Football Index, the self-styled football ‘stock market’, went into administration last month, preventing users from being able to withdraw money from their accounts. Users are said to have lost a collective £90m.

The site allowed users to buy ‘shares’ in individual players. The supposed value of a player rose or fell based on a host of different metrics, including their performance on the pitch and the number of articles written about them.

Bet Index, the company that operated Football Index, is now in administration and has since had its license suspended by the Gambling Commission.

The all-party parliamentary group (APPG) for gambling-related harm has written a letter to Johnson calling for an urgent investigation into the gambling site’s collapse.

The letter said: “Documents presented to the Gambling Commission in January 2020, exposed by the Guardian, warned of Football Index’s ‘pyramid structure’, and the risks of a ‘bank run’. The document warned that should user growth stop or decline, the company would not be able to pay liabilities to its users. Despite this it took the regulator four months to commence an investigation into the viability and sustainability of the product it had licensed.

“Football Index were essentially operating a ‘fraction reserve banking’ system where only a portion of users’ money and overall ‘market cap’ was available to withdraw at any one time. Such a platform should arguably have been subject to liquidity controls and capital ratios, which regulation by the Gambling Commission did not require. As a result, Football Index was fatally and financially reliant on user growth to not only avoid insolvency but to avoid its own customers losing what has been estimated as being £90m of their own money.”

The group of MPs is also calling for the Gambling Commission and Department for Digital, Culture, Media and Sport’s (DCMS) roles in the saga to be investigated.

The APPG said it appeared as though the Gambling Commission “licensed what became a pyramid scheme, was subsequently warned that it had become a pyramid scheme, but by negligence or design allowed Football Index to overstate its financial position, reassuring its users to attract more investment and new money into the platform”.

The same group wrote to culture secretary Oliver Dowden last month to call for an inquiry into what happened.