Regulation

Terms of Reference: Independent Review of the Regulation of BetIndex Ltd

Published 7 June 2021

© Crown copyright 2021

This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.

Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.

This publication is available at https://www.gov.uk/government/publications/review-of-the-regulation-of-betindex-limited-terms-of-reference/terms-of-reference-independent-review-of-the-regulation-of-betindex-ltd

Purpose

The purpose of this independent review is to examine the regulatory circumstances around the granting of a licence to BetIndex Limited, its subsequent suspension and the company’s ultimate financial failure. It will consider the actions taken by the Gambling Commission and other regulatory bodies regarding this complex betting product. It is intended to provide an objective account of what they did, identify any lessons for them, and inform the government’s Review of the Gambling Act 2005 which is considering whether changes are needed to the regulatory framework around gambling, including the Commission’s powers and how it uses them. The Commission’s regulatory investigation into BetIndex Ltd is continuing. This review is separate to that investigation and will be carried out and report in a way which will not compromise it.

Background

BetIndex Limited (“BetIndex”) allowed customers to buy notional “shares” in footballers as a way of placing bets on their future performance and press coverage with returns taking the form of periodic “dividends” paid out according to BetIndex’s formula. The Gambling Commission issued a licence to BetIndex in September 2015. In May 2019, an internal compliance assessment flagged a number of concerns, and in July 2019 the Commission contacted the Financial Conduct Authority to ask for its view on BetIndex’s activities. The Commission launched a formal licence review under section 116 of the Gambling Act in May 2020 which was still in train when in March 2021 it suspended BetIndex’s gambling operating licence and the company entered into administration.

Objectives

This review is intended to provide an independent expert account of what happened in this case and consider the lessons to be learnt for the future. We expect the review to report on:

  1. The actions taken by the Gambling Commission in:

    a. Licensing BetIndex, including its assessment of the company’s financial circumstances as part of their suitability to hold a licence.

    b. Monitoring changes to the product offer and ensuring the operator’s compliance with the gambling licence conditions.

    c. Responding to concerns raised about the product and operator in the course of internal compliance activity and/or following interventions from third parties including customers and the Advertising Standards Authority.

    d. Reviewing BetIndex’s gambling licence from May 2020, including how it cooperated with other regulatory bodies.

    e. Deciding to suspend BetIndex’s licence in March 2021.

  2. The actions taken by the Financial Conduct Authority in:

    a. Responding to the Gambling Commission following their initial approach.

    b. Considering whether the product amounted to a regulated activity under the Financial Services and Markets Act.

  3. The degree to which the Gambling Commission and other regulatory bodies work together in relation to licensed gambling operators offering novel products, and if better working between regulatory bodies can be facilitated in future.

  4. What, if anything, the Gambling Commission and other relevant regulatory bodies could have done differently to better deliver their statutory responsibilities and the three licensing objectives set out in the Gambling Act, and whether this could have:

    • Prevented the product from being offered in the form that it was

    • Avoided the collapse of the product and related losses to customers

Outputs

The independent expert should provide a report for publication by the government which seeks to answer the questions listed above. The report should provide recommendations, if required, as to changes to regulatory practice or to gambling legislation so as to provide necessary and proportionate protection for the public in relation to complex betting products.

Scope and methodology

The review will cover the period from September 2015 to 11 March 2021 when the Gambling Commission suspended BetIndex’s licence. The reviewer will have access to the necessary government and regulator held information to conduct the review of their decision making and will be able to meet key individuals if desired, in accordance with any applicable legal requirements. This independent review is distinct from the ongoing regulatory action by the Gambling Commission against BetIndex’s operating licence and its Personal Management Licence holders, and should not in any way undermine that process. The administration process is progressing through the courts and is also separate to this review.

Timing

The report, including any recommendations, must be submitted to the Secretary of State for Digital, Culture, Media and Sport and the Economic Secretary to the Treasury for publication in summer 2021.

Back to top