Sportsbet, an Australian online bookmaker, saw betting tank just like most other businesses as the COVID-19 pandemic spread.
At the end of March Stuart Allott, Sportsbet head of corporate affairs, told BI Australia:
“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.”
On 1 April, Sportsbet apparently adapted to the challenging economic environment and began to take wagers on the performance of the Australian Securities Exchange (ASX). Great idea but unfortunately the activity fell afoul of the Australian Securities and Investment Commission (ASIC).
In a release today, ASIC said it had intervened when Sportsbet began offering bets on the performance of the S&P/ASX 200 Index. The action was taken following concerns that the bets constituted a financial product that Sportsbet was not licensed to offer.
Sportsbet subsequently withdrew the product.
ASIC said that Sportsbet had identified to the regulator that there were “challenges in implementing its control framework in the current environment, with many staff working remotely.”
It appears that a creative employee decided to innovate by allowing individuals to bet on securities. That leads one to wonder if perhaps Sportsbet should pursue the appropriate license and broaden its services.
“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. It is important to maintain robust monitoring and supervision controls to ensure financial services are provided efficiently, honestly and fairly.”
The regulator added it would not hesitate to take action as needed even with most operations shifting to a virtual office environment.