Elmer Funke Kupper and those who, back in 2009, pursued the plan to invest in an online gaming licence in Cambodia are certainly guilty of one thing – poor judgement.
In the aftermath of explosive allegations that Tabcorp may have been involved in a $200,000 bribe, I asked a former Australian gaming regulator for a view on the potential fallout.
ASX boss quits amid Tabcorp scandal
Find out why the head of Australia's stock exchange Elmer Funke Kupper resigned unexpectedly. (Video courtesy ABC News 24)
He was staggered that Tabcorp had even contemplated getting into business in a country like Cambodia where the regime is widely acknowledged as being riddled with corruption.
For that matter he was also surprised that James Packer's Melco Crown had risked building a casino in the Philippines.The risk did not pay off for the ASX boss Elmer Funke Kupper who has quit in the face of an international anti-bribery investigation led by the Australian Federal Police. Photo: Daniel Munoz
The issue of sovereign risk is far more acute for gaming companies that need to meet a much higher water mark when it comes to probity.
These companies make their money courtesy of state government-issued licences that dictate among other things a standard of governance and behaviour.
Playing in the minefield of developing countries which have entirely different standards of corporate behaviour is risky indeed.
It is now clear that this was a risk that didn't pay off for Funke Kupper, who thanks to an investigation by United States authorities and the Australian Federal Police has resigned as head of the ASX and taken a leave of absence from the Tabcorp board.
Even if he is ultimately cleared from bribery allegations, he may have blown up his career prospects and his reputation.
This is despite the fact that he has been hailed by the business community as a talented chief executive who has been successful in transforming bringing innovation to the ASX.
The experience at Tabcorp brings into focus the risks for Australian companies investing in developing countries with inferior governance and regulatory regimes or where they cannot have majority control.
Plenty continue to be enticed by the lucrative spoils of investing in a burgeoning middle class Asian market – and plenty have had their fingers burnt in the process.
Indeed, all too often investors take a dim view of the risk companies can face getting into these markets.
Telstra was a prime example. Its proposal to put $1.3 billion into a joint venture with San Miguel in the Philippines was one that the market near-universally opposed.
The recent decision by Telstra to ditch the idea (said to be on the back of being unable to negotiate a refund from its partner in the event of regulatory troubles) was warmly welcomed by investors.
Meanwhile ANZ is now retreating from a large part of it's more than decade-long push into various Asian markets due to inadequate returns.
Even the large mining companies like BHP Billiton and Rio Tinto which have ample experience of investing in difficult developing countries have had their share of problems.
Last year BHP Billiton was fined by US regulators over hospitality provided to foreign government officals during the 2008 Olympic Games in Beijing.
The potential financial fallout for Tabcorp is near impossible to determine given at this stage we are only aware that investigations are being made.
An analyst from CLSA, Sacha Krien, has made a conservative estimate of $120 million as the cost to Tabcorp for expenses and penalties. He notes that the lack of any benefit from the alleged payments is likely to limit the potential penalties.
In a note to clients this week he said that in Australia very few cases have made it to trial. But he said that "In the US, there is a greater incidence of enforcement and this has largely been through what are known as Deferred Prosecution Agreements, effectively a negotiated settlement.
"In Australia the maximum penalty would be $17 million while in the US most cases end via a plea bargain and settle out of court."
He, like many others, doesn't see much risk of Australian state based licences being suspended.
Thus the downside for Tabcorp may be relatively minor in a financial sense. Indeed the lack of prospective earnings growth will be weighing more heavily on the share price.
But it could be months or even years before Funke Kupper will get some certainty and in the meantime his future professional career is uncertain.
His decision to step down as head of the ASX was appropriate under the circumstances.
But the biggest immediate loser from the Tabcorp probe could well be the West Australian government which is seeking to privatise its own TAB business and was looking to Tabcorp to set the bidding pace.