The UK Gambling Commission has made adjustments to its regulatory scope regarding digital gambling products, following an independent review into the collapse of BetIndex.
A number of areas for improvement were highlighted by the review, targeting not just the UKGC but also the Financial Conduct Authority.
New measures introduced by the UKGC include the factoring of ‘novel products’ – such as the exchange platform model of BetIndex’s Football Index platform – when assessing operator risk.
The Commission has also moved to strengthen its Memorandum of Understanding with the FCA in order to better escalate issues which ‘blur the lines’ between financial services and gambling enterprises.
“No amount of explanation of what happened to Football Index will take away the justifiable hurt and anger its customers are experiencing having lost, in some cases, life-changing amounts of money when the gambling company collapsed,” said Andrew Rhodes, CEO of the UKGC, who was appointed to the position in June.
“We accept and agree that we should have drawn a line under our efforts sooner, but this does not mean those customers would not have lost money in the event of the BetIndex company collapsing. Throughout this case we sought the best outcome for consumers within the scope of our regulatory powers.
“The review provides a number of helpful recommendations for how both regulators can work better together and for how our regulatory approach deals with novel products.”
Occurring during the UK government’s review of the 2005 Gambling Act, the decline of Football Index led to significant public discussion regarding the UKGC’s regulatory oversight of the situation.
After entering administration, Betindex’s UKGC and Jersey Gambling Commission licences were revoked and its membership of the Betting and Gaming Council was also suspended.
Subsequent criticism of the UKGC’s oversight as a result of the operator’s collapse prompted the government to launch the independent review of the regulator in April, with Malcolm Sheehan QC later appointed to lead the review by the DCMS.
“In recent years we have seen an increase in the complexity of business models and product offerings”, Rhodes continued. “The lines between what is gambling and other types of products, such as financial services or computer games, has become increasingly blurred and no longer neatly fit into existing statutory definitions of gambling.
He concluded: “Our actions were always focused on trying to protect consumers while we sought to bring the operator into compliance with regulations. This does not mean however that those customers would not have lost money in the event of the BetIndex company collapsing.”