A cabinet minister has explained that the UK Government will not use public funds to compensate customers of the failed gambling service Football Index, which collapsed in March last year.
On June 7th, the Government’s Under-Secretary for the Department for Digital, Culture, Media and Sport (DCMS), Nigel Huddleston, addressed a special parliamentary debate associated with the impact that the Football Index platform’s collapse had on local users. During the debate, a number of Members of Parliament shared distressing stories about some of the gambling website’s users who were left devastated by the platform’s sudden collapse more than a year ago.
At the time when the failure of the operator happened and virtual football shares estimated at about £120 million literally vanished overnight, many compared the platform to a “Ponzi scheme”.
As Casino Guardian reported, the gambling company was licensed and regulated by the UK Gambling Commission (UKGC), which has faced fierce criticism about its failure to pay attention to previous warnings about the foul business practices used by Football Index’s parent company.
The UK Government has so far managed to resist the calls for using public funds for compensating users of the gambling platform. It reiterated its position in the special debate on the matter that took place yesterday.
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The special debate related to the impact of the sudden collapse of Football Index was secured by Liz Twist, a member of the Labour Party. During the meeting, Members of Parliament from various political parties shared their opinions on the matter on which affected users have been asking for help.
According to some proponents of the idea, the Football Index customers’ losses should be compensated by the Government because the losses occurred as a result of a regulatory failure in the first place. They also reminded that most users’ cash balances had been returned but the majority of sums were pretty trivial, and some people are still suffering from considerable financial difficulties because of their investments.
During the special meeting, some of the MPs, who support the idea of the Government making compensations to affected users, mentioned the London Capital Finance scandal. The latter also involved a regulatory failure that the UK Government eventually decided to compensate the victims for. Others suggested that money accumulated from fines imposed by the UKGC and the Financial Conduct Authority (FCA) should be used for funding the required compensation.
Although Minister Huddleston agreed there had been some failures of the country’s gambling regulator and expressed his sympathy for the users affected by the March 2021 collapse of Football Index, he rejected some MPs’ calls for government compensation. According to him, a move to compensate customers who suffered the negative impact of the gambling operator’s failure would be inappropriate. Furthermore, he shared that it is legally impossible to use UKGC and FCA fines for compensation because fines imposed by the UKGC are set to be used for good causes, while the FCA fines are required to go as contributions to the coffers.
Olivia Cole has worked as a journalist for several years now. Over the last couple of years she has been engaged in writing about a number of industries and has developed an interest for the gambling market in the UK.