Sportsbet allows punters to bet on share market movements

Sportsbet has rolled out betting options on the ASX, a practice that the corporate regulator is currently seeking to ban.

Sportsbet says framing a market around the ASX close is no different to other forms of rsiky investment. ASXGetty Images)

Gaming group Sportsbet has rolled out betting options on the share market index, a practice that the corporate regulator is currently seeking to ban.

The online bookmaker will start allowing punters to place bets on whether the ASX200 and All Ordinaries Index will be higher or lower at the close of the trading day.

Sportsbet spokesman Rich Hummerston said the ASX ‘higher or lower’ bet has been introduced due to the increased volatility within markets due to the coronavirus pandemic.

“Well, they’ve always said the stock market is just gambling, and now, it literally is,” Mr Hummerston said.

“And during these times, our markets are probably safer than the actual stock market.”

The Australian understands that this type of “all or nothing” bet is similar to the characteristics of a binary option, which the Australian Securities and Investments Commission is seeking to ban through its product intervention powers.

Binary options, or contracts-for-difference (CFD), are a highly risky form of betting on the change of value of an index, security or foreign exchange. Unlike a normal investment where the buyer owns the underlying asset, CFDs are just bets placed on the price movement.

An ASIC spokesman said the regulator does not comment on specific companies or products, but did note betting on a rate or index movement might be considered a derivative, which would require a licence under law.

“ASIC will look at any product to determine if a licence is required, looking at what the product is being used for,” a spokesman said.

ASIC is currently proposing to ban over-the-counter retail sale of CFDs by betting agencies, as it believes the practice delivers poorer consumer outcomes.

In August 2019, ASIC Commissioner Cathie Amour said: “We believe binary options provide no meaningful investment or economic use, and have product characteristics similar to gambling products.

“We are concerned that consumers continue to suffer significant harm from trading these products.”

Market betting odds provided by Sportsbet indicate that the odds of the market closing lower than the open currently stand at $1.50. While the market closing higher sits at a return of $2.50.

It is also offering a return of $91, if the market closes at the same price.