Betting company Sportsbet has blamed remote-working staff for the release of a betting market which was shut down after intervention from the country’s powerful corporate watchdog.
The Australian Securities and Investments Commission (ASIC) revealed on Thursday it was forced to step in and shut down the market which allowed punters to bet on if the ASX would close higher or lower than its opening price.
SportsBet’s ASX betting market has been shut down after intervention from ASIC. In a release, ASIC said it intervened as it believed the market, unveiled by the betting company in early April, “constituted a financial product that Sportsbet was not licensed to offer”.
Subsequently, Sportsbet seemingly blamed the decision on poor oversight due to its employees working from home, telling ASIC it had encountered challenges in “implementing its control framework in the current environment”.
At the time, Sportsbet issued a media release advertising the opening of the market, saying betters could now make money off the ASX “without having to plunge your hard-earned into the stock market”.
In a statement on Thursday, a Sportsbet spokesperson said the company would shut the market down after the concerns raised by ASIC, but said it had previously received regulatory approval from the Northern Territory Racing Commission to run markets on stock market indices.
“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,” they said.
Allowing bets on the closing price of the ASX comes dangerously close to a form of financial product known as a binary option, which allows investors to make ‘all or nothing’ gambles on things like the price of a certain company’s shares over a set period of time.
The regulator is currently attempting to ban the sale of binary options to retail clients, claiming they cause “significant detriment” with 80 per cent of clients losing money.
ASIC has previously warned betting companies about allowing bets on company share prices after Sportsbet allowed customers in 2012 to gamble on major companies such as Qantas, Harvey Norman and Fortescue.
The ASX itself has said it does not endorse the product and warned the betting company against using its ‘ASX’ trademark. Today it congratulated ASIC on its intervention.
“The withdrawal of the product following ASIC’s intervention is a sensible outcome, given the unauthorised use of an ASX trademark and concerns about lack of licensing,” a spokesperson said.
ASIC said it would continue to monitor companies for any potential misconduct, and advised businesses to make sure their alternative working arrangements still complied with all relevant regulatory requirements.
Though Sportsbet has closed its betting on the ASX, enthusiastic punters can still be odds-on for Prime Minister Scott Morrison to wear a blue tie at his next press conference, or for ‘social distancing’ to be Merriam-Webster’s 2020 word of the year.
A business opportunity for anyone astute enough to set it up outside the reach of ASIC’s jurisdiction…