Why Did Football Index Crash?
Football Index, the self-styled “stock market” for football players crashed on the 11th of March 2021.
But why did this happen?
The company slashed its current “payouts” by 78–89% reducing the overall value of “bets” in circulation.
Furthermore, despite issuing these long-term “bets”, the platform's terms meant it did not have to offer “cash-out” for existing players. They could only sell to another user. Thus, when the “payouts” were changed, users lowered prices in order to sell to other users.
The supply of “bets” in circulation greatly exceeded marketplace demand and prices crashed.
Gambling Commission Failed to Protect Punters?
Since the crash and loss of funds, questions have been raised around the licensing of Football Index. Many of which are yet to be officially answered.
However, it appears that the UKGC did not understand the Football Index model despite granting a license, as stated by former CEO Adam Cole on the Football Index Guide Podcast (14th June 2020).
Football Index Podcast:
On the 17th of December Caan was invited onto the Football Index Guide Podcast to discuss a YouTube video he released on the 9th of December titled ‘Football Index: 5 Major Risks for Users’.
Welcomed by FIG, Sporting Panda and FI Dunwell they discussed the concerns that had been raised.
Now, since the crash of Football Index, there has been a follow-up podcast, reflecting on the previous three months.
Have a listen, it’s an open and honest summary:
You can find the FI Action group via the Sporting Panda tweet below.
Hopefully, the Football Index community will find a better solution for the current situation. We wish them all the best!
You can see the initial 5 Major Risks YouTube Video Here.