- Corporate regulator ASIC said on Thursday it had “intervened” when betting company Sportsbet opened up bets on movements on the S&P/ASX 200 Index.
- In essence, this would be betting on market performance, and therefore an unregulated financial product.
- Sportsbet blamed the slip-up on a failure of the company’s compliance framework due to many of its staff working from home.
- Visit Business Insider Australia’s homepage for more stories.
Given there are almost no major sports leagues running anywhere in the world, you can understand the dire situation facing betting agencies, who have been forced to get creative to keep punters onboard. That being said, accidentally creating unregulated financial products is perhaps not the best course for the industry.
The corporate regulator ASIC has issued a release today announcing it intervened when Sportsbet began offering bets on the S&P/ASX 200 Index – essentially, letting punters bet on market performance.
‘Betting on market performance’ is better known in its ostensibly more legitimate form, derivatives trading, which is subject to significant regulatory oversight.
When it initially announced the new product earlier in April, Sportsbet said it was a way for punters to make money off the ASX “without having to plunge [their] hard-earned into the stock market”.
According to ASIC, Sportsbet subsequently withdrew the offer – after getting the tap on the shoulder – and blamed the error on difficulties implementing the company’s compliance framework due to a significant number of staff working from home.
The regulator acknowledged the challenging conditions facing companies trying to maintain their control environments amid changing work conditions, but said consistency was paramount.
“Firms need to ensure continued compliance with their regulatory obligations in the COVID-19 context, assessing the effectiveness of their business continuity plans and alternative working arrangements so as to comply with all regulatory requirements,” ASIC said.
“It is important to maintain robust monitoring and supervision controls to ensure financial services are provided efficiently, honestly and fairly.”
In a statement to Business Insider Australia, a spokesperson for Sportsbet said the company “respected” ASIC’s intervention.
“We acknowledge the concerns raised by the ASIC regarding certain ASX 200 betting markets being offered over a five day period,” the spokesperson said. “While these markets had received separately regulatory approval for betting purposes, we respect the position of the ASIC and immediately withdrew the markets, and will not be offering them in the future.”
In March, Sportsbet told Business Insider Australia it had seen a drop in user numbers due to ongoing restrictions placed on live sport amid the coronavirus pandemic.
“Given the unprecedented level of uncertainty within the community as a result of COVID-19, followed by the cancellation of sporting codes both locally and abroad, we have observed a drop in the number of active customers,” Stuart Allott, Sportsbet head of corporate affairs, said.
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