Sportsbet gets slammed for Commissions

Sportsbet chief executive Cormac Barry told a Parliamentary inquiry into interactive and online gambling yesterday that the agency paid between $3 million and $4 million a year in commissions to businesses and individuals who referred new clients. Mr Barry conceded Sportsbet did not tell new gambling clients that commissions were being paid on their gambling activities.

Independent Senator Nick Xenophon asked if Mr Barry was aware that not disclosing commissions may be in breach of secret commissions legislation, which varies from state to state.

”I’m not familiar with that particular piece of legislation,” he replied.

Frank Zumbo, associate professor of Business Law at UNSW, said not disclosing commissions was a potential breach of laws against deceptive conduct.

”I will be calling on the ACCC to investigate these claims thoroughly because we want punters to be given the full picture,” Mr Zumbo said.

Third party agents network within racing clubs and professional gambling circles and then refer people to agencies, Mr Barry said. ”Third parties can be on a finder’s fee or they can gain a share of revenue from the customer, so an affiliate share,” he said.

Mr Barry said it was a standard business practice for referrals to occur.

Senator Xenophon said the practice was ”unconscionable” and he will amend his bill on online gambling, being considered by the inquiry, to ban commissions.

It is clear from the article above that the leglislation in Australia from State to State is tricky to understand if someone like Cormac Barry and Sportsbet and not aware of them.