Administrators at BetIndex, operators of sports betting platform Football Index, initiated the process of allocation of funds to current and former users of the platform at a hearing in the Royal Court in Jersey today.
Formal Launch of Funds Allocation Initiated
Insolvency practitioner firm Begbies Traynor which was appointed in late March to administer the collapsed sports betting business started processing claims from customers at Football Index against the company operating the platform in April.
As confirmed by BetIndex in a statement to its former customers last week, the initial hearing took place on May 10 to address the distribution of remaining finances at the company, £4.5 million, currently held in the Player Protection Trust Account of the sports betting platform.
The formal launch of the distribution process leaves Begbies Traynor with the difficult task to appropriately determine which Football Index customer what portion of the funds is entitled to, taking into account multiple factors including unpaid dividends and claims of lost funds.
Based on wagers invested in players, many still active bets on the platform would be owed dividends, so the trio of administrators, Richard Toone, Adrian Hyde and Adrian Rabet, will have to first determine the date for calculating these payments, with any date from the suspension of operations at Football Index until the expiry of the bet in the mix.
In addition, Begbies Traynor will have to determine the value of claims from players who lost funds in their player accounts due to the company’s fallout and weigh these claims against the value of owed dividends. It will also have to identify the customers which will receive funds from the account.
Of the total available funds, around £3.2 million is a current liability to customers, leaving around £1.3 million of surplus to be distributed among players with money in their player accounts and still active bets.
Customer Funds Protected against Other Creditors’ Claims
Contrary to claims from Football Index that individual player funds have been protected against claims from other creditors, terms and conditions at the sports betting platform determine that funds invested by the clients in football players via the trading exchange fall outside of the benefit from this protection.
BetIndex’s troubles started with the decision to slash dividend payments at Football Index from 14p to 3p, which led to many customers losing money, and subsequently, a mass withdrawal of funds began, forcing the operator to enter administration, while its betting license was suspended by the UK Gambling Commission.
The fallout happened during the ongoing review of the Gambling Act 2005 by the Government and became a central issue with all pointing the finger at the Commission for being “asleep at the wheel”, as deeply concerned by the developments government officials announced an investigation into the circumstances surrounding the platform’s collapse.
Furthermore, the enlisting of law firm Leigh Day by some customers at Football Index means more trouble for the under-fire regulator which could also face legal action for its failings.