Football Index, the beleaguered online gambling platform, may now be forced to fight a class legal action brought by users who have lost large amounts of money on its site.
The football trading game went into administration and suspended operations on Thursday, after players suffered devastating losses amounting to tens of thousands of pounds for some individuals following a collapse of share prices on the site
The gambling commissions in both the UK and Jersey have suspended the company’s gaming license pending an investigation and QPR and Nottingham Forest have both terminated their shirt sponsorships with the company.
Campaigners are planning a class action by users of Football Indexin order to recoup losses
Now gambling campaigners say they are consulting lawyers about bringing a mass legal action to give desperate players the chance to recoup some of their money.
‘We are still hopeful we can bring an action despite the company going into administration, ‘said Matt Zarb-Cousins, of the campaign group Clean Up Gambling ‘We are going to persist.’
The group is working with specialist solicitors and they are meeting expert barristers next week.
Football Index is a platform on which users buy and sell ‘shares’ in leading players and receive dividends based on performance. In some cases, participants ‘invested’ huge sums of money.
Football Index were the main shirt sponsors for Queens Park Rangers and Nottingham Forest
Sportsmail understands that the legal action will attempt to prove that Football Index misrepresented its online game to users.
Football Index told Sportsmail earlier this week that it is a ‘gambling platform and has never claimed to be a savings product’.
The company ran into financial difficulties and announced a cut in dividends and issued more shares, among other changes, in an attempt to secure ‘the long-term sustainability of the platform’.
Users responded to the changes by trying to get their money out of the game and this led to a disastrous collapse in share prices, which the campaigners say swept away thousands of pounds, threatening lives and livelihoods.
Last week the market index value of players on the site was £80m, but after the dividends were cut and there was a run on the market this plummeted to just £20m. It is believed the company had around 500,000 users.
The losses occured because players’ values were dramatically driven down as more and more users tried to sell their ‘shares’.
The buy and sell prices for the world’s top players plummeted drastically over the weekend
‘Tens of thousands of people may have lost life-threatening sums of money,’ said Zarb-Cousins.
‘The situation has gone from bad to worse for the people involved.’
Immediately after the crash gambling campaigners warned stricken users may attempt suicide and lives had been destroyed. Many took to Twitter to share there tragedy.
Sportsmail was contacted by a large number of customers, many of whom share similar experiences of losing large sums of money on the platform.
One person, who chose to remain anonymous, said that their first year on Football Index resulted in a £30,000 profit – before they then invested ‘pretty much everything’ they had.
On Friday, before the announcement, they were £3,000 down on their deposits – but are now estimating to be around £60,000 down instead. They have deleted the app.
‘I’ve always saved money since a very early age,’ they added. ‘Now I’m 27, and everything I’ve saved is now pretty much gone.’
Football Index was licensed to operate as a gaming platform through licenses issued to its parent company BetIndex in mainland Britain and and in Jersey.
Borussia Dortmund’s Erling Haaland and Manchester United’s Bruno Fernandes were two of the most popular players on Football Index
On Friday, the Gambling Commission and the Jersey Gambling Commission suspended BetIndex’s licence.
In a statement the commission said: ‘We had concerns activities may have been carried on in purported reliance on the licence, but not in accordance with a condition of the licence, and that Football Index may not be suitable to carry on with licensed activities.
‘We have made it clear to the operator that as the investigation progresses, we expect it to focus on treating consumers fairly and keeping them fully informed of any developments which impact them.’
Virtual gambling platform Football Index, former shirt sponsor for two Championship clubs – including QPR, has been met with a furious backlash after jaw-dropping share price crashes
The move has come too late for many users of the site, which has infuriated those trying to obtain redress for punters.
‘Why has it taken this long,’ said Zarb-Cusins.’In my opinion it should never have been licensed at all.
‘The business model was unsustainable. It has taken people losing life-altering sums of money for the Gambling Commission to intervene. It’s too late.’
Meanwhile, as revealed by Sportsmail, QPR and Nottingham Forest have both terminated their shirt sponsorships with under-fire virtual gambling platform Football Index with immediate effect.
Football Index has recognised the ‘frustration and disappointment’ from users in a statement
On Thursday, administrators Begbies Traynor were called in – with Football Index claiming there is a hope that the site will be able to continue in a ‘restructured format’.
In a statement, Football Index said: ‘Until such time as the administrators is in office, the platform will remain suspended and no trading or payment transactions, such as deposits and withdrawals, will be possible,’ Football Index added.
‘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.’