The ACT Gambling and Racing Commission is facing more trouble after revelations collapsed betting agency Sports Alive traded for three years while insolvent.
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Liquidator Hamish MacKinnon, from Bent and Cougle, told a creditor's meeting in Melbourne he was ''bemused'' the ACT Government regulators were unaware of the company's financial situation.
He said the ACT-registered Sports Alive had been insolvent since at least 2008, with records showing the company clocked losses of more than $7 million in its last five years of operation.
Auditor reports in 2009 and 2010 revealed continuing concerns about the solvency and financial position of Sports Alive.
Mr MacKinnon is still trying to determine whether the ACT regulator received these dire warnings, but says they should have.
Creditors at the meeting were also surprised to discover the embattled company still has a licence with the ACT Government, despite being placed into liquidation on August 25.
One creditor told punters their only prospect of recovery was through a claim against the regulator.
Punters are owed about $3.7million and creditors stand to lose a further $8.8 million.
Gambling and Racing Commission chief executive Greg Jones said the matter was complex and punters could seek legal advice if they wished.
Mr Jones said audit reports did not reveal the whole picture, and profitability concerns did not necessarily mean a company was spiralling towards liquidation.
He said audit reports submitted to the regulator showed Sports Alive was in a healthy economic state.
A group of more than 100 punters has begun making inquiries about filing a class-action lawsuit against the ACT Gambling and Racing Commission.
They are also calling on ACT Ombudsman Allan Asher to conduct a thorough investigation into the regulator.
''Clear warning signs were present,'' a spokesman said.