UK LEGAL COMMENT
A month is a long time in gambling regulation
It’s been a big year already… Melanie Ellis of Northridge Law looks at the latest events in the UK gambling scene
M 26 APRIL 2021
arch was an eventful month for the Gambling Commission, seeing over £10m imposed in regulatory penalties, the suspension of a licence following the operator going into administration and
the departure of the regulator’s CEO. BetIndex Ltd, the operator of the popular Football
Index website, was the subject of an ongoing licence review by the Commission. On 11 March, the company entered administration and, upon informing the Commission that it would freeze customers’ access to their funds, had its operating licence suspended. The issues at Football Index may have begun in March 2020, when the UK went into the first lockdown and sporting events were suspended. The product offered customers the chance to buy and sell “shares” in football players, with dividends paid based upon media attention received by a player. In the absence of football matches and associated media articles these shares became less attractive. Share prices dropped significantly in the last few months of 2020, but it was the announcement of an upcoming reduction in the maximum dividend payouts
in March 2021 which led to the collapse of share prices and, ultimately, of the company. Many customers lost large amounts of money in these
share price crashes and, pending a direction by the Courts, customers with funds on deposit with Football Index are unable to withdraw their money. The Gambling Commission was heavily criticised for allowing this situation to arise. It subsequently published a statement defending its decision not to suspend the company’s licence at an earlier stage, on the basis that such action could itself trigger financial issues and put customer funds at risk. The Commission’s regulatory investigation of BetIndex is ongoing, but it seems unlikely that the outcome will be anything other than a surrender or revocation of the licence. Whether precipitated by the criticism of its handling of the Football Index licence review or for some other reason, the Commission’s CEO, Neil McArthur, announced his resignation on 15 March with immediate effect. This left the Commission needing to put interim measures in place, with the regulator now being led jointly by its Deputy CEO and COO while it carries out a
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