Almost 6 months ago, the Australian Securities and Investments Commission (ASIC) was rattling its sabre, threatening to “shut down” online betting agency Centrebet if they continued to allow punters to bet on stock market and interest rate moves.
it has come to the attention of the Australian Securities and Investments Commission that you may be carrying on a financial services business without holding a financial services licence.
In particular we believe the financial bets you offer over the ASX 200 share index and RBA interest rate changes may be ‘derivatives’, as defined in the Corporations Act.
It seems that anyone in Australia in the business of offering financial derivatives is required to hold an Australian Financial Services Licence (AFSL) and adhere to a raft of regulatory responsibilities. Centerbet, apparently, did not have such a licence.
It was a little bit surprising, therefore, to see an article about the soaring Australian dollar in today’s Herald feature the following commentary from another online betting agency, Sportsbet:
Sportsbet.com.au, which has taken bets on US dollar parity of up to $2000, says there has also been a plunge on the Reserve Bank raising interest rates next week.
So what has changed? A quick call to ASIC confirmed that a business offering bets on financial instruments would be required to hold an AFSL and that their records indicated that Sportsbet did not in fact hold such a licence. I asked them how this requirement was enforced and they told me that if they received a complaint, they would investigate it. They could neither confirm nor deny whether they had received any complaints about Sportsbet.
I will be listening out very carefully for the sound of ASIC’s sabre!
UPDATE: further digging revealed that even while ASIC was clamping down on Centrebet back in April, Sportsbet were taking financial bets. The difference in treatment is quite mysterious.
FURTHER UPDATE: Sportsbet have now taken down their pages for betting on interest rates and the Australian dollar. It may be temporary, or it may be that ASIC are investigating them…It’s now back up, so it appears to have only been a temporary suspension.