Select Committee on Culture, Media and Sport Memoranda


Memorandum submitted from Ladbrokes Worldwide


  Ladbrokes welcomes the Culture, Media and Sport Select Committee's inquiry into the Government's Proposals for Gambling. As the country's biggest bookmaker, we are well placed to give the Committee our views and perspectives on the development of the bookmaking industry and outline our responses to the Government's proposal on the Gambling Review.

  We are delighted that the Government has taken the bold decision to look at ways of modernising gambling laws. Today, the betting and gaming industry is rightly seen as being part of the leisure industry. However because current legislation prohibits growth and commercial development there is a need to modernise laws to reflect the changes that have taken place in wider society. The new emphasis on modernisation should mean greater commercial development but should also ensure that the industry embraces greater levels of social responsibility. As market leaders, we are aware that we have a responsibility to lead the industry in non-commercial matters as much as we do in commercial terms.

  We welcome the Government's emphasis for gambling operators to embrace a wider social responsibility agenda and take necessary action to both inform and financially support research and counselling into problem gambling. It is especially important for the industry to do as much as possible to protect the young and vulnerable in society and below we outline in greater detail specific measures that can be achieved.

  With regard to the Committee's terms of reference, we will respond to four out of the five points. We are not commenting on the specific reference to casinos as Ladbrokes sold their interests in casinos to Gala in December 2000.

  Should the Committee require any further information about this response or any other matter please contact: Christopher Bell, Chief Executive Officer at Ladbrokes Worldwide.


  We are pleased that the Government has accepted the Gambling Review proposal to allow betting shops to have up to four jackpot machines in each shop. Research that the industry has carried out shows that over 60 per cent of betting customers prefer betting with slot machines in betting shops (Mori, January / February 1998) than other betting outlets and that over 80 per cent of betting customers think that the current maximum payout from slot machines in betting shops is too low (Mori, January / February 1998). Therefore the proposed changes are welcomed by both the industry and its customers.

  This is the most significant proposal in the Government's Green Paper for bookmakers, as it is the only proposal that gives bookmakers the opportunity to increase revenue. We have continually argued for this change and urge the Government to bring forward this change ahead of primary legislation. We are keen to work with Government in looking at ways that this proposal could be introduced via de-regulation ahead of any Gambling Bill.

  The betting shop environment is a strictly controlled and well regulated premise for over eighteens only. With a tougher licensing criteria and a new fit and proper test as outlined below, bookmakers should be able to offer a wider range of games in licensed betting shops. These could include for example, progressive jackpots.

  We support the view taken by the Gambling Review and the Government that access to gaming machines for children should be restricted. In attempting to address the issue of social responsibility it is vital that as much effort is made to ensure that children have as little opportunity as possible to gamble. Licensed bookmakers, as well as other licensed premises, are clearly the best place for customers to bet with jackpot machines, safe in the knowledge that only over 18 year olds will bet.


  Keeping gambling crime free is of paramount importance to Ladbrokes. The industry has done a great deal to seek out and eradicate criminal activity. For Ladbrokes this is as important to our on-line business as our off-line business. Ladbrokes has a requirement that customer's winnings' are paid back to the same card therefore reducing fraudulent activity, money laundering or use of a stolen card.


  As highlighted above we take very seriously the issue of social responsibility. We would like to see industry standards introduced to ensure that an acceptable level of responsibility is maintained and upheld, we believe that the best way of doing that is through a fit and proper test linked to licensing. The passing of such a test should be a requirement of obtaining and retaining a betting office licence. This test should include measures to protect the young as well as measures to treat problem gamblers. Principally the fit and proper test should be based around the following criteria:

    —  Meeting predetermined service standards.

    —  Engaging in socially responsible behaviour.

    —  Meeting an acceptable level of financial probity.

  What this means in practice is that betting shops should take appropriate action to inform and educate customers about the possible risks associated with betting. We specifically recommend the following:

    —  Staff training on identifying and handling underage and vulnerable customers.

    —  Visible age restriction signage in shops.

    —  Use of, and support for, CitizenCard.

    —  Electronic age verification within the on-line business.

    —  Rigorous enforcement to ensure prizes won by underage customers are forfeited.

    —  Visible support for GamCare.

    —  Financially contributing to the Gambling Industry Charitable Trust.

    —  Membership and visible support and explanation of the Independent Betting Arbitration Service.

  Should there be non-compliance with any of the above then the Gambling Commission should be empowered to remove the betting licence.

  There are a number of specific measures we would like to see for on-line betting, they include:

    —  Support for a kite-mark system to be developed to differentiate between licensed and non-licensed on-line operators.

    —  Customers should be made aware of the game rules and terms and conditions of play on on-line gaming sites before play begins.

    —  Customers who register to play on-line should be properly identified before they are allowed to play and the Gambling Commission should issue guidelines to ensure that identification standards are comparable with off-line betting.

    —  On-line operators should enable players to set maximum stakes and limits and to self-ban.

    —  On-line links should be established with gambling operators so that customers know where to turn to should they need advice on problem gambling.

  Ladbrokes has implemented all of the recommendations above in 4.2. We were the first betting company to financially support the Gambling Industry Charitable Trust. We have also consistently financially supported GamCare and are founder sponsors of CitizenCard. We are also founder supporters of IBAS. Ladbrokes has taken this action because we fundamentally believe that the industry has a responsibility to inform, educate and protect its vulnerable customers.

  Whilst we welcome the Government's proposal to find adequate funding for the Gambling Industry Charitable Trust, we hope that acceptable solutions are found to funding the Trust ahead of any considerations about a possible statutory levy.


  With regard to betting, none of the recommendations are likely to have any impact on the National Lottery. The only measure that increases the betting industry's opportunity to offer a wider range of bets is via jackpot machines. The other measures, whilst welcome will not lead to significant revenue increases.

  Whilst the terms of reference for the Gambling Review did not include the National Lottery, the Gambling Review Report did recommend that the bookmakers be able to offer customers bets on the National Lottery. We welcomed this recommendation, in the same way we welcomed the recommendation from the Culture, Media and Sport Select Committee in March 2001 that betting on the National Lottery be allowed. The Government rejected the Gambling Review proposal. We would like the Government to reconsider this again as and when the National Lottery licence is reconsidered. Betting on the National Lottery is prohibited under the National Lottery Act 1994. It is the sole event on which bookmakers are legally not allowed to bet. Betting customers in Ireland can bet on the National Lottery and there is no direct link between betting on the numbers and a loss of sales.

  Research commissioned by the Betting Office Licensees Association (BOLA) shows that:

    —  87 per cent of betting customers want to have the opportunity to bet on the National Lottery.

    —  The majority of customers would prefer to bet on only three numbers rather than "looking for a big win" and betting on four numbers or more.

    —  The extra money going into the Treasury would be in the region of £15 million to £30 million per year.


  We are pleased that the Select Committee has instigated this review into the Government's proposals for the Gambling industry. We note that this is an initial review and should the Committee decide to hold a further inquiry, we would gladly participate if relevant to the betting industry.

  As we have stated above and outlined in our report to both the Gambling Review and the Government, we believe that this review is long over-due and are delighted that the Government has found time to debate the regulatory framework that will allow the industry to prosper and grow. However, there are substantial issues that need to be carefully considered before the Government's proposals for gambling are fully implemented. The Government and the new regulator will need to manage the consequences of the potential proliferation of gambling on the high street.

  We disagree with the proposal to transfer licensing from magistrates to local authorities. The current system has served the betting customer, the industry and the local community well. Licences have been awarded on the basis of demand and independence, there has been no hint of political pressure or influence. However, we are concerned that with the transfer to local authorities it is more likely that licensing decisions will be based upon political opinions, hence giving a level of instability to licensing decisions.

  It is clear that perceptions of the gambling industry have changed over-time. The industry has done a great deal to contribute to this change through the improvement in its services and standards. However the Government has done much to add to this by maintaining a strong regulatory environment and ensuring that companies adhere to a high level of probity.

  Knowing that the industry has taken such a responsible attitude has allowed the Government to accept many of the recommendations that the Gambling Review made. For bookmakers whilst there are a number of important changes that will benefit the industry and customers alike, there are not that many proposals that will materially influence the betting customer's experience in the shop, apart from betting with jackpot machines, as such we would like to see changes introduced via de-regulation ahead of a gambling bill.

3 May 2002

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