The Football Index

[leicesterisme]

53 minutes ago, JimmyB said:

I apologise to anyone here that might have deposited on the back of my positive posts in this thread, I, and everyone I know never saw this coming, I’m absolutely gutted for everyone involved. 

I got quite a few mates involved over the last few years & I feel terrible about it now but like you say we literally have done nothing wrong, it's them just completely moving the goal posts. 

[foxfanazer]

Feel bad for anyone that's lost. Contemplated going in big on it a few times but luckily chickened out. Disgusting what they've done 

[Costock_Fox]

I got into this about a year ago but wanted to test it out before potentially putting a grand or something into it.

 

I tested it by trying to sell shares in players but realised the listed prices were actually bullshit and I wasn’t making money.

 

The other thing that got me was how adamant some of the big investors were on social media that it was all legit and people definitely shouldn’t cash out. 
 

So glad I didn’t do what I wanted to do, makes me feel sick thinking about it. Sorry to anyone that did.

[lildave3]

They closed my account last year, at the time I was fuming as it was the real moneymaker thanks to their offers. Looking back they closed it at the perfect time for me as it started going downhill from then on and could have lost a fair bit. 

[Dan LCFC]

I was up a decent amount a year ago but like someone else I hadn't put any money in for a few months now and eventually just sold whatever I could.

 

They kept changing things and it just bored me in the end. Not surprised it's gone to shit. Could see there being a similar type of thing in future.

[Steve_Guppy_Left_Foot]

I'm not up on this, I've googled it and not got anything concise to go on, I get you buy shares in a player, if they do well their price goes up, if it goes bad their price goes down, what's happened? 

[peach0000]

5 hours ago, Steve_Guppy_Left_Foot said:

I'm not up on this, I've googled it and not got anything concise to go on, I get you buy shares in a player, if they do well their price goes up, if it goes bad their price goes down, what's happened? 

So I'll explain it the best I can. In the past you would buy and sell shares as you describe and shares would pay dividends based on performance which essentially decided the value of a share. It started going wrong about a year ago when they introduced order books. Instead of being able to buy and sell shares instantly to football index you now had to trade between each other by putting players up for sale and waiting for someone to buy them. This lead to two problems, the first being by taking away the ability to instant sell shares to football index any money in the players outside the top 200 essentially became trapped and secondly it lead to buyers undercutting with offers, which constantly dragged the market down.

 

So that is the background to how things started to go wrong and about the platform in general. Now on to what happened a few days ago. So as the market was failing football index were doing offers, things like 8% deposit bonuses as well as increasing dividends. Dividends on players rose to a maximum of 14p (I think) per share per game week . This dividend rise and the offers kept the prices artificially high as there was little new money coming in and people already using the platform were leaving. Now this is where it's gets dodgy. While the prices are high football index mint loads of new shares of the top players, while doing that they are telling everyone that they are in an amazing financial position. Then overnight they reduce dividends down to a maximum of 2p per share and the market inevitably dives by about 90%. 

 

The simplest way I've seen it described is that it is like putting a bet on Leicester to win the league at 5000/1 then after the Man City game the bookies saying now it looks likely they'll only pay out 4/1 on that bet. 

[JimmyB]

Peach has summed it up really well. Money always felt relatively safe, the constant pumping of the product, it’s finances and future plans coupled with the fact they were in the middle of a massive marketing push made it feel like a very credible business. 
 

The Football Index badge is still on the shirts of Forest and QPR and doing the rounds on the pitch side advertising boards at nearly all premier league matches. This is not some dodgy backstreet bookie gone pop, it’s millions and millions of pounds up in smoke and I still can’t work out how they managed to screw it up so badly. 
 

The concept is so good and so much fun but they’ve massively over complicated it to a point where even they didn’t know what was going on. 
 

Now I just have to wait for for it to hit the mainstream media and answer all the calls from family that knew I was balls deep. 
 

The money lost is gutting but most of all myself and everyone else I know involved just feel so stupid to have been diddled like this. Everything just feels off with how it’s gone down, criminal almost. We’ll see what transpires I guess. 

[AllGoneTitsSchlupp]

haven't seen this anywhere really except on Si Lloyd's twitter feed, and it was discussed on the Ornstein & Chapman podcast yesterday, will be checking it out today. sounds absolutely criminal. expect there will be some big legal action when some big media picks it up

[brucey]

Now gone into administration. Forest and QPR taking them off shirts effective immediately.

 

I never really understood how they were paying the dividends apart from new investors' money? The many millions spent on advertising seemed to speed up the growth of the bubble, but also made the whole thing collapse quicker. Lots of people bragging about their portfolio being 150% up etc - it was never sustainable, the money had to come from somewhere. A Ponzi scheme complete with an exit scam.

[Innovindil]

1 hour ago, brucey said:

Now gone into administration. Forest and QPR taking them off shirts effective immediately.

 

I never really understood how they were paying the dividends apart from new investors' money? The many millions spent on advertising seemed to speed up the growth of the bubble, but also made the whole thing collapse quicker. Lots of people bragging about their portfolio being 150% up etc - it was never sustainable, the money had to come from somewhere. A Ponzi scheme complete with an exit scam.

I dunno, I think it's a bit too simplistic a view of it. End result is the management have turned a simple idea into a complication one that regular joe couldn't understand. Utterly shot themselves in the foot by minting practically limitless shares, were still minting the highest ones up until death day, would have been far better to cap the top end to reduce dividend liabilities on them and as their prices rose they'd drag up the rest of the index's prices. There was a way of keeping revenue coming in, not every player goes up in price after all, if people weren't pouring cash into a selection of about 20 premium players then liabilities to overall minted shares falls.

 

Instead they went full tard and put dividend payouts through the roof, it was ridiculous at the end. Picking up Bale for 40p, within 2 weeks you'd made more than that in divs. Impossible to sustain after you've trashed prices with order books instead of keeping it simple and providing instant-sells so people have the ability to lose, but at a choice to them.

 

A shame really because it was a decent concept and something a bit more in-depth than just slapping a weekend acca on. Fun to have some interest in teams/players you wouldn't usually give a monkey about too.

[AS78UK]

Never got involved, as somethings didnt quite click for me probably because I didn't fully understand it.  I thought it was like bitcoin exchange where the value of the players were based on perceived value and you were buying and selling from each other.  The thing that never made sense was where was the dividend money coming from.

[Leicester_Loyal]

Can't believe this all happened, was tempted to get involved 18 months or so ago, glad I never did now.

 

Saw a lad on Twitter who had gone from over 200k down to about 12k, I think I'd be doing something very stupid if that was me.

[Guest]

On 12/03/2021 at 00:37, Dan LCFC said:

I was up a decent amount a year ago but like someone else I hadn't put any money in for a few months now and eventually just sold whatever I could.

 

They kept changing things and it just bored me in the end. Not surprised it's gone to shit. Could see there being a similar type of thing in future.

Will only work I think if its ran more like a bookmaker. You wouldn't likely get people winning fortunes (off the back of the future misery of others) but at least you'd know the money is there to pay people. It was obviously a product people were attracted to so there is some scope for something of a similar ilk. Relying on a constant stream of investors like that is a recipe for disaster.

[peach0000]

12 hours ago, Leicester_Loyal said:

Can't believe this all happened, was tempted to get involved 18 months or so ago, glad I never did now.

 

Saw a lad on Twitter who had gone from over 200k down to about 12k, I think I'd be doing something very stupid if that was me.

You dodged a bullet. The other thing is it says 12k but in reality it's worth a lot less. The way football index were valuing shares at the end was completely false. For example I had 270 still invested and football index were saying it was now worth 31 pounds. I worked out the true value and all but two of my players were in fact worth nothing (unsellable) and the two that were sellable should have been worth 20 pounds but in reality they could be realistically sold for around 3.60. 

 

Now football index is in administration all shares are worth nothing anyway. I managed to get out even over all so I feel lucky. I don't know how people are coping who lost 200k.

[The Horse's Mouth]

On 13/08/2018 at 20:05, JimmyB said:

Have to disagree, it’s actually quite interesting and there’s plenty of money to be made. 

How did that go 

[JimmyB]

4 hours ago, The Horse's Mouth said:

How did that go 

Proper numpty comment. 
 

Thousands of football fans have lost millions of pounds between them and you’ve popped in to gloat because you didn’t like the concept 2 and a half years ago. 
 

I’ll answer your question anyway, it went horribly for me, as I’ve already mentioned.
There is however, loads of people who took profits and changed their lives, house deposits, new cars etc. Fair play to them. If I had any great need for the funds I’d invested then I could’ve taken profits at some point too. 
 

Other than the last few months where it’s clearly turned sour, I really enjoyed the Index, clearly so have many others and pretty much all are hoping that it returns in a more sustainable manner. 
 

 

[MiDuck55]

23 hours ago, JimmyB said:

Proper numpty comment. 
 

Thousands of football fans have lost millions of pounds between them and you’ve popped in to gloat because you didn’t like the concept 2 and a half years ago. 
 

I’ll answer your question anyway, it went horribly for me, as I’ve already mentioned.
There is however, loads of people who took profits and changed their lives, house deposits, new cars etc. Fair play to them. If I had any great need for the funds I’d invested then I could’ve taken profits at some point too. 
 

Other than the last few months where it’s clearly turned sour, I really enjoyed the Index, clearly so have many others and pretty much all are hoping that it returns in a more sustainable manner. 
 

 

From a BBC article:

'Some critics argue Football Index was akin to a Ponzi scheme. "To pay out dividends, it required more customers to deposit money. When that dried up, the problems started", said Matt Zarb-Cousin, of the Campaign for Fairer Gambling and a former gambling addict.

"Football Index is an unsustainable business model. They created a stock market out of assets they themselves created. The football players on the market had no underlying value," he said.'

 

A Ponzi scheme is a fraudulent investing scam which generates returns for earlier investors with money taken from later investors. This is similar to a pyramid scheme in that both are based on using new investors' funds to pay the earlier backers.

 

JimmyB you have my genuine sympathy, you and many thousands of others have been caught out.

But, the fellow investors that made money, only made it from your and other investors losses.  

I'm not here having a go, but would you really go back for round two if the concept was relaunched?

[MiDuck55]

Just to clarify what I said above.  Obviously in all betting scenarios the winners win funds generated by the losers.

But FI was cleaverly marketed as akin to a  stock market investment.  Most investors (betters) were watching their investment(bets) increasing in value and taking dividends ( sweetners)on top. 

It seems alot thought as long as they managed their 'portfolio'  correctly they couldn't lose.  

 

[MiDuck55]

Cleverly!

[JimmyB]

15 hours ago, MiDuck55 said:

From a BBC article:

'Some critics argue Football Index was akin to a Ponzi scheme. "To pay out dividends, it required more customers to deposit money. When that dried up, the problems started", said Matt Zarb-Cousin, of the Campaign for Fairer Gambling and a former gambling addict.

"Football Index is an unsustainable business model. They created a stock market out of assets they themselves created. The football players on the market had no underlying value," he said.'

 

A Ponzi scheme is a fraudulent investing scam which generates returns for earlier investors with money taken from later investors. This is similar to a pyramid scheme in that both are based on using new investors' funds to pay the earlier backers.

 

JimmyB you have my genuine sympathy, you and many thousands of others have been caught out.

But, the fellow investors that made money, only made it from your and other investors losses.  

I'm not here having a go, but would you really go back for round two if the concept was relaunched?

Very fair question mate. You have to remember that the Index was licensed and regulated by the gambling commission from the get go. Surely at some point their business model must’ve been scrutinised and deemed sustainable? 
 

If it was sustainable at the start, it certainly wasn’t once they implemented order books and were unable mint shares as consistently, coupled with promising big improvements like NASDAQ integration and not delivering, it seems we were only heading in one direction. 
 

I’m sure any platform of this type would now be under the microscope much more than FI was and rightly so. It really did change the way many people watched football. 
 

I reckon I used to bet maybe £20 a week through SkyBet / Betfair but this completely stopped once I signed up to the Index, looks like I’ll be back on the 10-fold accumulators this weekend!
 

[MiDuck55]

1 hour ago, JimmyB said:

Very fair question mate. You have to remember that the Index was licensed and regulated by the gambling commission from the get go. Surely at some point their business model must’ve been scrutinised and deemed sustainable? 
 

If it was sustainable at the start, it certainly wasn’t once they implemented order books and were unable mint shares as consistently, coupled with promising big improvements like NASDAQ integration and not delivering, it seems we were only heading in one direction. 
 

I’m sure any platform of this type would now be under the microscope much more than FI was and rightly so. It really did change the way many people watched football. 
 

I reckon I used to bet maybe £20 a week through SkyBet / Betfair but this completely stopped once I signed up to the Index, looks like I’ll be back on the 10-fold accumulators this weekend!
 

Spot on Jimmy.  

Chin up and good luck.

 

[Zear0]

These are the puddings we're dealing with.  Joey D'Urso wrote some good pieces on this in The Athletic for those with access, definitely worth a gander.

 

[Innovindil]

https://www.theguardian.com/football/2021/mar/18/football-index-gambling-commission-warned-january-2020

 

Well, dropped the ball on that one eh. 

[Costock_Fox]

On 19/03/2021 at 00:25, Innovindil said:

https://www.theguardian.com/football/2021/mar/18/football-index-gambling-commission-warned-january-2020

 

Well, dropped the ball on that one eh. 

It’s a difficult one when you get to the stage they were at, the mistakes were made well before this point because in Jan 20 people had thousands of pounds in it. If they alerted public at that point it would have crashed, I guess once a mistake has been made then carrying on when you know it’s a disaster is compounding that mistake but still.

 

Edit- I’ve just read the article and didn’t realise there was an instant sell option at that point so some people could have got out.

Edited 21 March 2021 by Costock_Fox