The High Court of Justice for England and Wales has taken on the hearing regarding the distribution of over £4.5 million in funds to former customers of Football Index.
Begbies Traynor, the insolvency practitioners for Football Index parent company BetIndex, initially began to process claims against the company in April, one month after the operators collapse.
After the firm initiated the hearing on Monday, it was anticipated that the case would be heard by the Insolvency List at the Business and Property Courts of England and Wales, as the administrators hoped for a quick resolution to the issue.
Although the hearing has now been taken to the High Court, a date has not yet been set, and so the distribution of funds to customers has been delayed.
Citing stress suffered by customers, some of whom lost hundreds of thousands of pounds due to the demise of Football Index, Begbies Traynor had called for the case to be heard by the courts as soon as possible.
Additionally, BetIndex – which had expressed hope in March that the player trading platform could be maintained in a ‘restructured form’ – has also made plans to relaunch the brand for the 2021/2022 football season.
The current player protection fund includes up to £3.2 million to be distributed among customers who still have money in their accounts which they are unable to access, leaving the operator with a surplus of £1.3 million.
However, the main challenge posed to the administrators concerns the status of active bets held with Football Index, and differentiating these claims against those of people owed dividends by the company.
If these dividend payments were made up to 22 April or beyond, the customer’s account would go into default and no customers could receive the full value lost.
Football Index initially collapsed due to the decision to slash dividends from 14p to 3p, leading to a mass withdrawal of customers, which subsequently resulted in the firm entering administration.
This was followed by the suspension of its gaming licence UK Gambling Commission (UKGC) as well its membership of the Betting and Gaming Council (BGC).
BetIndex had previously stated that player funds have protection over other creditors’ claims, but according to its own terms and conditions, funds invested in football players via the football trading exchange do not benefit from this protection.
London law firm Leigh Day has also been enlisted for representation by some former Football Index customers, with the UKGC reportedly one of the targets of the legal case.
Criticism has been levelled against the UKGC as a result of the fallout from the Football Index collapse, with the All Party Parliamentary Group for Gambling Related Harm (GRH APPG) calling for the DCMS to undertake an independent review.
The DCMS subsequently announced an independent review into the situation – supported by the BGC – including an assessment of the UKGC’s regulatory actions.