Jersey Gaming Commission Blacklists Football Index Founder Adam Cole
Posted on: May 31, 2022, 07:29h.
Last updated on: May 31, 2022, 11:14h.
Football Index, once a rising star in the UK gambling scene, crashed and burned in a fireball in March 2021. The man who proved to be incompetent at running a gambling operation, Adam Cole, now finds himself on the Jersey Gaming Commission’s (JGC) blacklist.
Cole can no longer hold any position or undertake any activity in any business the commission oversees. He can, however, apply to the JGC to modify or dissolve its order. The appearance of Cole’s name on the blacklist is effective as of April 6, although the commission only now added it.
The JGC, in March of last year, suspended Football Index’s license. At the time, the commission was launching an investigation into how the soccer trading platform suddenly became insolvent and lost over $125 million in users’ funds. The commission declared BetIndex, its parent company, ineligible to hold a Jersey license and removed its license in October.
Cole at the Center of Investigation
The JGC, in addition to scrutinizing BetIndex, also investigated Cole’s ability to manage a company. As a result, it concluded that he should not be allowed to participate in or work with gambling businesses.
Football Index went bankrupt in March 2021 after BetIndex announced that it would go into administration, similar to bankruptcy. This led to the UK Gambling Commission (UKGC) suspending its license.
This was after Football Index announced Cole would leave his position as CEO of Football Index at the end of 2020. That was part of a larger “reset” of the company’s operations, which forebode potential financial troubles.
Subsequently, the Department of Digital, Culture, Media and Sport (DCMA) took a closer look at the company. It revealed that the UKGC was remiss in its oversight of the company, compounding the already deteriorating situation. This was the primary reason Neil McArthur resigned as head of the regulator.
The DCMA accused the UKGC of being too slow in regulating Football Index. It questioned how the commission could not be aware that an operator was offering a product that it might not have been licensed for in more than three years.
The UKGC acknowledged that it may have dropped the ball, but defended its decision not to suspend the license earlier. It asserted that the company would have collapsed quicker if it had. On the other hand, it could have prevented users from losing millions of dollars.
Doomed to Fail From the Start
Football Index allowed users to trade and buy “shares” of soccer players. Those shares were worth dividends depending on how players performed on the field.
This system was flawed at its core. It was impossible for the system to accurately price shares (bets) when the firm would have to pay dividends on every bet for the entirety of a player’s career.
This attempted imitation of a traditional investment product had consequences for both Football Index and users. Depositing large sums of money and staking all or most of it in shares was the only way for users to make a profit – cash balances couldn’t earn dividends. This meant that only a small fraction of the money users deposited with the site received protection if the platform failed.
Football Index ignored warnings that it wasn’t anything more than a Ponzi scheme. As a result, users paid the ultimate price for their efforts, losing all they had invested.