Executives of the failed online betting site Football Index were warned soon after its launch that its so-called “football stock market” would prove to be an unsustainable bubble similar to a Ponzi scheme, a former employee of the firm has said in emails seen by the Guardian.

The emails also suggest proposals to make the market more stable may have been rejected because of concerns about the possible impact on revenue and raise fresh questions for the Gambling Commission about its understanding of Football Index’s business model before issuing the firm with a betting licence in September 2015.

Football Index collapsed in March leaving its former customers facing estimated losses of at least £90m, a few days after its directors announced a drastic cut in the dividends paid on the “shares” in footballers that traded on its site. That led to a crash in the market, which forced the firm to suspend its operations. The Gambling Commission then suspended its betting licence on 11 March.

Shortly after Football Index was forced offline by the latest of several crashes in its market in the months leading up to its failure, it emerged the Gambling Commission had been warned in January 2020 that the site was “an exceptionally dangerous pyramid scheme under the guise of a football stock market”. Now, though, it appears that the firm’s executives, including its co-founder and chief executive, Adam Cole, received a similar warning in the summer of 2016.

The problem…

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