Andrew Cotton Director of Betting and Gaming
Report on Government's independent review of the collapse of Football Index is published
The report on the government’s independent review of the collapse of Football Index was published yesterday. To read the full report, click here.
It is important to note that the terms of reference did not include an assessment of how the product should have been regulated, nor was the purpose of the review to apportion blame for the company’s collapse. The report is however critical of the delays within both the Gambling Commission and the FCA in escalating the matter internally once concerns were identified and the delay in decision making and action given that regulatory responsibility remained unresolved for an extended period.
The report states that:
“The Review is intended to provide an objective account of what the Commission and other relevant regulatory bodies did, identify any lessons for them, and inform the Government’s Review of the Gambling Act 2005.”
The report recommends the following areas of improvement that should be considered in relation to the Gambling Commission:
- Prioritisation and enhanced scrutiny of novel products regardless of the size of the operator seeking a licence;
- Greater focus on fairness of terms at the licensing stage as fairness is likely to be influenced by the nature of the product;
- Consideration of the effect of the language of investment and the financial markets on consumer understanding of gambling products;
- Greater licensing and continuing scrutiny of divergences between described (at the licensing stage) and actual features of a product. The existence of such a difference should also be recognised as a potential warning sign that an operator may require closer regulatory scrutiny;
- Prompter decision making and action given that regulatory responsibility remained unresolved for an extended period;
- Recognition of the need for internal escalation as early internal escalation of unresolved problems is necessary to achieve effective regulation;
- Consideration of a different approach to customer funds in relation to long-term, tradeable products or whether additional levels of liquidity should be required of operators of such products reflecting some of the value of staked funds.
For more information and advice, get in touch with a member of our Gaming and Betting team today.