Thread by @JD_FITweets

Many of the media seem to be dressing up the #FOOTBALLINDEX scandal as an obvious Ponzi Scheme which I think is a disservice to the punters who played. @KieranMaguire @josephmdurso @mattzarb @RicHolden

The argument is that the commission revenue did not outweigh the dividend payouts therefore they company had to rely on a constant stream new customers to pay out dividends to the old customers

This however isn't true. Dividends are paid out of the initial stakes made to "buy shares in a player"
The Football Index model, according to their own affiliate terms, is that they expect to pay out a 20% yield per annum

and that when a bet is staked 67% of that stake is reserved to pay for the dividends back to that punter over the course of 3 years. People seem to be getting confused about this and also question the sustainability of when someone like Messi or Bruno F achieve >100% yields

However the very small number of good bets are made sustainable by the large number very bad bets which punters have made on the platform. People like Rayan Cherki, where about £1.2m was staked and FI have never had to pay out a single penny on as he has never won a dividends

Off the top of my head there is probably a small pool of players which you could guarantee would be losers for FI as a business over the course of the next few years. Messi, Sancho, Bruno, maybe Kane, Kroos, Kimmich. This is evidence that the concept should not only be

Sustainable but also very profitable. Which it is why it should be of huge concern that 6/7 months after they raised the dividends we have ended up where we are. Where have the 67% of stakes gone? This is the real story for me. Not that it's a ponzi, but that money may been

Siphoned away. That FI as a company gambled on growth to continue and borrowed money for the dividend pot to fund other ventures. The tech which the FI platform is run off is owned by Index Labs, a separate entity.

As far as I can make out this agreement is the only stream of revenue for Index Labs, a company which has around 50 employees and a team full of well paid engineers - there is currently an open position with a 100k a year salary. Who is paying for all these salaries?

My guess would most likely be FI traders. And yes the major shareholders are the same clowns who run FI into the ground @AdamColeFI and @MikeB_FI. I won't be shocked to learn that the FI tech is rented from Index Labs for an astronomical fee or to find they are a secured

Creditor should FI become insolvent that will no doubt be paid out before any punters.