealed that BetIndex, the parent company of Football Index, decided to suspend operations and go into administration three days prior to the dividend slash.
In other news, the Department for Digital, Culture, Media and Sports (DCMS) has tapped Malcom Sheehan QC to lead the government’s independent review into the crash of Football Index.
The investigation will seek to examine the actions of the UKGC towards the operator by looking at the Commission’s initial assessment of Football Index, the licensing process, and monitoring thereafter. The exchange obtained its permit in September 2015, and the inquiry is expected to cover the period between licensing through March 2021.
The objective of the investigation is to establish what caused the collapse and whether the regulator could have acted sooner to prevent it.
Also, Sheehan is expected to examine the actions taken by the Financial Conduct Authority (FCA) and determine whether the body should have been responsible for regulating the exchange.
The commercial and common law expert is set to submit his report to the Department in Summer.Findings from the inquiry will be incorporated into the government’s ongoing review of the Gambling Act of 2005.
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