Hundreds of Irish clients are believed to be among those to have lost money in the recent crash of British gambling website Football Index which entered administration on Thursday evening.
A number of individual users are said to have lost six-figure sums over the past week but many more have suffered very substantial losses amid accusations of unethical dealing by a firm that had commanded a loyal following after claiming to revolutionise the football betting market.
There was an air of camaraderie in some of the many messages posted on related social media sites since news of the company’s collapse broke, with users sending each other best wishes as they began to acknowledge that the remarkable story might be coming to an end. Quite a few expressed concern for the mental wellbeing of fellow “community” members who had lost money they could ill afford.
There was plenty of anger too, most of it directed at owners who had provided repeated reassurances that the company was in good shape right up until the end.
That seems to have become an inevitability last Friday when an announcement that the company’s payouts were to be severely cut wiped around 90 per cent – one estimate puts the cash figure at €67.77 million – off the value of existing bets. When the market opened the following morning, an exodus began of customers trying to sell their holdings. The platform staggered on for another five days before being suspended.
There are now multiple calls for an inquiry into the running of the firm and questions about the role of regulators who were supposed to protect customers. In the end, they only moved to strip the company of its gambling licence after it had gone into administration.
Football Index was launched in October 2015 and billed itself as a way for “investors” to “buy shares” in footballers. The idea was that the price of shares in players who did well from that point on would rise while the company would issue “dividends” based on the performance of individuals in matches as well as their media profiles. Many users seemed to view their bets as very long-term affairs.
In essence, the idea was as a sort of notional footballer stock market with aspects of a fantasy league game thrown in but the stakes were very real. The minimum lodgement/withdrawal to/from an account was £10 but the amounts involved in some instances ran well into six figures and one user posted an image on social media on Thursday evening suggesting a roughly €150,000 loss over the past week.
The company claimed to have 500,000 registered users, though others put the peak figure at more like one tenth of that. It bolstered its own credibility with shirt and other sponsorship deals with clubs like QPR, Fulham and Nottingham Forest as well as media "partnerships" with the likes of Talksport running paid-for content and prominent commentators on the game like Guillem Balague and John Motson providing endorsements.
The firm generated money by staging “IPOs” in new players, “minting shares” in existing ones, as well as taking a commission on the sale of shares between existing users. Until a year or so ago, it also offered an “instant sell” facility which, like “cash out” on a standard betting site, provided the option to get your money back from the company at a slight discount on was reckoned to be full value.
It was abolished around the time the pandemic started, the first of many changes, some of which were initially beneficial to users, with dividends raised dramatically at one point back in September in an apparent effort to generate more trading and so more commission.
There was, however, persistent talk of “liquidity issues” that might be addressed by expansion into big new markets like Germany and Spain.
This led to accusations by critics that the entire venture was basically a Ponzi scheme, with the money of new investors required to pay off earlier backers. But many members of a loyal customer base, many of whom had previously made significant profits and successfully cashed them in, were reluctant to believe it.
The company's founding directors Adam Cole and his successor as chief executive, Mike Bohan, provided upbeat assurances to specific queries, with customers told in recent months that the company had "never been in a stronger financial position".
The fact that the firm continued to sell new shares in players up until last week also seems to have provided reassurance to users of the platform, though this turned to dismay and accusations of bad faith when dividends, the potential return a share might generate thanks to the performance of a given player, was slashed by more than 80 per cent last Friday evening. By Thursday night, in the statement confirming that it had gone into administration, the company was admitting to “substantial losses”.
One Irish customer, Mark McLaughlin, from Belfast, who joined in December 2018, reckons he is out of pocket to the tune of between £5,500 and £6,000 (€6,400 to €7,000) since last Friday with the value of his holdings first reduced almost to nothing, then frozen by the suspension of the platform.
“I asked my brother did he want to join in and I’m so grateful that he didn’t given everything that’s happened,” he says now. “He just said he didn’t like the sound of it, thought it just sounded very dodgy and I can get that.”
When he joined, he felt that as someone who liked football and liked to have a bet, the platform was “a really good thing to dip a toe into”.
“And then you just got gripped into it, you know, it’s a very highly addictive platform; there’s no two ways about it. That wee buzz that you get from refreshing and seeing your players go up and down. It’s like a slot machine, based on football with all the familiar names.”
Subsequently, he says: “I found it very difficult to watch football without having my investment in Football Index out in front of me, being able to see, who [what player] is winning who is losing . . .”
He still admits to having a huge affection for the platform, recalling the heady days when he was making healthy profits from the likes of Paul Pogba.
“That was the start,” he says, “then for quite a while it was just ticking over nicely . . . I might buy a player for a pound, get him up to £1.10 and sell him back to Football Index for £1.05 so that was a 5p profit. I’d just recycle, recycle, recycle. It all felt very comfortable and safe, you might lose a little, you might win a lot but your money never seemed to hugely change. Then fast forward . . .
“It was everywhere. When you were in the pub before Covid, you would have bumped into someone who was using it and you’d be chatting about it. Once Covid hit they decided to stop offering instant cash out and from then on you could feel the positive environment within the community and around the platform began to sour. People started asking: ‘How could they do this?’”
McLaughlin says his overall loss is not as large because he had previously made withdrawals to help fund holidays and the like but he has had to talk to close family members and his employer during the past week, he says, “about the fact that my head’s probably a bit off at the moment because of what has happened to me”. Everyone has been very understanding, he says, recommending that others who have suffered losses should talk about it too.
“Honesty relieved that burden. I think that’s something people should do.”
John Nellis, from Newcastle, Co Down but who now lives in Cork, had around €20,000 invested at one stage and hosted a Football Index themed podcast (just one of a number in the cottage industry of media commentary that built up to keep the community informed on issues relating to the platform) for around 18 months.
As he became disillusioned with the company’s behaviour and the amount of time it was taking up in the discussions he hosted, he began to sell off his shares and recently cancelled the podcast. He reckons his losses this week amount to around €700 but says he is comfortably ahead over the longer-term.
“I cancelled the podcast,” he says, “because I was sick of talking about announcements and not talking about football, which is what I wanted to talk about. They were changing the payouts and different dividend types very regularly.
“I think a lot of people could stomach having had a bad bet but the issue was that over the last six to eight months it became very much a game of betting on the company itself, its decision and announcements. I think their T&Cs are probably nailed down but is it unethical how they have gone about things? Absolutely.”
Asked now if he believes Football Index really was a Ponzi scheme, Nellis says he is no expert on definitions but he acknowledges that a lot of people have been badly burned by the company.
"I look back now and thank God I always promoted diversifying to other platforms . . . 'go buy some whiskey, go buy some old wine, go stick some money in an ISA, don't stick all your eggs in one basket'. but there was this sort of narrative within the community that diversification was buying Jadon Sancho and also buying Harry Kane. "