More than 18,000 gamblers burned by the collapse of ACT-registered bookmaker Sports Alive will get nothing after a decision in the case by the Victorian Supreme Court.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Furious customers say the judgment is a scathing indictment of the ACT Gambling and Racing Commission, with the evidence showing the commission did nothing for years to check on the bookmaker's claims to be operating legally.
The betting agency, registered in the ACT but operated from Melbourne, collapsed in August 2011 with debts of more than $14 million including about $327,000 to the ACT Revenue Office. The Gambling and Racing Commission went to court in Victoria in an effort to retrieve some of the $3.9 million owed to Sports Alive betting account-holders but lost its case this week.
Supreme Court Justice Ross Robson found the failure by Sports Alive to keep proper segregated accounts for its customers' funds and winnings left the clients without legal protection.
"As at liquidation, Sports Alive should have held some $3.9 million in segregated trust accounts," Justice Robson wrote in his 36-page judgment. "Sports Alive did not."
The judgment means that secured creditors, owed about $3.9 million, will be best placed to get their money back.
Dennis Tuan-Mu, an out-of-pocket customer who has led the campaign by Sports Alive clients to get some of their money back, addressed the court on behalf of his fellow punters during two days of hearings in Melbourne in October last year.
He told The Canberra Times on Friday that the court decision highlighted the long-term non-compliance of the company with territory gambling laws.
He said: "The judge concluded
that Sports Alive was in long-term non-compliance with legislation and did not properly segregate account-holder money.
''Such accounts never, ever existed in the history of Sports Alive.''
Mr Tuan-Mu said the judgment was an indictment on the commission's oversight of the failed company.
''The only evidence the ACT Gambling and Racing Commission used to show they even checked any material provided by Sports Alive was just before they went into liquidation, more than eight years' inaction,'' Mr Tuan-Mu said.
''The account-holders' position is that even rudimentary checks by the ACT Gambling and Racing Commission would have uncovered these issues, such as no segregated accounts, and would have prevented the loss of $3.9 million dollars from over 18,000 account-holders.
''There were plenty of warning signs, too, including audit reports that were obviously never checked by the ACT Gambling and Racing Commission.
''No one could even establish where all the money disappeared to.''
A commission spokesman declined on Friday to respond to the comments of Mr Tuan-Mu. He said the regulator was considering its options in light of the Supreme Court's decision.
