WATCH OUT: Be wary of scams when putting bets on the Melbourne Cup race day.
WATCH OUT: Be wary of scams when putting bets on the Melbourne Cup race day.

Scamwatch: Avoid a rough Melbourne Cup ride

AMATEUR punters are warned to be on the watch for betting and sports investment scams which falsely promise high odds and big returns on Melbourne Cup day.

The Minister for Small Business Michael McCormack said already this year Scamwatch has received 184 reports of betting and sports investment scams, with nearly $1.6m lost.

His department found men are overwhelmingly likely to be affected by these scams, making three out of every four reports to the Australian Competition and Consumer Commission.

"Unfortunately, sports investment scams are very successful with half of the reports to Scamwatch from people who have already lost money," Mr McCormack said.

"The average loss is very high at more than $18,000 compared to about $6,500 for all scams. These scams are sophisticated and convincing which is why it is vital people should know the warning signs."

The three main types of sports betting and investment scams are:

Computer prediction software

  • Scammers will try to sell people software that promises to accurately predict sporting results, for example the Melbourne Cup winner.

Betting syndicates

  • Scammers will try to convince potential victims to join a betting syndicate.
  • People are required to pay a hefty fee (often in excess of $15,000) to join and make regular deposits. The scammers say the funds are being used to place bets on behalf of the syndicate but in reality the scammer is pocketing all the funds.

Sports investment

  • These scams are usually promoted as business opportunities or investments.
  • The scammer will use technical or financial terms such as "sports arbitrage" or "sports trading" to make these scams look legitimate. They are nothing more than a con to get people to put money into an investment that does not exist.

"Do not believe anyone who says they have foolproof systems that can 'guarantee' a profit through betting. If someone can accurately predict gambling results, why would they need to sell it to you to make money?" Mr McCormack said.

"Scammers use fancy brochures and technical terms to try to convince you their 'opportunity' is legitimate. If you are contacted by someone trying to sell you 'investment opportunity' or 'prediction software', hang up the phone, delete the email or toss the glossy brochure in the bin."

More information is available at Scamwatch.

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