The Register®

Original URL: http://www.theregister.co.uk/2011/08/11/sportsbet_secret_commissions/

We buy online punters: Sportsbet

Commissions under attack in Australian inquiry

By Richard Chirgwin

Posted in Business, 11th August 2011 22:50 GMT

Watch Now : Virtual Machine Movement with Hyper-V

Illegal bookmakers have always relied on “referral marketing”, but it’s now emerged that recruitment commissions cost Australian online betting agency Sportsbet as much as $AU4 million each year.

According to The Age, the online agency’s CEO Cormac Barry also conceded [1] that new punters aren’t told about the commissions paid to get them betting – something which may be illegal under various laws covering secret commissions. Barry also said he isn’t familiar with such legislation.

The Gambling Reform committee [2] was told by Senator Nick Xenophon – a high-profile campaigner against gambling – that the behaviour was “unconscionable”, and he would add an anti-commissions clause into legislation he has already introduced to control online gambling.

Barry told the committee that finders’ fees are common practice, and are paid either on a flat per-customer rate, or as a share of the punter’s losses as an “affiliate”.

The Herald Sun reports [3] that the pernicious practice uses a sliding scale: the more the new punter loses, the better the introduction fee paid, making the commission structure look something like a pyramid scheme: cover your own losses by getting someone else to sling their money at Sportsbet. ®