Ladbrokes in promise on problem betting
(Guardian (UK) Via Acquire Media NewsEdge) Ladbrokes will seek to calm the row over the lucrative fixed-odds gambling machines in high-street bookies this week with a vow to link executive pay to targets on tackling problem gambling.
The bookmaker also plans to set up a board committee to investigate responsible gambling policies as it responds to widespread criticism of machines dubbed the "crack cocaine of gambling" by campaigners.
Ladbrokes has written to the minister responsible for gambling, Helen Grant, and industry stakeholders before its financial results tomorrow, saying it will promote the Association of British Bookmakers' code of player protection in shop windows from this week. The letter also promises a link between future pay for top bosses, including the company's chief executive, Richard Glynn, and efforts to tackle problem gambling. It is not yet clear, however, how Ladbrokes will measure success in that area.
"On Tuesday, we will also announce that the Ladbrokes board has decided to formalise a number of responsible gambling performance measures into senior executives' remuneration. A committee will be established, reporting to the main PLC board, to oversee this and put the measures into practice from 2015 at the latest," Glynn says in the letter, obtained by Sky News.
The move seeks to pre-empt some of the inevitable questions from investors and analysts worried about the threat of an imminent government crackdown on high-speed, high-stakes gambling machines. David Cameron pledged last month that he would address the "problem" of fixed-odds betting terminals (FOBTs), indicating that the government would act after an industry-funded review reports in the next few months.
Political criticism of the machines - on which punters can bet up to pounds 300 a minute - has been widespread, with the Labour leader, Ed Miliband, warning they are "spreading like an epidemic".
The machines have become important moneyspinners for betting chains such as Ladbrokes, William Hill and Gala Coral. The 33,000 fixed-odds betting terminals in the UK account for about pounds 1.6bn of the industry's in-store takings of pounds 3bn, according to research group Mintel.
Analysts at Barclays estimate that Ladbrokes has the greatest dependence on FOBTs. The touch screen terminals account for nearly 40% of the company's earnings, compared with 26% for William Hill before interest and tax, the bank said.
Shares in Ladbrokes fell sharply on the back of Cameron's remarks in January and are down more than 13% so far this year.
Bookmakers have sought to counter some of the criticism by highlighting new measures to ensure gamblers use FOBTs "responsibly". In a letter to the Daily Telegraph, the bosses of Gala Coral, Ladbrokes, Paddy Power, William Hill and Betfred said the "overwhelming majority of our machine customers gamble responsibly".
"Problem gambling levels in the UK are low by international standards, amounting to around half a percent of the population, and have not increased since the introduction of gaming machines in betting shops or the inception of online gambling," they wrote.
Amount in pounds that betting shops earn from fixed-odds betting terminals a year, out of total in-store takings of pounds 3bn
(c) 2014 Guardian Newspapers Limited.
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