I’ve had a few emails over the weekend asking if I have any latest thoughts on the FI situation, so I thought it might be worth sharing them for everyone.

The answer is yes, and no. We’ve had a few developments – but not neccesarily much we can do anything about.

I tend to write a lot but I only write until I’ve run out of things I think are worth sharing. So this won’t be a long post! 🙂 (Edit: Ok it didn’t turn out to be short, either – I write fast!). 

Footstock - is it a game changer?

I guess the biggest development in the last week has been the very sad collapse of Footstock. Despite the rivalry between the platforms anyone using either now knows how tough this is to take. Tragic for users, and for what little it is worth they have my sympathies.

Is this a nail in the coffin for any product of this nature? And for any hope of FI getting a licence back in the event someone out there wanted to salvage the company? Some seem to think so and you can see why.

In my opinion though I don’t think it changes much. Either there will be a viable company emerging from administration or there will not. The Gambling Commission were always going to be extremely wary of granting a licence again well before Footstock closed the doors.

As a former Government official myself, I can understand a bit about the pressures the GC are under. 

On the one hand, they’ll need an overwhelmingly convincing case from any reformed company as to why they are now sustainable. Big money backers, cash reserves, a sustainable model signed off by the administration and betting big beasts.

If they were to grant a licence, only for it to collapse again a year from now, that would be a disaster. So they’ll need some convincing.

Yet, if a viable backer did emerge for FI with a good business case behind it, absolutely nobody would thank them for being the only reason FI could not recover and provide compensation to customers. 

After all, it is surely only a company that intends to survive and needs to buy users back with good will gestures that will see a need to return anything like the sums people thought they had in FI.

Anything dragged out of a dying company by force or liquidation is surely going to be the bear minimum. And as I’ve always thought, hopes of getting the GC to cough up on the grounds of negligence are tiny. 

The Government would have to consider it such a scandal that they paid compensation – and is the Government going to set the precedent that people can speculate on an alternative gambling product and get paid out by the Government if it goes wrong? Very, very little chance of that in my view.

So there are twin pressures here – if a company that was viable emerged then it would be no small thing for the GC to turn it away – the betting industry would then say “we could have put this right for customers but the GC blocked us”. Another very uncomfortable position for the GC to be in.

This to my mind leaves us in pretty much the same situation we were before – if there is a good company there with a good business model and the money and the will to make it work – I would expect them to be given the chance to do so.

Not that I am optimistic for that!  I hope it happens. But my gut feel remains 50/50 at best on rescue.

I am slightly more optimistic of a Pokerstars/PKR style outcome. 3 years ago Pokerstars made things right when rival PKR collapsed – restoring balances to customers and then closing PKR. They did this for no other reason than good publicity and preventing damage to the reputation of online poker as a whole.

As I’ve previously discussed – there are plenty of compelling reasons why the betting industry does not need a scandal like this right now. 

The timing could barely be worse with a review of Gambling Regulations going on. And FI is a relatively small mess to clean up for some of the betting giants.

Press Coverage - Is it helpful?

Yes and no. 

Exposing the incompetence of the previous management as they went bouncing from one error to the next is helpful. As is attacking the toxic culture that developed with management making misleading claims about the health of the business.

I am uncomfortable with this image emerging of the “idiot” FI user who was duped in some way. This is not my experience – the majority of people I speak to in the world of FI are often very intelligent, professional sorts.

Most of us were obviously aware it was a betting product. If we thought it was a stockmarket then presumably we were aware they can crash too. Even on the most basic understanding, most people get the idea that the 50% to 300%-400%+ gains that were possible did not come without risk.

Let’s say it how it is – we have been discussing the viability of the FI business model for years. And navigating changes to the rules had pretty much become part of the game.

The issue is not the lack of awareness of risk for the majority of users I suspect. It is rather the brash, over confident marketing style and constant big promises that strung people along so that they would “just wait a few more months for that bounce back before I take some profit”.

This is much more subtle and less exciting than “Porn King in Ponzi Scandal”. But it rings more true.

It might be in the interest of some to reach for the Ponzi story but I do not think it is in the interest of those with money remaining in FI. 

When we trash the entire concept we make it more difficult for the company to be rescued – damaging the best chance traders have of seeing significant money back.

And I think the damning coverage of the concept itself has been premature and often deliberately exaggerated.

I’ve been particularly disappointed with the majority of coverage from journalists who are, I am sorry to say, behaving like ambulance chasing lawyers on this story.

Whilst there is much self congratulatory backslapping on their part for “exposing the injustice” they are often just trying to get their big headlines and make a name for themselves. Most are disregarding detail, balance and nuance in pursuit of sensationalism and their share of the limelight.

For example – the much circulated “January” document sent to the GC warning them is sourced as “a credible betting industry insider” or similar. This has been touted as the “smoking gun” that saw it all coming.

I am aware that this report is from a small direct rival to FI . Who also failed to run a sustainable business, by the way.

It’s a well written attack on FI for sure. But it is not a balanced critique as it is being presented in the Press. And it plays fast and loose with the details whilst sounding credible to most readers. 

It’s a little bit like getting a review of Conservative policy from a rival party like Labour. The rival might have some fair points – but you know they are taking the worst possible interpretation and sometimes stretching the truth as far as they think they can get away with.

The saddest thing is that the journalists are well aware of the source of this. But they hide it because it doesn’t have quite the same impact if you know it is from a rival as opposed to independant expert analysis.

But then – this kind of behaviour from journalists should surprise nobody these days.

Does it matter what the source was if it was “right”? Well yes, actually. The patient got sick we know that. But it doesn’t mean this particular diagnosis was correct. And it’s really important to get clarity on that.

We must remember that despite the wide circulation of documents such as the above – whether FI was ever sustainable remains an open question. One which only the administrators can really clear up for us.

I’ll wait to see what they say on that. But it seems much more likely to me that this ship could have floated but was run aground by reckless incompetence (topical reference there). 

After all, there have been senior industry backers on the Board of FI for the majority of it’s life who were content with the business model. Were these guys with such long careers in the industry really so incompetent that they just never noticed it was doomed to fail? 

It’s possible. But that has not been proven. 

And if this was all some elaborate long-con, would Cole and Bohan not simply have jumped ship when COVID was approaching just over a year ago and jetted off to Panama? It would have been an easy out. But they did not take it.

Hopefully the adminstration process can help clear up these issues. Because so far press coverage has given us a lot of heat but not a lot of light. 

It would be a tragedy if the administration process were to find a sustainable business model but could find nobody willing to compensate customers and take it forward because of all the premature talk of Ponzi schemes.

Final Thought

We know there is a lot of support out there for the product. I know many are almost afraid to say it for fear of being painted as “sympathisers” or “FI apologists”.

It’s perfectly possible to be furious and appalled with the behaviour of previous management whilst reserving judgement on the concept itself.

I for one would like to see it continue if it can be brought back in a sustainable form. It would need a metric ton of confidence measures sure, with some real game changers.  

But that’s probably the only way people see the sort of money they thought they had back in my opinion. 

Not to mention the fact that it is really clear that people miss the product. It wasn’t all about the money – it was a reason for connection with the game. People have lost their main hobby, too.

So I won’t write it off yet. Anyone speculating on the business model now is only guessing. 

Only a team of experts with access to the full picture are going to be able to determine whether FI could be a sustainable business. And even if it is, it depends heavily on whether someone is willing to take it on after so much reputational damage.

Fortunately, with the administration process underway, there will be more sunlight shed on the goings on at FI than ever and we may get some conclusive answers there.

In under 8 weeks, the administrators will have to make a statement of intent, though that could come any time they are ready. I’ve let them know that if I can be of any help to them in coming to a good outcome for all users I will. 

In the mean time, I’ll continue to comment occasionally if anything new happens. And I continue to explore Sorare in the background too so you can expect more posts on that theme this week. Here is my first post on Scouting on that platform. 

Best,

Adam.

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