Legal

Football Index founder denies he received millions from the business

| By Daniel O'Boyle
Football Index co-founder Adam Cole has sought to correct what he described as “inaccuracies” regarding the payments he and other BetIndex shareholders received before the operator collapsed earlier this year.
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Cole said that following the release of documents ahead of a court hearing on Friday (21 May), there had been a number of “inaccuracies” in the way the case was reported. In a new statement, he moved to dispel claims that were “not open to debate or interpretation”.

One of these claims concerned a business named Fame Ventures, to which Football Index paid £9.0m in “support fees” in its 2020 accounts.

Cole said that while a business currently known as Fame Ventures lists only himself as a director and has no bank account, this was not the business being paid. Rather, this refers to the business now known as Index Labs, which according to Companies House filings changed its name from Fame Ventures in December 2019.

Index Labs is the parent company of Football Index and, as it performed work on the operator’s platform, Cole says it is “where the bulk of technical costs are incurred”.

Cole – who stepped down as Football Index chief executive in December 2020 – then revealed that the amount he had received from all businesses in the BetIndex group was £236,692 over the six years since its launch. However, he said he also received full repayment of a zero-interest loan he gave to the business, the size of which was not disclosed.

In addition, the Football Index founder clarified that the business had not paid any dividends to shareholders at any point in its history. While documents related to the business made frequent reference to dividends, these referred to a form of winnings on the platform, paid out when a footballer makes an achievement such as scoring a goal, not shareholder dividends.

“Over the last five years we have seen an incredibly loyal customer following, who truly believed in our unique concept and were passionate about seeing the business succeed,” Cole said. “The staff and management of Football Index are to a man, and woman, devastated by what has happened to those customers and understand the resentment, loss and anger that has occurred.”

Cole added that if there was any misconduct on directors’ behalf, administrators Begbies Traynor would investigate it.

“All we can do as a team right now is fight for the best outcome for those customers,” Cole said. “As officers of the court, the administrators are duty bound to provide a thorough investigation of the conduct of directors of the company and the events that led to the administration of BetIndex.”

The documents in question were released ahead of a court hearing to determine how funds in BetIndex’s £4.5m player protection account should be allocated. The funds are intended to cover money held in player accounts, but the administrators asked a High Court judge to determine a cut-off date for winnings, as these would continue to accrue if a date was not selected, eventually bringing the account into deficit.

The judge, Robin Vos, ultimately postponed his decision, but said his ruling should come by the end of next week (4 June).

BetIndex entered administration on the night of 11 March, and had its licence suspended by the Gambling Commission at the same time. This followed a change to the operator’s dividend structure on 8 March that BetIndex said was necessary to keep the business running.

However, documents released last week show the business was already taking steps to enter administration after agreeing to do so at a 5 March board meeting, even though the platform reopened and took bets following the dividend change.

Further documents released showed that BetIndex directors hope to relaunch the Football Index brand, as part of a company voluntary arrangement (CVA), with customers who are owed funds receiving a 50% equity stake in the new business if they approve the deal. Administrators said this was possible as “the underlying business model is attractive to customers and financially sustainable” and added that “the directors consider that there is a real prospect” of the operator being relicensed.

After Football Index’s collapse, the government Department of Digital, Culture, Media and Sport (DCMS) announced an inquiry into how the operator failed, after pressure from groups such as the All-Party Parliamentary Group on Gambling-Related Harm.

This investigation will look into not only the business itself, but also whether more could have been done by the Gambling Commission, which revealed that it had been investigating Football Index for almost a year, but opted not to suspend the operator’s licence, partly due to concerns that doing so would have only accelerated its collapse.

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