A British man has revealed how he lost as much as $119,000 when the sports gambling site he was trading on collapsed.
The unnamed man, from Norwich, England, was one of thousands of bettors who lost money when the Football Index trading platform went bust earlier this year.
Football Index was a popular UK sports app that gave players the chance to ‘trade’ soccer stars on a stock market-style system.
Bettors were able to buy and sell shares in players, whose value went up and down depending on how their performed on the soccer field. Bettors were then able to ‘cash out’ dividends.
The 27-year-old told the Norwich Evening News that he initially invested £3,000 ($4,000) in Football Index, and began trading more and more money on the system.
He estimates he had around £98,000 ($119,000) locked into soccer player shares when Football Index went bust.
“It has completely torn my life apart,” he said. “It is all the money I’ve ever saved, almost everything I’ve ever had and has put quite simply left me on the verge of committing suicide.
“My family has been really supportive but it’s really difficult to explain to anyone who doesn’t really understand what has happened here.
“It’s not a case of losing all this money from being a bad gambler or spending money I haven’t got. This was a different kind of betting over a longer term.”
What Happened To Football Index?
In principle Football Index was a format that should have worked. Like any stock exchange mechanism, the company earned money acting as a host for players to trade.
It was founded in 2015 and was an instant hit, and eventually became the shirt sponsor of a number of English soccer teams.
In the season before it’s collapse roughly $425m was traded on its platform, and almost $6m paid out in dividends – which effectively acted as a payout a casino or sportsbook would deliver if you won a typical sports bet.
This form of trading was considered gambling and was overseen by the UK Gambling Commission. But Football Index collapsed in March 2021 when the company restricted payouts from 44¢ per share the to 8¢ per share.
This crushed the valuation of everyone’s bets and more than halved the value of shares. Customers rushed to withdraw their investments and there was a run on the company, which eventually led to its insolvency.
Could It Happen In The US?
Possibly. There are trading indexes and apps that offer these types of trade but not quite on the same level as Football Index, where players could effectively buy and sell shares in players.
It was deemed to be a mode of gambling because there was luck, as well as judgement, involved in the trading.
Currently American states are gradually relaxing their legislation on gambling – and in particular online sports betting. Within a few years it like likely that sports betting will be legal across the US bar a handful of states.
Yet would a sportsbook or casino go as far as to set up a Football Index-like market? Perhaps. There was certainly an appetite for it in the UK and there’s no doubt fans of NBA, baseball and football would likely warm to a trading index like they’ve taken to fantasy sports.
But lessons must be first learned from Football Index meltdown, which cost players millions of dollars and cast further scrutiny on regulations in betting markets.
