BetIndex Evidence
Request
There is an internal email at the Gambling Commission which has been published. It's dated 6th July 2021 and relates to point 44 of a separate document advising the gambling commission had received evidence from bet index and queries regarding their liquidity had been satisfied. Please provide any correspondence received and evidence used to satisfy this.
Response
Thank you for your request which has been processed under the Freedom of Information Act 2000 (FOIA).
In your email you have referenced an internal email at the Gambling Commission, which has been published. It is dated 6 July 2021 and relates to point 44 of a separate document advising that the Gambling Commission had received evidence from Betindex and that queries regarding their liquidity had been satisfied.
You have requested any correspondence received and evidence used to satisfy this.
The Commission’s understanding of Betindex’s product was underpinned by various material. As such, I can confirm that information falling within the scope of your request is held, and has been disclosed under previous FOI requests. Section 21 of the FOIA provides that information is exempt where it is reasonably accessible elsewhere. This information is publicly available within the Gambling Commission’s disclosure log:
- Detailed financial assessment provided by the Forensic Accountant
- Financial Assessment of Football Index
- BetIndex Limited/Football Index meeting – report request
- Financial accounts for BetIndex Limited
- BetIndex Financial Review
For context, the Commission initially had concerns with this operator as it was alleged the current value of all shares on BetIndex’s platform totalled £115m, but in fact BetIndex only had cash to cover 15 percent of this amount. Officials therefore had concerns that if every customer wanted to realise their portfolio value by cashing out their shares, BetIndex would be unable to cover the full amount and customers would lose out.
At the time, BetIndex explained that the current value of all shares wasn’t representative of their actual commercial risk as the values couldn’t be realised simultaneously by all customers, because:
- limits are imposed on ‘share’ sell numbers per transaction,
- the pricing algorithm would reflect decreased demand in price decreases for a player(s),
- they can amend the pricing algorithm, and
- they reserve the right to suspend Instant Sell, temporarily or otherwise for a specific footballer or all footballers (and that this was no different to the cash out options offered by other betting operators).
BetIndex were also active on their own platform through a ‘Market Maker’. As of January 2020, the ‘Market Maker’ accounted for Betindex equated to roughly 2.5 percent of the activity on the website.
BetIndex explained that the role of the ‘Market Maker’ was to provide ‘liquidity’/ ‘unblock the system’ by bulk buying bets within the ‘Sell queue’ and then drip feed them back into the system via the ‘Sell queue’. The ‘Market Maker’ used data that wasn’t in the customer domain (i.e. queue depths) and had the ability to change the BetIndex pricing algorithm.
Betindex further explained that ultimately a player’s value will arrive at nil and thus they generate Gross Gambling Yield (GGY) akin to the initial purchase price of all bets struck. They considered that they were moving towards a more mature/settled market but suggested the ‘market’ for players would never crash as it would ‘autocorrect’ slowly over time based on supply/demand.
As explained above, information falling within the scope of your request has previously been published on our website and has been provided at the links above.
Review of the decision
If you are unhappy with the service you have received in relation to your Freedom of Information request you are entitled to an internal review of our decision. You should write to FOI Team, Gambling Commission, 4th floor, Victoria Square House, Victoria Square, Birmingham, B2 4BP or by reply to this email.
Please note, internal review requests should be made within 40 working days of the initial response. Requests made outside this timeframe will not be processed.
If you are not content with the outcome of our review, you may then apply directly to the Information Commissioner (ICO) for a decision. Generally, the ICO cannot make a decision unless you have already exhausted the review procedure provided by the Gambling Commission.
It should be noted that if you wish to raise a complaint with the ICO about the Commission’s handling of your request for information, then you are required to do so within six weeks of receiving your final response or last substantive contact with us.
The ICO can be contacted at: The Information Commissioner’s Office (opens in a new tab), Wycliffe House, Water Lane, Wilmslow, Cheshire SK9 5AF.
Information Management Team
Gambling Commission