The High Court England and Wales has selected 26 March as the cut-off date for payment of Football Index dividends which means that approximately £3.5m in player funds will be distributed to customers affected by the firm’s collapse.
This comes after the UK government’s Department of Culture, Media and Sport (DCMS) confirmed that Malcolm Sheehan QC will lead its independent review into the collapse of the business.
Football Index to repay £3.5m
The High Court has ruled that the collapsed betting business must now redistribute player funds that were held in its player protection account. The repayment will include winnings yet to be paid on events up until 26 March.
This means that approximately £3.5m will be paid from the account, which held a total of £4.5m, to affected customers. The repayment process is expected to take between 7 and 18 working days.
The High Court hearing only dealt with the funds held in player accounts and a decision has yet to be made on money that was tied up in active wagers.
The legal hearing to determine the cut-off date for account funds was necessary as the betting company’s administrator Begbies Traynor said bets that were still open when the operator went into administration would still be open and accruing dividends.
If the dividends were paid until the bets expired, the £4.5m player protection account would have defaulted by 22 April, which would mean no player could receive all of the money owed to them.
A representative from Begbies Traynor argued for the date to be set at 26 March, which was when administration proceedings officially began, or 11 March, when the firm entered administration.
How was this decision reached?
The case was initially moved from the Insolvency List to the High Court where Justice Robin Vos postponed his decision.
Today, Vos set the cut-off date at 26 March meaning that all winnings up to and including this date must be paid.
In his ruling, Vos explained that the clause in Football Index’s terms and conditions suggested the trust was intended to cover customer entitlement from the date at which the insolvency event occurred.
Vos said: “In my judgment, the correct interpretation is that it imposes a requirement for the Trust Fund to be used to pay customers who have a crystallised entitlement at the date the Insolvency Event occurs. It does not however require the distribution to be made immediately.
“In accordance with the requirements of the UK Gambling Commission, the payments should be made as soon as it is practical to do so.”
What happens now?
The money in the player protection account is currently being held by the Viscount of Jersey, who the administrators will contact to release the funds.
In an update on its site, Football Index said: “We anticipate an additional 5 – 8 working days for the funds to be moved from the Trust fund currently held in Jersey into our payment provider’s account, from which customer payments can be made.
“As soon as these funds are received customers will be notified by email and at that point customers will be able to log into their Football Index account and make a withdrawal request.
“The process to withdraw funds has not changed. Customers will need to login to their Football Index Account and go to the Account area, where they can select to withdraw funds.
“From the date of requesting a withdrawal, customers should allow between 2 and 10 working days for your withdrawal to be received into your nominated bank account.”
DCMS selects barrister to lead inquiry into collapse
Yesterday, the DCMS revealed that Malcolm Sheehan QC, a barrister for Henderson Chambers will lead the review into the collapse of BetIndex
Sheehan specialises in product liability and group actions, commercial and insurance disputes, commercial property, personal injury, health & safety, public and regulatory law.
In its statement, the DCMS said: “The review will examine the actions of the Commission in assessing, licensing and monitoring the operator. In addition, the review will examine the actions taken by the Financial Conduct Authority in determining whether the product should be regulated under the Financial Services and Markets Act.”
The barrister’s review will cover the period between September 2015, which is when BetIndex was awarded a licence by the Gambling Commission, and March 2021, when the licence was revoked.