LEADING THE WAY IN RESPONSIBLE BETTING AND GAMING
At Ladbrokes, we have always placed great emphasis on being a responsible company, pushing for high standards within our sector. In an industry undergoing rapid change, our view is that trust never goes out of fashion. The continued scrutiny of the role of betting companies in society has prompted us, and the sector as a whole, to raise the game further. We have embraced the regulatory and voluntary changes at the sector-level while also progressing our own initiatives, over and above the expectations of our stakeholders.
Research suggests that problem gambling is a complex issue and the number of problem gamblers will not decrease by focusing on one element alone. That is why we have put in place a multi-faceted strategy which we will evolve in the years to come. We are fully aligned with the GB Gambling Commission's objectives to ensure that gambling:
- is crime free;
- fair and open; and
- children and vulnerable people are protected.
Our activities are coordinated by a Head of Responsible Gambling, appointed in 2013, whose work is supported by colleagues across the business. In 2014, we created several new roles within our customer and integrity teams to help us maintain our leading position as a responsible company.
Taking our responsibilities seriously
In July 2014 we established a new Board Committee to oversee our delivery against our responsible gambling objectives. The Social Responsibility (SR) Committee comprises of Senior Independent Director, John Kelly (Chair), and non-executive director, Christine Hodgson, with Chairman, Peter Erskine, and the Chief Executive, in attendance. The Committee brings responsible gambling firmly into the Boardroom and has produced a set of KPIs that will help us link executive remuneration with responsible gambling performance from 2015 onwards. This is a major step for us and a first within the sector.
During 2014 we publicly committed to a set of voluntary measures to make our advertising more responsible. The initiative includes a ban on advertising sign-up offers on TV before 9pm, dedicating 20% of our shop window advertising space to responsible gambling messages and to the removal of gaming machine advertising from shop windows. We also launched the UK's first dedicated TV ad to promote responsible gambling with no promotional or sales messages. This formed part of our new 'Ladbrokes Life' campaign, which adopted a markedly less aggressive tone than other betting advertising.
With responsible gaming
Using algorithms to detect problem gambling
In December 2014 we embarked on a pilot study to track customer behaviour and intervene when we suspect problem gambling might be occurring. Using data from Odds On cards, we systematically assess the gambling habits of approximately 8,000 shop customers on a weekly basis. We defined a set of rules that may indicate a player showing signs of problem gambling and monitor individual players' behaviour against these. If a customer's gambling patterns trigger the algorithm, we message the person about their status and how to stay in control. At the same time, we have tested the effectiveness of the intervention against a control group of customers in a different region. We still have a lot to learn, but we believe this type of player protection arrangement is promising. During 2015, we will dedicate more resources to the trial, expanding the coverage, experimenting with different ways of intervening and teaming up with external partners for greater insights.
We were founding members of the Senet Group, a new self-regulatory body dedicated to promoting responsible gambling standards and to ensure that the marketing of gambling is socially responsible. Fully operational from January 2015, the Senet Group will be able to 'name and shame' or impose fines on operators in breach of industry standards. It will also launch the first cross-operator campaign to promote responsible gambling in early 2015.
We helped develop the Association of British Bookmakers (ABB) Code on Responsible Gambling and Player Protection in 2013, the first of its kind worldwide. This year we invested much effort in implementing it across our business. This will also be a key priority for 2015. The Code highlights four areas for improved performance:
- Providing adequate information on how to gamble responsibly;
- Providing tools to help customers better control their activity;
- Training staff to detect signs of potential problems; and
- Undertaking central analysis of data to spot signs of abnormal activity.
We have stepped up the promotion of responsible gambling messages. As part of this, we have introduced more prominent, more frequent and clearer messages on staying in control in our shops, on our machines and across our digital estate.
During 2014 all employees in the UK shop estate completed our 'Positive Interaction' programme. This training helps colleagues understand player behaviour, interact on the shop floor and intervene if they spot any signs of problem gambling. In addition, 'Positive Interaction' covers aspects such as dealing with anti-social behaviour, managing voluntary spend limits and completing self-exclusion agreements.
We provide tools to help customers stay in control of their gambling experience. For example, customers using our gaming machines can set their own voluntary spend or time limits and will receive mandatory time- and money-based alerts. Notifications also appear behind the shop counter, prompting colleagues to interact with customers and to identify any potential problem gamblers.
Over the past year, we have invested significant resources in developing digital insights into problem gambling patterns. Using data from our Odds On loyalty cards and working with external partners, we aim not only to detect and intervene when problem gambling occurs, but to identify the trajectories that lead to such behaviour. If we believe a customer is on a trajectory towards harm, then we will interact with them to try and prevent this from happening.
Supporting research, education and treatment
During 2013 and 2014, together with our four largest peers within the industry, we made our gaming machine data available for analysis by independent researchers. In analysing data from 6.7 billion bets across 8,297 shops, this was the first time an independent, large scale research project into problem gambling had been undertaken in Great Britain. The findings were published in late 2014 and will be used to inform our responsible gambling strategy and our discussions with key stakeholders.
We also promote multiple harm minimisation initiatives through our support of the Responsible Gambling Trust (RGT). Organisations that benefitted from RGT funding in 2014 included GamCare, the National Problem Gambling Clinic (CNWL) and the Gordon Moody Association. Our total contribution to RGT amounted to £682,500 in 2014.
Keeping our data safe
As an increasingly digital business, we hold large amounts of data on our customers, business partners and employees. Safeguarding this data and ensuring data privacy remain a high priority to us. During 2014, we stepped up our efforts using the UK Government's '10 Steps to Cyber Security' framework. Following an independent assessment of our systems and processes, we have a programme in place to manage cyber risks, now and in the future.
Measuring our performance
External benchmarking is an important means of comparing our performance with that of our peers. For the 12th consecutive year we remain a constituent of the Dow Jones Sustainability Index (DJSI), an elite index for responsible companies. We are the only European betting company included in the prestigious World Index, achieving maximum scores of 100% for our approach to responsible gambling and our anti-crime measures. Since 2002 we have also been a member of FTSE4Good. This year we were ranked in the 99th percentile of companies in our industry segment, achieving maximum scores for customer responsibility and corporate governance.
HAVING A POSITIVE IMPACT ON OUR COMMUNITIES
Being a good employer
We are an inclusive, people-driven business. As our international operations grow, we recognise the need to spot, retain and promote talent from a variety of backgrounds. In 2014, we launched our 'Females in Leadership' programme to increase the number of women in senior positions. Having completed a survey and a benchmarking exercise, we are setting up a mentoring scheme to nurture talent and are working to increase the visibility of female role models. During 2015, we also developed a consistent grading, talent and performance and reward framework to help us achieve our global ambitions. Our policies remain consistent with the requirements of the Universal Declaration on Human Rights and the spirit of the International Labour Organization core labour standards.
Providing meaningful employment
Now in its second year, Ladbrokes' UK-wide apprenticeship scheme has gone from strength to strength. We received over 14,500 applications to join the scheme in 2014, with a selection of 467 eventually joining us. We lifted the maximum age-restriction of 24 years so that any talented candidate can secure a place. The 12-month, fully supported development programme provides candidates with accredited training in customer service, literacy and numeracy and responsible gambling. Upon completion, successful apprentices obtain an NVQ Level 2 in Customer Service and a position in one of our shops.
(1) Members of the top four management grades.
(2) UK Employees only (86% of total employees).
Partnering against crime and anti-social behaviour
Reducing crime and anti-social behaviour remains a key priority for us. Where possible, we work in partnership with local authorities and other bodies to make this happen. Our partners include Crimestoppers, the Association of Business Crime Partnerships and the Safe Bet Alliance (SBA). We continue to support the SBA's Voluntary Code of Safety & Security - National Standards for Bookmakers, which we helped review and update in 2014. In recognition of the results achieved in reducing violent crime, the SBA was formally endorsed by the Association of Chief Police Officers in June 2014. Police figures obtained by the Association of British Bookmakers show that betting shops now have some of the lowest levels of crime among high street retailers.
Valuing safety and well-being in the workplace
We place great emphasis on health and safety (H&S) across our operations and monitor our performance on a monthly basis. During 2014, we reviewed our approach to supporting colleagues involved in critical incidents at work, ensuring they receive the correct level of support, rapidly and consistently. We have pioneered Primary Authority relationships in this area, working closely with Liverpool City Council on general H&S and fire safety. Such partnerships ensure consistency in enforcement and regulation while bringing cost benefits to both regulators and ourselves.
A major contributor
According to research from 2013, the UK betting industry directly accounts for £2.3 billion toward GDP and 38,800 full-time equivalent jobs. The broader economic footprint of the sector amounts to £5 billion and around 100,000 full-time equivalent jobs in total. Ladbrokes employs over 14,400 people across 14 countries, contributing substantially to the communities in which we do business. In 2014, we paid £258.2m in wages and salaries, of which £230m was in the UK. We spent an additional £2.7m on sponsorships, creating benefits for the wider economy.
Paying our taxes
At Ladbrokes, we recognise the importance of taxes as a major revenue stream for governments and the vital services they perform. In this respect, we are committed to:
- Complying with and following the law in all countries of operation;
- Being transparent in our reporting of tax affairs to all our stakeholders, meeting all regulatory requirements and reflecting best practice;
- Engaging proactively and openly with local and national tax authorities;
- Driving sustainable returns for our shareholders.
During the year we paid over £21m in taxes to local councils in the UK and generated a further £233m in taxes to the UK Treasury and the greyhound and horseracing industries. We paid an additional £27m in taxes throughout the world. In summary, our effective tax-rate on profits amounts to 71.5%, which is far higher than for other non-betting retail companies.
Ladbrokes participates in the Total Tax Contribution survey by PricewaterhouseCoopers LLP, a benchmarking exercise comparing the total tax contribution of the biggest companies in the UK. The 2014 survey ranked Ladbrokes 32nd for its taxes borne in the UK out of 103 companies taking part in the assessment.
OPERATING WITH INTEGRITY
As with any major business, our activities have an impact on the environment. Our main impact is caused by the electricity and gas used on our premises. Fossil fuel consumption emits greenhouse gases (GHG) which contribute to climate change. Climate change in turn poses a risk to our business, especially as we expand into overseas markets.
Our carbon footprint
Unfortunately our GHG emissions increased by 11% in 2014. This is primarily because of the adjusted emission factor for the UK Grid Electricity, which is beyond our control. The energy usage of our GB shop estate increased by 4%, mainly due to 2014 being the UK's warmest year since records began in 1910. Despite the increase, since initiating our ambitious energy-reduction programme in 2008, we have reduced our GB GHG emissions by 20%. Our plans to convert all our UK shops to LED lighting, replacing over 98,000 fittings, regrettably had to be postponed. This will now take place in 2015 and we fully expect our energy consumption to decrease in the years to come.
Global GHG emissions by revenue1,2,3,4
|Metric tonnes CO2e per £m net revenue||45.9||43.0|
For more information
Our CR Report contains further details on Fair Play at Ladbrokes. Our full disclosure and supporting documents are available at www.ladbrokesplc.com/corporate-responsibility.
Ladbrokes is a proud constituent of the following indices
(1) Based on 2014 UK Defra GHG reporting guidance and conversion factors and includes Scope 1: direct emissions from the combustion of fuel and Scope 2: indirect emissions from the purchase of electricity. 2013 data restated due to better data.
(2) Emissions from our global operations include those arising from our businesses in the UK, Ireland, Belgium, Gibraltar and Spain. Data for our recently acquired businesses in Australia, Israel and the Philippines is not included. It is estimated (based pro-rata on headcount) that this will increase our global GHG emissions by no more than an additional 0.5%.
(3) Excluding fugitive emissions from refrigerants, which represent less than 2% of GHG emissions from our business operations.
(4) Excluding High Rollers.