The collapse last month of corporate bookmaker Sports Alive was big news in a local wagering industry famous worldwide for its stringent regulatory environment. Leading that story was the likelihood that punters would be left with nothing, despite laws requiring Sports Alive to have kept segregated trust accounts to protect customer deposits.
What didn't get much coverage was the impact on Sports Alive's wholesale partners like Bet247 and social sportsbetting start-up PuntClub.com, but Punt Club at least looks set to live happily ever after, having just formed a new relationship with NT-based corporate bookmaker and Tabcorp subsidiary, Luxbet.
A key part of that deal was covering all balances in Punt Club customer accounts, something other Sports Alive customers can only dream of after the creditors meeting detailed a fairly sorry state of affairs with punters likely last in line for whatever the liquidators can recover.
"It was a bit of a nightmare for a few days", recalled Punt Club founder & CEO Jason Neave, "but Luxbet really made the process easy, they're part of a huge group, and they came to the party with a guarantee for our customer account balances so in the end it was a no-brainer."
Luxbet’s General Manager, Andrew Vouris added, “The PuntClub.com concept is like nothing else on the market at the moment and Jason’s team have developed a first class product. The events of the last couple weeks have no doubt been a stressful time for everybody involved but we are happy that their members can continue punting in a safe and secure environment whilst benefiting from an improved betting facility”
This customer account balance debate has been raging at the office of the liquidator for Sports Alive. Licensed by the ACT Gaming and Racing Commission, Sports Alive was (as are corporate bookmakers in other state jurisdictions) required to hold all customer deposits in segregated bank accounts, protecting punters from exactly this type of event. Unfortunately it seems regulations somehow weren't followed and those same punters are now out of pocket to the tune of millions of dollars - something the Commission itself is under increasing pressure to explain.
"Customers with money in their accounts are considered unsecured creditors", Neave explains. "But that seemed a bit UnAustralian to me, so we did a flying tour of bookmaker HQs to look for a solution that would sort out our customers and keep our business going - Luxbet ticked both boxes in our first meeting."
A similar rescue took place last month, when another of Sports Alive's wholesale partners, Bet247, struck a deal with racing identity Tom Waterhouse's bookmaking operation to take on their customers and honour all customer account balances. "Tom and his team acted quickly, and we knew we had to as well" Neave said. "The upshot is that our customers are now protected, and thanks to Luxbet they can continue running their punters clubs through our service without having to line up at the liquidators office cap-in-hand with the rest of Sports Alive's customers."
Having a partnership in place was critical for business survival. PuntClub.com is part of a new breed of online businesses that use a transactional model rather than just advertising dollars to make money. Built around the age-old Australian tradition of running punters clubs (where a group of friends all chip in some money each week and take turns to bet on behalf of the group), the 'social betworking' site automates member payments, communication and reporting, while the betting itself is handled by a bookmaking partner - in this case the newly signed Luxbet.
"While we don't actually hold the bets, affiliate commissions from bets our customers place are pretty key to the health of our business" said Neave, who then somewhat jokingly predicts what with Luxbet on board he can again see the day when the humble punters club will take over from footy tipping as a constant in every workplace or sporting social club.
And with the corporate weight of Luxbet and Tabcorp in their corner, who'd bet against it?
PuntClub.com is a social sportsbetting startup that lets groups of mates run their punters clubs online, without the admin nightmare usually associated with such an exercise. Incubated in Adelaide, South Australia, by digital agency The Distillery, Punt Club looks forward to the day when every sporting club, office social group, or bunch of mates, runs a punters club in the same way they run their footy tipping competitions.
Luxbet is a racing and sports corporate bookmaking operation, licensed by the Northern Territory Racing Commission in Australia and launched in September 2008. Luxbet is owned and managed by Tabcorp Holdings, an Australian top 50 ASX listed company.
Luxbet offers fixed odds betting and tote odds betting on racing, and a full suite of licensed fixed odds sports and novelty event offerings. Its service is conducted through Internet and telephone betting.