Sportsbet has blamed work from home (WFH) arrangements for a lapse of judgment that led it to offer bets on the S&P/ASX 200 Index.
The Australian Securities and Investments Commission (ASIC) intervened in the matter following concerns the bets constituted a financial product that Sportsbet was not licensed to offer, and the product was consequently withdrawn.
"Sportsbet identified to ASIC challenges in implementing its control framework in the current environment, with many staff working remotely," the regulator said in an announcement this morning.
"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 Irish-owned company finds itself in a difficult spot at the moment amidst cancellations of the world's and Australia's major sporting leagues and competitions. Last week competitor Tabcorp (ASX: TAH) announced it would be standing down 700 employees and 160 technology contractors.
Sportsbet's parent company Flutter generated approximately 78 per cent of its revenues through bets placed on global sporting events in 2019. If restrictions remain in place until August, the company expects EBITDA to drop by £90-110 million (AUD$179-218 million).
Flutter is therefore heavily dependent on its UK and Irish shops, as well as horse racing fixtures in the UK, Ireland and Australia.
While ASIC and the Australian Prudential Regulation Authority (APRA) have set aside non-essential matters in favour of handling coronavirus-related challenges, that does not equate to inactivity.
ASIC emphasises it is actively monitoring firms and markets for potential misconduct and will not hesitate to take action in appropriate circumstances.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia