Footstock Goes Belly Up as Football Index Domino Effect Rips Through Soccer Trading Vertical

Soccer trading program Footstock proclaimed Fri it had entered insolvency proceedings, simply IV weeks after the demise of Football Index, a site whose business organization example it emulated.

In an proclamation to players, the Germany-based political program said on its website it had surrendered its UK gambling license and ceased trading “with prompt effect.”

The company blamed the recent cave in of Football Index for “significant setbacks” and “unprecedented circumstances that make crushed our company inwards this important point of growth.”

“Expected and necessary funding existence set on ice, we can buoy no more yearner running game our Seedrs drive and valuable partners are pausing cooperations,” it said.

Like Football Index, Footstock billed itself as a combination of phantasy sports, betting, and stock-market speculation. Users would swop “shares” inwards pro association football players, whose value would vacillate based on metrics like on-pitch performances or real-world transference marketplace value. Users would obtain “dividends” based on the carrying out of their shares.

Panic is Contagious

But on that point is some debate near whether this business organization pose could of all time live sustainable in the long-term, since it relies on a invariable influx of new liquidity from unexampled players. Critics experience compared the mock up to a Ponzi scheme that was destined to implode.

On March 4, Football Index announced it was slashing dividends to ensure the “long-term sustainability” of the platform. Panic-selling ensued, causation the cost of shares to nosedive overnight.

According to The Times, Football Index’s players collectively missed around £90 zillion ($125 million) inward 24 hours.

Footstock makes no advert of its users losing money and blames its financial disarray on expected funding falling through. But it’s concentrated to believe that user anxiousness triggered by the Football Index ram is not responsible. Panic is contagious, after all.

‘Daylight Robbery’

One Twitter user described “waking upwardly to a #Footstock assemblage time value of £0.00 when it was over £200 yesterday and beingness told I have got no more cards when i hold over a hundred.”

“Insane, that this is allowed to happen,” they continued. “Daylight robbery.”

While Footstock and Football Index are required to donjon client pecuniary resource split up from operating funds as a stipulation of their licensing, the UK Gambling Commission offers no extra shelter to those monetary resource inwards the case of an operator’s insolvency.

The charge has been criticized for weakness to see the viability of Football Index’s stage business simulate during the licensing process. Many trust the operator should have got ne'er been licensed at all.

“What was the Gambling Commission doing the times when this dreadful do was exploiting and conning punters?” Labour MP Carolyn Frank Harris asked The Athletic earlier this month.

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