Footstock Go into Insolvency

Another football player trading platform is in big trouble. Footstock have gone into insolvency proceedings and given up their British remote betting licence. This comes just a fortnight after Football Index went into administration.

Footstock is based in Germany and recently gave the bad news to their players. They stated that the problems at Football Index have had a knock-on effect. “The whole sector has been shaken by recent events. As a result, over the last few days, we have suffered significant setbacks.”

The company had been expecting to acquire some funding, but this has not happened. This means they are unable to run their Seedrs campaign. Another difficulty is that “valuable partners are pausing co-operations.”

All of which Footstock say has “crushed our company in this crucial period of growth.”  They had tried “incredibly hard” to find some way of allowing their business to continue. However, those efforts have failed. The simple fact they say is that “without funding, Footstock cannot survive.”

Footstock described their business as a combination of a player trading platform, EA Sports’ FIFA Ultimate Team Game and fantasy football. There was a ‘playing cards’ feature that would remind everyone of the Panini stickers that many spend their youth collecting.

The company kept funds received from customers separate from their own business accounts. If insolvency occurs, there is no additional protection around these funds. Footstock say that they will continue to consult wit professional advisors. When able to,  they will give their customers “information about your cash balances.”

All this follows the financial collapse of Football Index. Their UK Gambling Commission licence has been suspended and the company has gone into administration.  It’s not just Football Index that has  been receiving the wrath of its users.

There has been a great deal of criticism about how the Gambling Commission dealt with Football Index collapse. Millions of pounds have been lost and users were upset that the Gambling Commission acted far too late. Why did they only suspend their licence when Football Index went into administration.

London law firm Leigh Day Solicitors have started a review into what happened. They are considering whether customers that have been failed by the Gambling Commission will be represented by them.

The Gambling Commission had to issue a statement on the matter. They said that licence review proceedings re BetIndex who operate Football Index had begun in May 2020 and continued for the rest of the year.

The company told them this month that there were plans to self-suspend their licence as they planned restructuring of the company and a re-launch. This led to the Commission suspending their licence on March 11.

The Commission said they hadn’t acted themselves as such an action “can trigger or hasten the financial decline of an operator and put customer funds at risk.” They added that BetIndex have told them that they have a Trust Account that is “intended to hold dividends to be paid to winning customers.” The Gambling Commission say that solicitors working for BetIndex have told them funds will only be distributed to any creditor other than customers. Compensation calculations are ongoing it appears.

Politicians are also making threatening noises. Carolyn Harris is the Chair of the All-Party Parliamentary Group for Gambling Related Harm. The MP describes the BetIndex situation as “a scandal” and another reason to reform the gambling industry.