Earlier this month, the Victorian Supreme Court issued a ruling that essentially declared that the over 18k former customers of collapsed online bookie Sports Alive can officially kiss their long-lost account balances goodbye. The Melbourne-headquartered, Australian Capital Territory (ACT)-licensed bookie went dark in August 2011 with a deficit of $14m on its books – $3.9m of which was punters’ funds. A subsequent investigation concluded that Sports Alive had failed to properly segregate player funds from its operating capital.
The ACT Gambling and Racing Commission – which itself was out $327k via Sports Alive’s collapse – filed suit against the bookmaker’s inert corpse in the hope of clawing back some punter funds, but a 36-page judgment filed by Supreme Court Justice Ross Robson earlier this month said Sports Alive’s failure to segregate funds had left punters with no legal protection. Secured creditors stand the best chance of being paid pennies on the dollar from the $815k remaining in Sports Alive’s accounts.
The ACT regulators have been equally sullied by Sports Alive’s collapse after it was revealed that the bookie had been dipping into player funds for at least three years prior to its demise. Aggrieved punter Dennis Tuan-Mu accused the regulators of failing to do their job, telling the Canberra Times that “even rudimentary checks” of Sports Alive’s finances “would have uncovered these issues.” (If nothing else, it underscores the notion that regulation doesn’t prevent stupid operators making stupid decisions.)
Also coming under fire is former TOTE Tasmania CEO Craig Coleman, who was a Sports Alive director between December 2009 and April 2011. Bent & Cougie liquidator Hamish Mackinnon has accused Coleman and other board members of breaching their duties by permitting the company to behave as it did, charges that Coleman has rejected. Questions have also been raised as to why TOTE Tasmania went ahead with a $5.8m investment in Sports Alive despite pre-purchase warnings by Deloitte accountants that the company was not properly segregating accounts. TOTE was acquired by Tatts Group in December 2011, and Tatts reportedly received assurances that it would be indemnified from any legal claims resulting from Sports Alive’s stupidity.