Devastated Leeds residents lose thousands of pounds overnight as Football Index enters administration
Devastated Leeds residents have told the Yorkshire Evening Post how they lost thousands of pounds of their savings, student loan money and wages on Football Index - as the site announced it was entering administration.
Football Index launched in 2015 as a UK-licensed and regulated gambling platform that allowed its customers to gamble on the future success of football players.
Fixed odds betting options were also offered for the chance to win daily 'dividend payouts'.
Thousands of customers across the country deposited huge sums of money onto the platform in recent years, which was advertised on radio and TV.
Football Index is also a shirt sponsor for Championship clubs Queens Park Rangers and Nottingham Forest.
Players were given a warning when signing up to the service as part of its game rules, which stated: "Your money is at risk when you place a Bet on Football Index. You may lose your Stake. There is no guarantee of winning any particular amount of Dividends in respect of Bets. Share prices may fall or rise."
However, the 'market' crashed during the course of this week following the announcement of a dividend restructure - with players' values dropping significantly overnight and some customers' portfolios reducing in value by 95%, according to people who used the service.
In a statement released on Thursday (March 11), Football Index acknowledged the "difficult and challenging week" for its players.
The board announced the platform would be suspended and administrators instructed to "seek the best outcome for customers" with the goal of continuing the platform in a restructured form.
The board said: "We are pursuing a restructuring arrangement to be agreed with our stakeholders including, most importantly, our community.
"We are preparing this through an administration with insolvency practitioners Begbies Traynor, to seek the best outcome for customers with the goal of continuing the platform in a restructured form."
Unfortunately for users, payment transactions including withdrawals were also suspended after the announcement - leaving customers no option to take their remaining money out of the platform.
An outcry ensued across social media, with many Leeds-based customers left shattered by the news.
One man, who wished to remain anonymous, said he had deposited his student loan money and wages into the index during his time at university.
Once he graduated, the 23-year-old Leeds man topped up his deposits using bonus payments and overtime wages from his employment.
In total, the man told the YEP he had invested at least £4,000 into Football Index.
Now, in the space of less than a week, his portfolio value - which peaked at around £7,500 - has dropped to less than £500.
The man was devastated by the news of the platform's suspension.
He said he initially "loved the platform" and thought it was "a way to make money off football knowledge and added excitement to matches".
Speaking to the YEP, the man said: "I put some money in back in university when it was all about media and kept topping up with student loan and informal income.
"I graduated and got employed two years ago and put overtime and some bonus money in.
"In total I had around £4,500 of my own money in.
"At first it was all about media, and whoever got the most took the dividends, price was driven by media earnings.
"Then they introduced performance dividends based on the Opta matrix, with the top player of each position each day winning dividends.
"This was a great move and the market boomed.
"My portfolio peaked at around £7,500.
"Then they started changing the bet, they tried to make it more like a stock market, with bids and offers and removed the instant sell feature, meaning prices were driven down instead of up.
"Everyone has upped and left, my portfolio value is now a little over £500.
"I haven’t taken any money out as at the prices players are now I don’t think it’s worth it, I’d rather hope for a recovery of the back of the administrators talks.
"I loved the platform. It was a way to make money off football knowledge and it added excitement to games that originally were dead rubbers for me.
"It added more to games, but constantly changing the terms of investment and payouts means a recovery isn’t likely, unless new leadership takes charge and the platform reverts to how it was.
"I can’t see it surviving the long run even if it survives the short term, I’m just hoping for there to be some future alternative that actually works, because it was such a good concept and how such a good foundation that’s now been wasted and some people have lost serious money."
Ben Child, a 19-year-old from Leeds, told the YEP he had spent the past 18 months investing money on the platform - with a total deposit value of around £2,000.
He said - despite it "sounding daft" - that he was one of the lucky ones, withdrawing just £370 last week.
If he had left the money in the platform, it would now be worth less than £100, Ben said.
Ben added: "There’s people who have lost over £100,000 on there and had a lot of their savings in there so it could be worse.
"I only put a bit of money that I had spare and didn’t need whereas others have lost money they relied on so I feel for them."
One Leeds resident also said he deposited around £2,000 onto Football Index in the past two years, however he managed to recover a substantial portion of the funds before the announcement last week.
Speaking to the YEP, he gave an example of how one player's stock value had decreased in the past seven days.
He said: "I used to have about £2,000 in Football Index.
"There are some astonishing statistics I can share on how the value of players absolutely collapsed.
"A £500 investment in Tammy Abraham two years ago was worth about £8 as of last Saturday when I last logged on following the announcement.
"There are similar losses across other players."
The man said his portfolio value had dropped by around 95% in the past week.
He added: "The per cent losses are absolutely staggering.
"I actively stopped ‘playing’ the game probably around a year ago and withdrew 75% of my money."
Another Leeds resident said he "felt silly".
He added: "I thought the concept of Football Index was great, just a shame about its management."
The statement released by Football Index on Thursday (March 11) - in full - read: "Dear Football Index Community,
"We understand this has been a difficult and challenging week for you all. After much difficult deliberation we must now issue the following update.
"The Board of BetIndex Limited has consulted with external legal and financial advisors, and the UK and Jersey Gambling Commissions. The decision has been made to suspend the platform.
"The dividend restructure announced on Friday was a necessary step in a business recovery plan to seek the long-term sustainability of the platform. However, it is clear that this has not been well received and we need to find a more agreeable way forward.
"We are pursuing a restructuring arrangement to be agreed with our stakeholders including, most importantly, our community. We are preparing this through an administration with insolvency practitioners Begbies Traynor, to seek the best outcome for customers with the goal of continuing the platform in a restructured form.
"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.
"Until such time as the administrators are in office, the platform will remain suspended and no trading or payment transactions, such as deposits and withdrawals, will be possible. Once in office, the administrators will be in contact with customers, creditors, and other stakeholders. This interim step of suspending the platform is merely to ensure that everyone’s rights are preserved in relation to funds held by BetIndex Limited.
"We fully understand and anticipate concerns regarding a temporary suspension of your ability to withdraw existing Cash Balances and assure you that they will remain held in a segregated account to be managed in conjunction with our advisors, protected by the trust arrangements that are in place and will be subject to review by the administrators.
"The Board have at all times been seeking the best way to sustain the platform as we believed a recovery was not only possible but also in the best interests of our customers. This decision is deeply regrettable, and is the outcome we were seeking to avoid by restructuring dividends. However, we believe it is the most responsible route forward for our community given the situation as it has developed.
"The administrators will release a statement upon their formal appointment by the Court, which is anticipated to be in the next 10 days and will be able to share further timelines at that point.
"The Board of BetIndex Limited"
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