Ladbrokes Ties Bosses' Pay To Problem Betting
One of Britain's biggest high street bookmakers will this week commit to linking the pay of its top executives to the success of its efforts to prevent problem gambling amid the growing threat of a Government crackdown on the industry.
Sky News has learnt that Richard Glynn, the chief executive of Ladbrokes, will pledge the insertion of responsible gambling criteria into the contracts of the company's most senior managers when he presents annual results to the City on Tuesday.
The commitment comes as ministers consider swingeing restrictions on bookmakers' use of lucrative fixed-odds betting terminals (FOBTs), which contribute substantial chunks of the profits recorded by companies such as Ladbrokes, Gala Coral and William Hill.
In a letter sent on Friday to Helen Grant, the Gambling Minister, and other industry stakeholders, and which has been obtained by Sky News, Mr Glynn said that Ladbrokes would promote the Association of British Bookmakers' Code of Player Protection in hundreds of its shop windows from this week.
"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," he said.
It was unclear on Sunday exactly how the new measures would be defined and whether or not they would be subject to independent monitoring.
Ladbrokes, which declined to comment on the letter, is expected to spell out further details of the initiative, including the number of employees who will be included in the scheme, alongside its financial results.
Like those of its rival William Hill, its shares have fallen by about 20% since an escalation of political attacks on the gambling sector.
In total, FOBTs generate annual revenues of more than £1.5bn, prompting David Cameron to say last month that he would "get to grips" with the issue.
Ed Miliband, the Labour leader, said before Christmas that betting shops were being turned into "mini-casinos" because of the proliferation of gaming machines, and promised legislation to give local authorities powers to restrict the number of FOBTs.
Ladbrokes' response appears to be designed to return the industry to the front foot in the debate, and is likely to put pressure on its competitors to adopt similar conditions in the way they pay their top executives.
"Ladbrokes has always placed a high degree of focus on responsible gambling. It is a core part of our values and a central component of our licence to operate. To this end, we have always trained our staff, promoted responsible gambling and funded research, education and treatment services. However, we have decided to go a step further," said Mr Glynn's letter.
"In short, we believe that responsible gambling not only needs to be at the heart of our business, it needs to be seen to be at the heart of our business."
Mr Glynn added that the betting industry was keen to take action based on evidence rather than kneejerk sentiment.
"[The industry] is committed to helping the person, irrespective of the product. This is in contrast to those who are being unrealistic and calling for actions that would impact the majority of customers who gamble responsibly and would, in all probability, drive problem gamblers to other sectors or, worse still, underground to illegal operators," he said.
The bosses of the leading bookmakers are understood to have met Ms Grant several weeks ago to discuss the issue of problem gambling, which academic studies suggest is on the increase in Britain.
Mr Glynn insisted that the incidence of problem gambling remained both low and stable.
"We want to minimise harm and the measures we are announcing today ensure that our senior management is incentivised to deliver exactly that," he said.
"Our business relies on our customers enjoying their experience - indeed millions of customers visit their local betting shop without any problems and this forms a key part of their overall leisure experience. However, there are some customers who do experience problems and we want to make sure that we help them to help themselves, as much as possible, to avoid getting into difficulties."
Ladbrokes' customer loyalty scheme, called Odds On, would be a useful tool in managing the issue of problem gambling by providing robust data to help analyse consumers' behaviour.
"We will look to use the insights we gain to learn more about 'at risk' behaviour for both high stake and extended session play at lower stakes and therefore how to target interventions at identified players," Mr Glynn added.
"We will continue to share these learnings with researchers and across the industry."
In a separate industry-wide letter reported by The Sunday Telegraph, the chief executives of Gala Coral, Ladbrokes, Paddy Power and William Hill, and the chairman of Betfred, insisted that the overwhelming majority of their machine customers gambled responsibly.
New safeguards including enforced breaks for customers and alerts to staff about the amount of time and money spent on FOBTs are being introduced, the bosses said.
The prospect of a further clampdown on bookmakers' use of FOBTs has contributed to investor concerns about the performance of Ladbrokes and some of its rivals.
Ladbrokes plans to reduce its high street store estate by as many as 50 shops this year, the company said last week.
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