|Menzies Corporate, administrators of collapsed betting exchange Sporting Options, have published their report today, revealing the full extent of the firm’s failure. According to Menzies, the betting exchange ceased trading with debts of £5.4m, including £3.5m owed to its customers. The report also states that Kevin Griffiths, managing director, lost £1.1m of his own money by 'seeding' Sporting Options in an attempt to create liquidity.|
The reports said that the seeding process started in 2002 soon after the launch of the company. This meant that the company was operating more like a bookmaker, with money at risk, as opposed to a betting exchange: “After the launch,' states the report, 'it became immediately clear to management that in, order to develop, it would be necessary to seed the markets to create liquidity and attain a critical mass of clients to support the business model.'
When administrators were called in, the company had only £100,000 left of the ‘ring-fenced’ £3.6m clients' accounts and owed £250,000 to the inland revenue. Thanks to Betfair’s rescue package, however, all money owed will be repaid. Betfair has already paid out £1 million to Sporting Options' customers.