SUBMISSION 21
Memorandum submitted from Ladbrokes Worldwide
INTRODUCTION
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.
THE IMPACT
OF THE
PROPOSALS ON
THE SUPPLIERS,
LESSORS AND
THE USERS
OF GAMING
MACHINES
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.
THE PREVENTION
OF CRIMINAL
INFILTRATION OF
GAMBLING
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.
THE SOCIAL
IMPACT OF
THE CHANGES
PROPOSED AND
THE SAFEGUARDING
OF THE
YOUNG AND
OTHERWISE VULNERABLE
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.
THE POTENTIAL
IMPACT ON
THE NATIONAL
LOTTERY OF
INCREASED COMPETITION
FOLLOWING THE
DEREGULATION OF
CASINOS, BINGO,
POOL COMPETITIONS
AND SOCIETY
LOTTERIES
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.
IN CONCLUSION
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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