The Gambling Commission’s interim chief executive, Andrew Rhodes, has defended the regulatory body against criticism that it has remained silent during the administration of Football Index.
What did Rhodes say?
In a series of posts on Twitter, the Commission’s interim chief executive defended the Commission against claims it has failed to act during the administration process.
Rhodes wrote: “Many have assumed the GC ‘did nothing’ and you are entitled to your view. What I would ask you to have in mind is that we currently cannot say very much at all about these matters because of ongoing investigations and reviews.
“I’m not asking that people change their view, just that you understand that we have not been able to set out what we know and what we did, which is normal when there are ongoing proceedings.”
However, Rhodes said he was willing to respond to all Football Index concerns as best as he could in the context of the ongoing administration.
Questions about a CVA
Rhodes did respond to questions around a Company Voluntary Agreement (CVA) to reimburse Football Index customers. It had been hoped that a CVA would be a feasible solution to reimbursing customers who had lost their money.
Although Rhodes responded to questions around the CVA, he explained that the Commission could not help determine if this was a likely option as it was strictly an administration matter rather than a regulatory one.
Rhodes explained: “A CVA may or may not happen – it is not something the GC is involved with and would not be. It’s between the administrators and any potential investor/buyer to set up a CVA. If a CVA does happen, then they will likely make an ‘offer’ for the debts the company has.
“This does not mean you would get all your original stake back – it depends on what they offered. Then the CVA would need to apply for a licence to operate from us, which we would be obliged to consider.”
The Commission’s chief executive also refuted claims that he did not know how much people’s bets were worth, explaining it’s up to the administrators to decide.
“I have never said “I dunno” what the bets are worth, as one person said,” wrote Rhodes. “They need to be valued by the administrators. There are several ways of valuing the debt and whilst many feel this should be the original stake, there are several ways of looking at it.
“Realistically, this will be part of attempting a CVA, and if there is no ultimate rescue for the company the debt would need to be valued as part of winding a company up.”
Rhodes declined to comment on the roles of certain individuals in the investigation as the proceedings are still ongoing.
He also said he was unable to provide an answer for when the inquiry into the collapse of Football Index would be published, as it is being carried out by the Department of Culture, Media and Sport (DCMS).
The Commission and repaying funds
Rhodes also revealed that the Commission had received messages demanding it re-compensate player losses as the regulator had licensed Football Index.
However Rhodes explained that “Being regulated does not prevent a company going into administration and unlike some other sectors, there is no insurance or compensation scheme to cover gambling companies that go into administration and then liquidation.
“Funds protection needs to be made clear by the operator but this will vary between companies and aside from funds held separately, often the cash balances, this does not protect against a company going into administration. Administration for operators is not common – there have been four in recent years, though orderly wind-up is a bit more common.”
The latest on Football Index
The football stock market platform, Football Index, collapsed in March after its operator BetIndex went into administration.
The case was handed to administrators before being sent to the High Court, where it would be decided how £4.5m in customers’ money would be repaid. This only included funds held in accounts, not cash tied up in active bets.
In June, the High Court decided the cut-off date for account balance that would allow for up to £3.5m to be repaid.
In July, Football Index informed customers that they could withdraw funds from their accounts.
The Court has yet to determine how much money tied up in active bets would need to be repaid.