Football Index Collapse: Lessons Learned

[Mrs Sheryll Murray in the Chair]

I beg to move,

That this House has considered the lessons learned from the collapse of Football Index.

It is a pleasure to serve with you as Chair, Mrs Murray. This debate is about the lessons to be learned from the collapse of Football Index. I had a debate on Football Index in June 2022, but I am here again because I was alarmed to read reports in The Times and The Guardian just a few weeks ago about a new platform, KiX, which uses Football Index as a proof of concept and involves some of the people previously involved in Football Index. I do not want my constituents to be caught up in a scheme that replicates the problems of Football Index, so we need to learn the lessons.

The collapse of the supposed betting platform Football Index was mired in controversy, as the site proved to be incorrectly regulated for the majority of its lifetime. Those regulatory failures affected tens of thousands of people across the UK, many of whom lost substantial amounts of money. I am sure most Members in Westminster Hall today and across the House have received emails from constituents who lost life savings, struggled with their mental health and dealt with putting their lives back together after that failure.

Let me give a quick recap. The Sheehan report, which the Government commissioned, was damning in its verdict that there were regulatory failures from both the Gambling Commission and the Financial Conduct Authority in their work to protect customers from Football Index. According to the report, the failures go back to the beginnings of the platform. The Gambling Commission was made aware of the “go to market” function back in April 2015, but did not note that feature during the licensing process. It did not consider other aspects of the platform’s similarity to a stock market at the licensing stage, and the platform’s terms and conditions were not subjected to detailed scrutiny prior to 2019. The report states that at that point the Gambling Commission became aware of the full nature of the product, but it did not suspend the platform’s licence for another two years. That is crucial, because if the platform been taken down in 2019, it could have saved some customers huge amounts of money. The report also noted that, during that time, the Financial Conduct Authority expressed inconsistent views about whether the platform fell under its remit, and was driven by resource prioritisation, rather than by its legal responsibility to protect consumers.

Those failures cost victims dearly. Many lost their homes, their life savings or their wedding funds, causing them huge amounts of stress, anxiety and depression, not to mention financial difficulties for some. My constituent Collin spent months unable to work as a result of the stress. He told me:

“I feel a massive sense of guilt and anger that a huge amount of my family savings has been stolen. That money could have been used for my children’s future, house improvements, holidays and other investments.”

Many victims are reluctant to come forward due to the shame that they feel after being misled in such a way. That has not been helped by the language of the Government, who referred to support for “problem gamblers” in their response to the dormant assets consultation last year. To be clear, no one should have to feel shame if they are struggling with gambling addition, but that framing negates the fact that the product’s promoters branded it as an investment product.

None of the victims walked into a bookie’s and put £3,000 on an accumulator or a race. They were misled and instead believed themselves to be investors. They were misled and instead believed themselves to be investors taking risks, hedging funds and building a portfolio—something that would be normal for those who engage in the stock market. To suggest otherwise is to let the platform and the regulators off the hook.

There are unanswered questions. Since my debate in June 2022, there have been three different Prime Ministers, four Secretaries of State for Digital, Culture, Media and Sport, and four Ministers responsible for gambling, but as of yet, no one has been able to make much progress on this vital issue. In that time, I have heard countless more stories of the hardships suffered by victims as a direct result of these regulatory failings. Together, their financial losses amounted to as much as £124 million. They are desperately waiting for action and dealing with uncertainty. They fear that they may never see justice, and that they may never be compensated.

I pay tribute to the journalists who have been fighting to keep this issue in the public domain. Joey D’Urso at The Times, Ellie Pitt at ITV and Greg Wood at The Guardian have all helped to tell the story of the victims and have given them a voice. I encourage the Minister and those present to attend the all-party parliamentary group hearing on 30 April, so that they too can hear at first hand from those affected.

It is important that we keep the focus on this because so many questions remain. Although the Sheehan report was fundamental to exposing some of the regulatory failures, the text itself references the significant time constraints under which it was produced and the fact that it therefore could not take in the full amount of evidence that has since come to light. Some of the victims have lost everything, and they deserve to have their voices heard.

Having secured a meeting with the Minister back in 2022, the Football Index group has continued to gather and develop evidence that strengthens its case. However, I have met the group, and the Government have not accepted a submission from it. I am grateful to the current Minister for meeting representatives of the group, but after three long years, they deserve more—they deserve action.

There are ongoing concerns related to what the regulators knew and when, and whether there were additional opportunities to prevent the eventual outcome that were missed. It is my understanding that the current Minister was sufficiently concerned by what he heard to consider an independent review of the evidence by someone external to the Department and the Gambling Commission. No doubt the Minister will tell us himself exactly what he has been doing, but the action group are still waiting for progress on this issue. If we are to learn lessons from the collapse of Football Index, there must be proper, independent scrutiny of all the available evidence. I hope that the Minister will commit to that during this debate.

Turning to novel products, a process of examining what went wrong with Football Index is vital, so that we can protect people from such harm in the future. Unfortunately, recent developments have made this matter all the more urgent. As I said at the start of this debate, in a recent article in The Times it was revealed that the co-founder of the Football Index platform is working with others to create a new trading platform, citing Football Index as proof of concept. This is deeply worrying. I can only imagine the frustration and anger that victims must feel upon hearing this news; they will be concerned that others might be let down in the way that they were.

The new platform, KiX, will be a football cryptocurrency trading project that makes use of non-fungible tokens and cryptocurrency. Ministers have previously said that the Gambling Commission has strengthened its approach to novel products, and I understand that the commission is currently reviewing elements of the KiX product. However, the commission has also said that the product may lie outside the scope of regulation, given the involvement of NFTs and crypto.

On 23 April, the Government set out plans to overhaul gambling and admitted that Football Index blurred the boundaries between gambling and investing. If Football Index blurred the lines, KiX is seemingly crossing over them altogether to create a similar product in an unregulated market. Having seen the impact on Football Index victims, how could we possibly permit another product that preys on football fans by persuading them to part with hard-earned income and invest in their knowledge of football?

I thank the hon. Member for giving way and congratulate her on securing the debate. She talked about susceptible fans sometimes being preyed on when it comes to gambling. Does she agree that one of the big emerging problems in the past few years has been the virtual epidemic of gambling companies sponsoring almost every single Premier League team, to the extent that young people think of and see their heroes as being part of the gambling industry, which is compounding the problems that she is rightly analysing today?

I thank the hon. Member for his intervention. Of course, we could have a whole different debate on the influence of the gambling industry on football—indeed, I am sure that in future months we will have such a debate. But today that link between gambling and clubs and their players, with or without their consent, is being used to attract people to gamble money.

As I was saying, I fear that the product that I am talking about today—KiX—is dangerous and has the potential to bring misery to more people. I therefore urge the Minister to do everything he can to ensure that this platform does not launch without the utmost regulations being in place. To put it simply, that is the very least that the victims of Football Index deserve and we do not want to see more victims being created through new platforms.

I also bring to the Minister’s attention another company—StocksFC. I am told that it has been operating in the crypto space for about a year. Alarmingly, a quick glance at its website and at the Twitter account of its head of marketing shows the dangers of this type of platform. It is clearly masquerading as a stock market and is manipulative in its language, suggesting to people that they are “investing” and sharing the totals of profits made on their supposed investment.

I will add that despite this platform allegedly being a crypto-based platform, there are no entries about it on the blockchain and users in the UK can deposit money straight into its system from their debit cards. I am sure that the Minister will agree that that is deeply concerning and a danger to consumers. Does he know whether the Gambling Commission is aware of this operator and if so, what discussions has he had with the commission to ensure that consumers are being sufficiently protected?

Many victims of the original Football Index collapse are vulnerable and eager to recoup their losses through any means, and I fear that new platforms could prey on their vulnerability. I hope that the Minister will raise these concerns with the Financial Conduct Authority, and that the FCA and the Gambling Commission will work in partnership to ensure that nobody is left victim to an unregulated football stock exchange ever again, consulting with the Football Index action group to learn from the real-life examples that it can provide.

I remind Members that they should bob if they wish to be called in the debate.

It is a pleasure to see you in the Chair this afternoon, Mrs Murray. I thank my hon. Friend the Member for Blaydon (Liz Twist) for securing the debate and for the work she has done over a number of years to highlight this issue, as well as other existing or future problems that need to be tackled.

We know that Football Index has been described as

“the biggest scandal in British gambling history”,

with thousands of customers suffering cumulative losses of up to £134 million. It is a scandal and a failure. I am sorry to say that we are all getting rather too used to saying in this place that, once again, people have been let down. Whether it the sub-postmasters, the Women Against State Pension Inequality Campaign, the leasehold scandal, infected blood, the loan charge, mortgage prisoners, Equitable Life or the myriad other investment scandals that have seen people’s life savings stolen, too often in this place we end up saying that what happened was totally wrong and should not be allowed to happen again. But yet again that is where we find ourselves today.

It is little wonder that public faith in our elected representatives continues to erode when Parliament seems to be incapable of learning from past mistakes. Whether it is regulatory failures, loopholes or bad actors, this place seems unable to stop them. Consumer protection and other basic safeguards for our citizens seem to have gone missing in action. We are failing in our basic duties; light-touch regulation has clearly had its day. We know the terrible stories of those affected by Football Index—losses into seven figures, individuals driven to the brink of suicide, marriages collapsed, families torn apart and life savings vanished—and those impacts have been part of all the other scandals I mentioned. Too many people in this country have suffered grave injustices that we seem incapable of putting right.

Football Index has been described as a Ponzi scheme. As we have heard, its executives were warned soon after its launch—in fact, as early as 2016—that their so-called football stock market would prove unsustainable. All the warnings came some five years before its eventual collapse, leaving serious questions about how effective regulation was. According to newspaper reports, the Gambling Commission was warned in January 2020 that Football Index was

It is a pleasure to speak in the debate with you in the Chair, Mrs Murray. I congratulate my hon. Friend the Member for Blaydon (Liz Twist) on leading the debate and on her excellent work on this issue. I have two constituents who were affected by the collapse of Football Index in 2021. One told me he had lost £20,000 as a result. He said:

“I am a father and soon-to-be husband whose family has been swindled by the stress, guilt and shame which this has brought me in such an important part of mine and my family’s life. This has put me in some very dark places and I have had thoughts and stress like I’ve never experienced before.”

Failings by a number of organisations led to this impact on customers, which was highlighted in the Government’s independent report into the regulation of Football Index, led by Malcolm Sheehan KC. First, the report found that BetIndex Ltd, which traded as Football Index, did not properly notify the Gambling Commission of the nature of its product in its licence application, and nor did it inform the commission of changes to its product as it should have done.

Secondly, the report found that the Gambling Commission could have responded better, including through better scrutiny of the product offered by BetIndex in 2015, better monitoring of the development of the product, and quicker decision making once it identified in 2019 that BetIndex appeared to be operating outside the scope of its licence. Indeed, as my hon. Friend the Member for Blaydon said earlier, if the platform had been taken down in 2019, that would have saved money being lost by a number of the victims. Thirdly, the report identified areas of improvement for the Financial Conduct Authority, including its speed of response to requests from the Gambling Commission and the consistency of messaging on its regulatory responsibilities.

It is welcome that the Government have committed to implementing the review’s recommendations and that, in September 2021, the Gambling Commission and the Financial Conduct Authority agreed an amended memorandum of understanding, including on response timetables and the process for escalation of unresolved issues. However, I understand that people such as my constituents, and so many others, still feel very upset and angry at the loss of capital as a result of the collapse of Football Index.

I congratulate the hon. Member for Blaydon (Liz Twist) on bringing the debate forward. She will recall leading a debate on a similar subject here a couple of years ago, and I was very fortunate and pleased to support her, just as I regularly support other Members in Westminster Hall, which is always a pleasure, by the way, because the issues are really important. The hon. Lady is right about this issue: it is important—it is important because some of my constituents have found themselves in this terrible malaise, having lost money, so it is good to return to it.

If the Minister does not mind me saying, I am very pleased to see him in his place, as he always tries to answer constructively the questions and queries we pose to him. I was remarking to him earlier that he performed really well in the debate on the Football Governance Bill last night in the main Chamber, where his final comment referenced, “They think it’s all over! It is now!” I am old enough to remember that saying in 1966. I know that the shadow Minister, the hon. Member for Barnsley East (Stephanie Peacock), is far too young to remember that, but a whole lot of others here are not—I better be careful not to say too much now, or I will be reprimanded.

I took part in the last debate on the impact that Football Index has had on all our constituents, including mine—I will not mention their names, but I will refer to them. It is really good to be back here to discuss what lessons we have learned and what has changed. That was the question posed by the hon. Member for Blaydon: what has changed? Hopefully, the Minister can reassure us in his response.

The collapse of Football Index was detrimental to so many people, and some were undoubtedly financially ruined—I know someone who sadly was, although I am not able to put their name on record, but I have seen the detrimental effects. The situation has also highlighted the importance of being gambling aware. It is important that we get it right this time and the next time round. I was hoping that the hon. Member for Swansea East (Carolyn Harris) would be here, because she has been such a stalwart at the forefront of gambling issues. I admire her greatly, and she has taken up the subject in this House with real enthusiasm in order to make changes.

The issue is that when it comes to gambling products, we understand that there are rules and regulations in place. They are not to my liking, but they are there. This scheme and the successor schemes are designed to work in the grey areas—the dark shadows—of gambling. The Financial Conduct Authority did not even know whether it was responsible for them.

Hopefully, down the line somebody will be able to hold these companies to account. Their will is not to create an exciting thing for football fans to get more involved with and enjoy a game of football; their will is to take money out of people’s pockets. We know plenty of gambling products that are already doing that. I am not sure there is much in the White Paper at all that touches on FI. There has to be something that ensures the regulations are clear and understandable. It must also stop KiX: if KiX is up and running, plenty of other organisations behind it will be waiting to do exactly the same thing, and all they will do is extract money from punters’ pockets.

I thank the hon. Gentleman for that intervention. He has posed a few questions that are pertinent to the debate. I look forward to the contributions from the SNP spokesperson, the hon. Member for North Ayrshire and Arran (Patricia Gibson), and the shadow Minister, the hon. Member for Barnsley East (Stephanie Peacock), and the questions they will pose in turn to the Minister.

We need to see a sea change that does away with the grey areas that the hon. Member for Inverclyde referred to and the uncertainty, where people can get sucked into the process. Ensuring that customers can get their money back is of major importance. Early day motion 697 was tabled on 25 November 2021. I am pretty sure the hon. Member for Blaydon was instrumental in tabling the EDM and ensuring that others signed it. I signed the EDM to show support and to urge the Government to do more to ensure that those owed money receive a full reimbursement.

As I have stated before, gambling is a personal choice. I am not here to tell anybody what they should or should not do; I will always try to give people choice if I can. At the same time, sometimes Government have to encourage people to be more aware of what the choices are. As the hon. Member for Inverclyde said, there are clearly occasions when that does not happen, and that is why it is important to have a system in place. While gambling is a personal choice, we hope that those choosing to do so are educated about the potential risks. The losses can be huge. I read one story—I thought about it long and hard—about a young man, probably in his early 20s, who lost £165,000: my goodness! He lost what he did not have. He found himself in all sorts of problems, and he stated that it completely turned his life upside down. How could it not, given that he lost that amount of money at an early stage in life?

Many have openly referred to the shame they feel and how such things have affected how they look at gambling. There is absolutely no doubt that the Financial Conduct Authority should have regulated Football Index, and there are still questions to be answered. I know this may not be the Minister’s responsibility, but I would really like to know what discussions have taken place with the Financial Conduct Authority and what it is doing to regulate the situation. There are still questions to be answered.

It is a pleasure to serve under your chairpersonship, Mrs Murray. I congratulate my hon. Friend the Member for Blaydon (Liz Twist) on securing this debate on such an important issue, which has caused a great deal of suffering for thousands of people.

Several years ago, I met a group of parents outside Hillsborough stadium whose loved ones had tragically taken their own lives after struggling with gambling addiction. The victims were mainly in their 20s and 30s. The parents were taking part in the Big Step, and were walking between five Yorkshire football grounds to call for an end to gambling advertising and sponsorship in football. Thirty-five clubs across the UK have signed the Big Step’s pledge to eliminate gambling advertisements in football, and Premier League teams have agreed not to take front-of-shirt sponsorship deals from gambling firms from 2026. However, that leaves us in the nonsensical situation whereby we recognise the dangers posed by gambling sponsorships but are happy to relegate them to the sleeves of football kits and advertising hoardings around stadiums, despite research showing that only 5% of gambling logos showed during live Premier League football matches would be affected by the front-of-shirt ban—in my opinion, that is 5% too many.

We need to do far more to combat the blight of gambling sponsorship in sport. I remain disappointed that the Government’s White Paper on gambling reform, which required the introduction of a cross-sport gambling sponsorship code of conduct, has been continually delayed. Will the Minister tell us when that code of conduct will be introduced? Will he investigate KiX, which is now operating instead of FI?

Sadly, any changes to legislation on football sponsorship are too late for the users of Football Index. Prior to its collapse, Football Index sponsored the shirts of three English Football League teams. Those sponsorship deals helped to convey an aura of trust and respectability that may not otherwise have existed, furthering the dupe that it was an investment platform. Football Index was more than happy to play into that misconception. Internal company documents reveal that Neil Kelly, the director of BetIndex—the Jersey-based company that ran Football Index—said:

I am pleased to participate in this debate. Like others who have spoken before me, I congratulate the hon. Member for Blaydon (Liz Twist) on bringing it forward. It is important that we learn lessons and remember the mistakes made during the collapse of the online gambling product, Football Index. I also pay tribute to my hon. Friend the Member for Inverclyde (Ronnie Cowan), who has done a huge amount of work on this issue and in the wider gambling context generally.

I remember well when Football Index collapsed in 2021. I remember a number of constituents contacting me in despair, some having lost significant sums of money in what they believed was an investment because it had been marketed as such. It was deliberately marketed to look like a football stock market where customers could invest in players, collect dividends based on performance and sell their shares in a player at a profit if they did well. However, when operations were suspended, customers lost more than £90 million in open bets, or in other words, investments in players.

What became clear is that Football Index was akin to a pyramid scheme, operating unsustainably until its collapse by paying customers dividends using new customers’ investments. That collapse represents the biggest collapse of a gambling product in the UK. However, relatively speaking, it has not attracted the attention that it ought to have done. We know that the Gambling Commission had been warned some 14 months prior to the collapse that the platform was an

“exceptionally dangerous pyramid scheme under the guise of a ‘football stock market’”.

Its business model was fundamentally flawed and spiralled out of control.

As we have heard, the issue is that many of those using the platform were not fully cognisant of the fact that they were gambling, participating in a pyramid scheme dressed up as something quite different. If somebody does not know that they are gambling, they surely cannot be fully aware of the risk to which their money is exposed. The reality is that Football Index’s deliberate imitation of an investment product led to

I have one of those numbers going around in my head. It is said that £90 million was lost. Well, it was not lost. It is there somewhere. Someone has that money in a bank account somewhere; it did not just disappear into the ether. We are trying to find redress for people who have lost tens of thousands of pounds. If we identify that money, surely there is a way. Even if it is in a bank account in Jersey, there has to be a way of paying redress to the people who lost it in the first place.

I thank my hon. Friend for that point, but I also urge the Minister to look carefully at the suggestion of David Hammel from the Football Index action group. I agree with Mr Hammel, and I want the Minister to consider his proposal for how redress can be managed for the victims of this scandal.

It almost goes without saying, but I will say it anyway, that such a fundamental regulatory failure must not happen again, yet Members have raised concerns about the co-founder of Football Index being involved in a new trading platform, KiX, that has striking—chilling, even—similarities to the one under discussion. I hope that the Minister will use his role to ensure that regulators keep a close watch on that new product. We must ensure that the same mistakes are not repeated, and that it is clear to all users whether a site is a gambling site or an investment site. There should never be any dubiety that the customer has to work through; it should be clear and front-facing.

I am sure the Minister will agree that this must not happen again. I ask him to think carefully about the suggestion from Mr Hammel about how we can recompense users of Football Index without directly using taxpayers’ money.

It is a pleasure to serve under your chairship, Mrs Murray. I will begin by paying tribute to my hon. Friend the Member for Blaydon (Liz Twist) for securing this important debate and for all her work on this important issue.

The collapse of Football Index three years ago was devastating for many people up and down the country, as we have heard. Football fans had been told that they could put their money and confidence in players who they identified as rising stars, and were promised that they would be paid dividends if they were correct. It was advertised as the world’s first football stock market, which was misleading to users as they believed they would be using the football knowledge they had gathered over years to make money on the scheme, rather than participating in gambling.

After administrators were called in, the collapse took an estimated £90 million in customer funds. Victims have formed the Football Index action group and I pay tribute to its work. It is campaigning to ensure that the events that led to the loss of that huge amount of money never happen again, which my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) spoke about so well. Some users lost hundreds of thousands of pounds, as the hon. Member for Strangford (Jim Shannon) highlighted.

Following the collapse, the Gambling Commission decided to suspend Football Index owner BetIndex’s operating licence in 2021. The Government then commissioned a review by Malcolm Sheehan KC of the events surrounding the establishment and subsequent collapse of Football Index, with the intention of learning lessons from the mistakes made. His report concluded that BetIndex failed to properly inform the Gambling Commission of the nature of the product in its licence application and did not inform the regulator of changes to the product after its launch as it was required to.

The Football Index action group includes that among its criticisms of the model, arguing that everything about the index sought to brand it as an investment product rather than a betting site, as my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Gill Furniss) outlined. Indeed, one of the index’s two main features, the “go-to-market” feature, was not communicated to the Gambling Commission as part of the original application, flouting the commission’s expectation of openness and transparency during the process.

My hon. Friend is presenting an excellent summary of the failures of Football Index. Like others, I have constituents who lost large sums of money. I am concerned to hear that a new platform called KiX—a football cryptocurrency trading platform modelled on Football Index—has been set up with the involvement of Adam Cole, one of the founders of Football Index. Should the Government not ensure that the FCA and the Gambling Commission both look into KiX at this early stage and that the appropriate regulatory activity happens this time so we do not see a repeat of Football Index?

I thank my hon. Friend for his intervention and I will come on to that point in just a moment.

The rapid growth in technology and our growing awareness of the impact of gambling harms mean that changes to our gambling regulation are now long overdue. It is important that we revise our gambling legislation to avoid incidents such as the collapse of Football Index in the future. Those who flout the rules of the regulator should be punished for their actions so that customers can be sure that those operating in the market are legitimate.

That has sadly not been the case, however, as reports emerged this month that the co-founder of Football Index, Adam Cole, is now helping to launch a product similar to the collapsed platform. That will be released as the new football cryptocurrency trading project KiX, as has been mentioned. The Football Index action group spokesperson, David Hammel, described that as

“a real kick in the teeth”

for victims. I would like to raise those concerns with the Minister and ask him why Adam Cole has been allowed to be an integral part of a new platform that mirrors Football Index.

We have heard about the devastating effect that losing money through Football Index has had on the mental health and lives of users. It is clear that more must be done to ensure that vulnerable people and families are protected. The Labour party welcomes the measures outlined in the gambling White Paper with the intention of protecting vulnerable people from gambling harms and financial detriment.

Examples like the collapse of the Football Index outline the serious threat that not having the right legislative and regulatory protections in place can cause to consumers. I hope the Minister will listen to the concerns of the Football Index action group, and that he can tell us what the Government have been doing to ensure that this can never happen again and how they can learn from past mistakes.

It is a pleasure to serve under your chairmanship, Mrs Murray. I thank the hon. Member for Blaydon (Liz Twist) for tabling this debate. I know she also secured a debate in 2022 on the impacts of the Football Index collapse. I would like to acknowledge the contribution she has made to ensuring that these events receive the attention that they deserve. She is an admirable representative of those in her constituency and others who have been affected. The Government appreciate, and I certainly do, the impact these events have had on them and many others. I personally offer my sympathies to all of those affected financially by the collapse of Football Index.

I thank all hon. Members for their contributions today. I also want to say thank you to David Hammel for his campaigning work on behalf of people who have lost money as a result of these events. I have met Mr Hammel and know that he has engaged administrators, regulators and politicians on behalf of those affected.

Today’s debate has been valuable and I commend all those who have contributed for their thoughtful comments. It has been important for me personally to hear the perspective shared this afternoon on this important topic. I want to be clear that I and the Government recognise the serious consequences that the collapse of Football Index has had on consumers. As I said, I sympathise with all those affected. It is important that we ensure that a similar scenario cannot happen again.

I will not repeat the background to these events, as that has been well covered by colleagues. I want to focus on the action being taken following the independent review of the regulation of Football Index, led by Malcolm Sheehan KC. I thank him for that work. His report examined the regulatory circumstances around the granting of a licence to BetIndex, its subsequent suspension and the company’s ultimate financial failure. Importantly, it identified areas, as others have said, where the Gambling Commission could have been more effective in responding to the challenges posed by this novel product. It also highlighted where the FCA could have co-operated more effectively with the commission.

Is the Minister saying that the Gambling Commission alone will decide whether KiX is given a licence to bring its products to the marketplace? I have a meeting with the Gambling Commission at 4.30 this afternoon and I would like to ask it that question, too.

The hon. Gentleman interrupted me just before I was going to say that the commission and the FCA are already engaging to establish the details of the product and to agree the appropriate steps.

There have been reports that two individuals previously involved in running Football Index are involved in KiX. Adam Cole was the co-founder of Football Index. He surrendered his personal management licence in September 2021 while under review, and the commission reached findings of fact regarding his involvement in Football Index. Those would be considered if he were to make a new application for a personal licence.

The commission also wrote to Abdullah Suleyman, the former head of trading at Football Index, to confirm the nature of his involvement in KiX. Following the letter, he surrendered his personal management licence on Monday 22 April.

I recognise some of the steps that have been taken, but this comes down to the fact that we do not want to see people being taken in in the same way as they were with Football Index. It is great that those individuals have given up their personal management licences, but they have already shared their information and used their experience to set up a new system. What more can we do to make sure that people in the UK are clear about the status of this and that it is properly regulated?

I was going to come on to that point. I reassure colleagues that the commission will continue to take a very active role in the monitoring of this product, and the FCA is also looking into the KiX business and will take appropriate risk-based action if it identifies that any of its activities fall into the FCA’s remit. However, I will raise this issue with both organisations again to ensure that everything is being done, because, like everybody else here, I do not want this to happen again. I hope I can reassure the House that the commission has been monitoring the market for several years for potential products that attempt to replicate Football Index. It has intervened in several instances. Although it would not be appropriate for me to name those businesses, that demonstrates the commission’s proactive work in this area.

The hon. Member for Blaydon raised the issue of StocksFC. The Gambling Commission is engaged with StocksFC and is monitoring the company at this moment. I will write to the commission for further information on that product and ensure that everything is being done to monitor it.

I want to emphasise the point that my hon. Friend the Member for Blaydon made, but I also want to pose a question: what credibility does the Minister think the Gambling Commission has now, given that so many people have lost so much money? As for the commission posing the question of KiX, “Is it gambling?”, if it is based on the Football Index proof of concept and the expertise going into it is from Football Index, it is Football Index mark 2 in a different form. Hon. Members have all outlined how much this was not an investment and how much it was gambling. In fact, questions of compensation are affected by that, in that Ministers have said that taxpayers’ money should not be used to compensate people for gambling losses. So it seems to me that it is a bit of a joke to ask, “Is it gambling?” Do we have to ask that when it so obviously is?

I understand the hon. Lady’s point, but it is important that these things are looked at properly, under the remit of the existing legislation. The Gambling Commission has done a lot of work in this space to try to deal with the grey area that the hon. Member for Inverclyde (Ronnie Cowan) mentioned. I want to come on to that point, because the cryptoasset side of things brings in another area of work.

I assure Members here that I will speak to my Treasury colleagues to highlight this issue, and to ensure that we do not find ourselves in a position like this again and address each of these issues. I am confident that the relationship between the Gambling Commission and the FCA is much improved and that the regular meetings between the two organisations will ensure that there is not a slip again. However, in order to get this right, I am more than happy to speak to colleagues in other Departments to ensure that no cracks still exist.

I want to press the Minister: can he assure me that he will go away and look at the suggestion made by David Hammel of the Football Index action group about a route to deliver compensation without having to take it directly from the taxpayer?

I think it would be worth more than my life’s worth to commit Treasury colleagues to a policy, but I understand the hon. Lady’s point. I have seen that suggestion and I am sure that Treasury colleagues will have views on it. I will raise that with them and write to hon. Members following their response.

I thank everyone who has contributed to the debate. I hope that I have been able to provide clarity about some of the lessons that have been learned from the collapse of Football Index and the action that has been taken by the Government, the Gambling Commission and the FCA as a result. I understand the real consequences that people have felt. This debate has been invaluable for me to ensure that we consider all the issues that need addressing and speak to colleagues across Government so that we do not see this awful situation happen again.

I thank everyone who has taken part in this debate, including my hon. Friends the Members for Ellesmere Port and Neston (Justin Madders) and for Worsley and Eccles South (Barbara Keeley), the hon. Member for Strangford (Jim Shannon), and my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Gill Furniss). I thank the shadow Front Benchers, the hon. Member for North Ayrshire and Arran (Patricia Gibson) and my hon. Friend the Member for Barnsley East (Stephanie Peacock), and I thank the Minister for his response.

I have a few points to make. As is usual these days, people have been tweeting points at me all the time as well, so I was watching those. The main thing I want to say is that we all want to ensure that we learn the lessons and make it not possible for people to be fooled—to be misled—in this way again. That is what our attention must go to.

I am particularly concerned that we should not see people falling through a gap in the regulatory frameworks, whether that involves the FCA, the Gambling Commission or any other organisation. It is really important that we not only reach memorandums of understanding but ensure that that works and, if neither one seems suitable, that we look at what on earth we can do to make sure that the gap is plugged in the meantime. That is really important for people.

I note that the Minister has undertaken to speak to the Treasury, which is really helpful. Arguably, we could have been having a debate in Treasury time saying what happened and what went wrong. It is really important that the Government work together to ensure that people are not misled and not required to look at the tiny print at the bottom of a website to find out the status of a scheme.

Finally, in news hot off the press, we talked about the FSCS, and I understand that there are currently 10,000 users on that scheme and that we are still looking at it. I do not expect the Minister to be able to respond on that, but it would be helpful if we looked at it outside this debate.

I thank everyone for participating. Let us make sure that what happened with Football Index is not allowed to happen again.