Sportsbet condemned by regulator for offering ASX betting market
Australian operator blamed its stretched remote working framework for the launch of the market
Australian operator Sportsbet has been condemned by a corporate watchdog for offering a market which allowed bettors to gamble on the Australian Stock Exchange (ASX).
The Australian Securities and Investments Commission (ASIC) intervened with the market which allowed bettors to choose whether the ASX would close higher or lower than its opening price.
In a statement, ASIC said that the offering “constituted a financial product that Sportsbet was not licensed to offer”.
In response to the intervention, Sportsbet pointed towards a failure to control its remote working staff as to why the market was released.
In a statement, Sportsbet said that it had encountered difficulties in “implementing its control framework in the current environment”.
Sportsbet has received regulatory approval from the Northern Territory Racing Commission to run markets on stock market indices, but outside of this jurisdiction the firm has taken the decision to close the offending markets.
The statement continued: “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.”
The ASX welcomed the move by ASIC and warned against the unauthorised use of its trademarks in the future.
An ASX statement read: “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.”
The Sydney Morning Herald noted that by offering this market, Sportsbet had come close to a form of financial product known as a binary option, which ASIC are attempting to ban.
A binary option allows people to bet on assets, usually a currency or shares, over a short period of time. These then result in ‘all or nothing’ gambles which ASIC are looking to stop.
An ASIC report found that in 2018, 80% of clients lost money when trading on binary options.
Despite ASIC closing betting on the ASX, Sportsbet users can still gamble on other similarly binary options.
Markets on whether Prime Minister Scott Morrison will wear a blue time at his next press conference and whether ‘social distancing’ will be Merriam-Webster’s 2020 word of the year are still active.