In March 2021, the gambling website Football Index – the self-styled “stock market” of football – encountered the last of several crashes in the “share” prices on its exchange and then collapsed into administration, with at least £100m of customers’ money in “open bets” trapped inside. Many of its users suffered life-changing losses, of five- and even six-figure sums, and relationships and families also fell apart under the strain. It was, and remains, the most spectacular and expensive collapse in Britain’s gambling industry.

In the days and weeks that followed, details emerged of chaos, failure and incompetence at Football Index dating back to its inception and launch in 2015. It became apparent that the site had been “minting” and selling new “shares” just days before its collapse.

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It soon became clear that the Gambling Commission, which had regulated and licensed Football Index as a betting product, also had serious questions to answer, since it had been warned 14 months before Football Index went bust that the site was “an exceptionally dangerous pyramid scheme”, and that “10,000s of users” had been “misled into believing they are investing rather than gambling, with little or no consideration that all of their money is at risk”.

However the story soon started to fade from the spotlight, and while a review of the case by Malcolm Sheehan KC, a specialist in product liability and group actions, criticised both the Gambling Commission and the Financial Conduct Authority – which regulates financial products – it did nothing to address the most obvious question for FI’s former customers: when, or if, they would ever get their money back.

Three years later, a small group of individuals who refused to let go have been working doggedly to gain some measure of justice – and closure – for the hardships and trauma suffered amid FI’s collapse.

At last, there are signs that some progress is being made. MPs on the all-party parliamentary group on gambling related harm will hear testimony on the scandal next month, while a complaint to the Financial Regulators Complaints Commissioner over the FCA’s conduct is also inching its way through the system.

“It’s been a bit of a slow burner, but then, it’s also quite technical,” David Hammel, the main spokesperson for the Football Index Action Group, says. “When I first sat down with my MP to talk about it, he said: ‘It’s a bit dry, isn’t it?’, and I joked and said: ‘I’m sorry that a measly £104k [his net deposit in Football Index] in a regulated Ponzi scheme isn’t exciting enough for you’. He laughed and we got on quite well after that.

“A lot of people in the [FI] community don’t understand why it’s not front-page news and the biggest scandal going, but then, when you’re in a scandal-ridden era, it’s difficult to compete for column inches.”

The campaigners’ case, in essence, is that they were the victims of a spectacular failure of regulation, which allowed Football Index to masquerade as a football betting site, regulated by the Gambling Commission, when it was, for all practical purposes, a platform for trading high-risk derivatives, which – like high-risk spread-betting – should have been regulated by the FCA.

They argue that everything about Football Index, from its 30-second ad slots on ITV, Channel 4 and Sky Sports to the share-price “tickers” on the perimeter of Premier League pitches sought to brand it as an “investment” product. The only hint on its website that it was actually a betting site was an easy-to-miss strapline, which was added several years into its existence at the insistence of the Advertising Standards Authority.

Behind all the slick advertising and celebrity endorsements, however, a business model with fundamental flaws and many of the hallmarks of a pyramid scheme was rapidly spiralling out of control. And while FCA regulation allows for redress for losses through the Financial Services Compensation Scheme, the Gambling Commission’s much less stringent regime left all but a fraction of the money in Football Index completely unprotected.

For some, it may jar to describe those who lost money in Football Index as “victims”. Unlike, for instance, the post office workers affected by the Horizon scandal, they voluntarily signed up for accounts and also clicked a tick-box as they did so to confirm that they had read the site’s terms and conditions – even though very few of them had. But consumers have rights too, including a right to redress if a product is mis-sold, while any customer in a regulated industry like gambling also has the right to expect that the regulation will be adequate, appropriate and diligent.

The Sheehan report found that the Gambling Commission held meetings in February and March 2020 – a year before Football Index’s demise – to consider the warning that the site was a pyramid scheme that was tottering towards an inevitable collapse. It decided that it was not, because “it did not consider that there was evidence to show that the undertaking was fraudulent, as it was clear that existing customers were not making profit purely from new customers joining the scheme”.

A year later, however, the January 2020 warning proved prescient. The commission had not simply failed to see the looming iceberg, or spotted it too late to avoid the catastrophe. It had inspected and licensed the iceberg in 2015, and then sent it on its way. “My beef isn’t with the government or DCMS [Department for Culture, Media and Sport],” Hammel says. “They’ve been let down by the regulators.

“The regulators don’t actually cost the taxpayer any money, they are funded by licence fees and they also contribute to the Treasury by way of fines and settlements. There is a net surplus since the date when Football Index was first licensed in 2015, it’s approaching £1.3bn or £1.4bn that’s gone into the public purse. We are asking for about 10% of that back as redress and I don’t think that’s bad value for the taxpayer.”

It is an ambitious target, to say the least. Three years on from its collapse, however, the sense of an injustice that needs to be addressed still burns fiercely among Football Index’s victims and we are unlikely to hear the last of it unless, or until, justice has been done.