BetIndex announced that it would enter administration one week later, on 11 March 2021. On the dates from 8-11 March, however, the platform was open, with players able to place bets.
Other documents released ahead of the hearing today include emails from customers who had placed bets after 8 March, including one who said he placed bets worth £2,000 on 11 March.
Minutes of the 5 March BetIndex board meeting, which were included in the court documents, also revealed the board’s explanation for the decision to go into administration in the UK and not in Jersey, where the business is based.
It was outlined during the meeting that Jersey does not have the same strict administration conditions as the UK.
“The options for a Jersey company are far more limited than a UK company,” read the minutes.
“Jersey processes do exist however they are unlikely to be as effective as UK administration.”
It was therefore decided that administration in the UK was preferable.
The minutes detailed that in order to have a foreign company undergo UK administration, the company must qualify under a specific section of the UK insolvency act.
The decision to allow the company to undergo UK administration is then decided by the UK court.
It was concluded that Neil Kelly, CEO of BetIndex, received authorisation from the board to collaborate with Marcus Pallot of the law firm Carey Olsen to receive a Jersey court date and letter of representation, ensuring BetIndex would go into UK administration with Begbies Traynor.
Further details of the process of the operator’s decline were also revealed in court documents. On an 11 December 2020 board meeting, it was announced that Football Index was suffering losses due to its dividend exposure. As a result, co-owner and chief executive Adam Cole agreed to step down on the same day.
On 8 January 2021, Football Index gave its customers 30 days of notice for the removal of its in-play dividends from the platform. Football Index claimed that a replacement dividend was to be announced in its place. This replacement dividend scheme was later implemented on 29 January 2021 and increased monthly dividend liability by £80,000.
The operator then made a change in March – just after announcing plans to go into administration – that lowered customer dividends, saying that this was necessary to keep the business alive.
With mounting pressures on return payments, BetIndex announced in March that it would enter administration. The GB Gambling Commission also suspended its licence at this time, following a year long investigation. The Commission later said there had already been cause for concern, but believed that suspending the licence earlier could provide further financial shock and so make it more likely that customer funds would be lost.
After mounting pressure, BetIndex announced its claims process on 14 April for customers who were still owed money.
A hearing to decide how Football Index’s £4.5m player protection fund will be divided among bettors will take place today (21 May) at the High Court of England and Wales. A total of £3.2m will pay for funds in customer accounts at the time of administration.
However, there has been further discussion over the status of bets and dividends that were active at the time Football Index was suspended.
It was decided that the hearing will set a cut-off date for active bets. The proposed dates are 11 March, 26 March, and a time after 26 March.
Ahead of the hearing, BetIndex announced that it plans to relaunch Football Index, claiming that it will give equity in the business to individuals who held an active Football Index portfolio when it entered administration.