The decision of the High Court of England and Wales indicates that the player’s account funds – which are held in the player’s protection account – include winnings to be paid out based on events, until the 26th of March. This means that around £3.5 million will be paid by Football Index from the account, which had a total of £4.5 million.
The hearing dealt only with funds held in player accounts, with the status of money spent or held on active bets still undetermined.
A legal hearing on a cut-off date for account funds was required, as administrators Begbies Traynor said that bets that were open when the operator entered administration would still be open and accumulating dividends, a form of gain.
However, if these dividends were paid until the stakes expired, the £4.5 million player protection account would be out of stock until April 22, meaning that no player would be able to receive all the money that would be owed to them.
During the hearing to set this deadline, a representative of Begbies Traynor defended the selection of March 26, which is when administrative procedures officially began, as well as March 11 when the operator entered administration.
A separate attorney was appointed to defend the choice of a later date, which would have favored players with large open betting portfolios but little funds in their account.
The decision of the High Court
The case was first transferred from the Insolvency List to the High Court, in which Judge Robin Vos postponed his decision rather than deciding immediately. However, Vos has now chosen to set the cut-off date at March 26, which means that winnings up to that date must be paid.
Vos said that the Football Index terms and conditions clause relating to the protection of funds suggested that the trust was intended to cover a “right crystallized on the date the Insolvency Event occurs” rather than also covering future events.
The money in the player’s protection account is currently held by the County of Jersey, which administrators will contact to release the funds.
Football Index Says It Will Pay Its Customers
The operator said it will take between five and eight business days for these funds to be transferred to the Football Index payment provider, who can then distribute the funds to customers.
This will be done via the player accounts and withdrawal methods that were available when the platform was active. Accounts only became accessible on the web after the operator suspended their application.
“Once these funds are received, customers will be notified by email, and at that time, customers will be able to log into their Football Index account and place a withdrawal request,” the administrators said.
It will take an additional two to ten business days for customers to receive their funds.
The selected end date means that a surplus will be in the Player Protection Trust Fund account. The judge ruled that this surplus will be used to pay fees incurred by administrators – such as legal related to the hearing – and then will go to other creditors, including players with active bets.
Prior to the start of the hearing, the trustees said that the March 26 deadline would leave a £1.0 million overage in the account, suggesting that dividends worth around £250,000 would be paid and approximately £3.5 million would be distributed. .
Issues and points to be resolved
The status of funds held on the platform as open bets still remains undecided. Although the operator’s terms and conditions state that funds spent on active betting are not protected, part of this money can still be returned through a voluntary company agreement (CVA) or settlement as players would still be creditors of the business.
During the hearing, Lexa Hilliard QC, who represented the Begbies Traynor case, pointed out that clients would constitute the vast majority of creditors.
Prior to the hearing, BetIndex revealed that, as part of the CVA, it hoped to relaunch the platform, with lenders holding a 50% stake in the new deal. The relaunched platform would seek a pool betting license.
BetIndex went into administration in March, following a change to its dividend structure earlier that week, which the operator said was necessary to keep the platform alive. However, documents released before the hearing showed that the deal had already taken steps to enter management before the dividend change, although it continued to accept bets for three days before the management process was announced.
After the carrier collapsed, the British government launched an inquiry into how these events occurred and whether more could have been done by the Gambling Commission. Yesterday, the government selected Malcolm Sheehan QC to lead the investigation.
The Commission itself revealed that the Football Index had been under investigation for nearly a year before entering administration, but said it was concerned that the suspension of the operator’s license could have streamlined its financial problems, putting players’ funds at greater risk.