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Office of Fair Trading officials in the Australian territory of Queensland are currently investigating the activities of up to thirty sports arbitrage companies, mostly based on the Gold Coast, reports the Courier-Mail newspaper.
Some 650 gamblers have lodged complaints about the operators, who have allegedly been ripping players off with elaborate sports betting scams involving millions of dollars.
It is understood that half of the companies have vanished, after police found only empty land or a post office box as the principal place of business after following up on customer complaints.
Sporting arbitrage involves customers being offered "guaranteed" wins by spreading their bets on all possible outcomes with different bookmakers.
Nine software firms are also believed to be under investigation, and the newspaper names Sports Investment Services, which touts sports betting returns of 56 percent compared with only 6 and 9 percent on the share and property markets. Sports Investment Services director Mark Henderson told Courier-Mail reporters he had had several complaints, but insisted he had done nothing wrong and sold software to help pick winners.
"It gives clients stand-out picks to bet on," he said.
Asked about the claims of 56 percent betting returns on the company's website, Henderson said: "At the time when it was published these figures were correct but they are variable and at different points they can return different things."
The Courier-Mail reports that 650 punters have complained since last August after losing on the intricate betting systems or being unable to contact companies once they paid membership fees of between A$3 000 and A$19 000.
Fair Trading Minister Peter Lawlor told the newspaper that the high number of complaints showed consumers were rarely pocketing any profits.
"They are simply scams which are designed to take the money off unwitting consumers," Lawlor said. "We also found that once these companies start receiving complaints from their clients, they often simply close down and start up again somewhere else under a new name."
Lawlor said some of the companies styled themselves as investment schemes using "financial instruments" and "risk free" to secure the profits. They also often used telemarketers with false names to entice clients into parting with their money, he said.
The Office of Fair Trading would not confirm which companies were in the investigation's sights, but the Courier-Mail names Suncity Equities and Investments and a firm called Profitrunner as being among those investigated.
The money thought to have been lost through the companies, which are often part of a tangled web of other corporates, is believed to be between $4 million and $6 million.
The probe does not involve mainstream betting companies such as UNiTAB or Betfair.
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