Sporting Index, the UK’s largest spread-betting firm, stands to lose tens of thousands of pounds to an avid high-stakes gambler after miscalculating a novelty World Cup offer.
The company has been accused of being unfair to customers after it limited the size of bets once it realised its error.
The former City trader Simon Cawkwell bet on a market labelled “Shocking Decision, Ref!”, which allowed punters to estimate the number of times the ball would cross the line in the tournament without a goal ultimately being given.
Sporting Index’s initial estimate of up to 22.5 is thought to have been based on the tournament’s use of a Video Assistant Referee (VAR) review system, which its analysts believed would lead to a flurry of goals being chalked off.
This happened just once in the first 20 games of the World Cup but the firm was still estimating 22.5 times for the entire tournament.
Cawkwell said he was advised to bet on a far lower figure by Andrew Woolfson, the cofounder of the gambling software business Be The House.
The decision means Cawkwell, who famously made £1m betting against Northern Rock before its collapse, stands to win £2,000 for every number below 22.5.
With just four games left to go, the ball has crossed the line without a goal being given seven times in 60 games, putting Cawkwell on course to win more than £30,000.
He said the company imposed a limit on his bets after he attempted to increase his stake, realising he was highly likely to win money.
“It is undoubtedly a miscalculation,” said Cawkwell. “Sporting Index take huge bets so I’m delighted to win some money back off them. I don’t kid myself, they’ve done very well by my betting.”
Cawkwell has also won big from Sporting Index before, he said, taking £250,000 on a bet that southern hemisphere teams would outscore their rivals from the north in the 2007 Rugby World Cup.
Sporting Index said: “The Shocking Decision, Ref! market is very popular with our customers and is one that we have offered on World Cup finals and European championships since 2002.
“Like all markets it is based on historical data. We cannot comment on individual client’s bets, but we can confirm that the market has seen two-way business both before and during the tournament.
“We can also confirm that we treat each bet on a case-by-case basis and manage our risk and liabilities accordingly.”
Woolfson, who spotted the miscalculation, said that by limiting Cawkwell’s bets below its estimate but allowing customers to bet whatever they liked above it, the company was being unfair.
“They’ve put up a stupid novelty market and not really done the maths properly,” he said.
“What happens when they get caught out is that they then start to make it impossible for you to close your position or to make any more money out of them.”
“That’s where it’s a bit unfair. When you’ve made a mistake, we should have the right to win. Cawkwell and I are both losers with Sporting Index over the years.
“So we’ve spotted an anomaly, give us a chance to make some of our money back.”
