over 2,100 shops in the UK employ over 16,400 people contributes 6 billion to the UK economy low margin industry

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1 About Ladbrokes Ladbrokes is the world s largest retail betting company, with over 2,100 shops in the UK We employ over 16,400 people internationally 14,600 within the UK We offer betting on sports, music, politics, and novelty events in addition to games such as roulette and blackjack via our websites, mobile applications, telephone betting and gaming machines within our shops The betting industry contributes 6 billion to the UK economy via its own output and employment as well as its links to other sectors Betting is a low margin industry from every pound, about 85p on an over-the-counter bet and 97p on machines is paid back to the customer A third of betting shops making under 22,000 profit per year We can pay up to 72% of our net revenues in taxes and levies betting shops paid nearly 1bn in taxes and levies last year 10.75% of all profits from bets on horses go directly to the horseracing industry totalling around 60m per year and 6% of those on greyhounds go directly to the greyhound racing industry via agreed levies and contributions The racing industry s media and sponsorship rights cost around 95m per year The average customer stake is just over 8

2 Responsible Gambling The 2010 Gambling Prevalence Study showed no significant increase in problem gambling, despite gambling participation increasing from 68% in 2007 to 73% in 2010 Those with the lowest income have the lowest prevalence of gambling and took part in fewer activities, whilst those in paid work are more likely to gamble than the unemployed Gambling prevalence is lowest among the youngest (16-24) and oldest (75+) age groups, whilst single people are the least likely to gamble of any marital status Ladbrokes is a founder member of the Gambling Research, Education and Treatment Foundation or The GREaT Foundation (formerly RIGT) and through this the industry gives 5m a year to GamCare, the leading national charity for problem gambling All of our shops have clearly displayed information on problem gambling issues and where to get help if needed All of our staff are fully trained in responsible gambling practices and how to spot problem gambling behaviour at an early stage We are a partner of Citizencard, the UK s leading proof-of-age scheme We have a rigorous Think 21! age check in all of our shops and effective online age verification controls Our shops operate a self-exclusion policy for those who recognise they have a problem Our website is screened by the Internet Content Rating Association (ICRA) to allow parents to block underage access All incidents of underage or problem gambling are reported to the Gambling Commission Our website have facilities for customers to limit their spending

3 Ladbrokes in the Community Ladbrokes in the Community Charitable Trust has donated over 6.2m to good causes since 2003 to hundreds of charities across the UK including The Samaritans, Childline and the British Association of Adoption and Fostering Last year we funded Christmas Dinners for over 10,000 older people and hosted one such event with carols and a raffle at our head office, all in aid of Age UK Last year, our employees raised over 65,000 by Wearing it Pink for the Breast Cancer Campaign Over 2,000 of our staff took part in Race for Life nationwide for Cancer Research UK We are official sponsors of the Bobby Moore Fund, dedicated to fighting bowel cancer Our Safe Bet Alliance won a Home Office Award in recognition of its innovative crime-fighting projects which helped to cut related offences in London by 46% Ladbrokes has been an official partner of Crimestoppers since 1998 and displays its leaflets and posters in all of our shops We are one of the only bookmakers to have Primary Authority Status (via Liverpool City Council), illustrating our reputation as a trusted bookmaker with effective policies. We have been actively involved with the Safer Neighbourhoods Scheme which has taken a pioneering approach to businesses, community and the police working together to tackle localised issues We operate 24/7 Central Security Control Room and panic alarms in every single shop We are recognised as having the best CCTV in the industry and are at the forefront of other crime prevention measures such as security doors and electro-magnetic locks Ladbrokes have been leaders in supplying high quality CCTV images, resulting in a high detection rate and many arrests. Detective Superintendent Robert Cummings, Metropolitan Police Flying Squad

4 Ladbrokes Briefing Gaming Machines Gaming Machines (previously Machines known as FOBTs) were introduced widely 2002 They contribute an average of 40-50% of a betting shops profit Gaming Machines (previously known as FOBTs) were Betting introduced shops are widely allowed in 2002 a maximum of four machines per shop, regardless of its size or They popularity contribute an average of 40% of a betting shops profi t Operators are taxed 20% VAT on profits and pay Betting an annual shops licence are fee allowed of 2,405 a maximum per machine of four machines per shop, regardless of its size or popularity From 2013 HM Treasury plan to introduce a 20% Machine Gaming Duty, representing a Operators 50million are additional taxed 20% VAT annual on profi bill ts and for pay the an annual industrylicence fee of 2,285 per machine HM Ladbrokes Treasury pays receives over 43m over 118m per annum per annum in VAT in VAT and and 19m 64m in machine license licence fees across fees the industry Betting shops operate B3 (max stake 1) 2) and B2 (max B2 (max stake stake 100) 100) games games On B2 B2 machines the the average average stake stake is is 18 just and more over 16, than showing half of all that stakes customers are under tend 20 to set their own level of stake Roulette is the most popular game but has only 86% of users play once a week or less a 2.7% margin, with the customer retaining an average The average of 97.3% taking of stakes is about 10 per machine per hour Games include Blackjack, Roulette and Fruit Machine Roulette is style the games most popular game but has only a 2.7% margin, with the customer retaining B2 games have time limits between plays to an average of 97.3% of stakes encourage responsible gambling B2 games have time limits between plays to Customers encourage responsible can set their gambling own limits on time or money they wish to spend The Gambling Commission states that there The is no Gambling evidence Commission of a casual found link that between there was no machines increase and problem in problem gambling gambling after the introduction of gaming machines (surveys in 1999 and Games 2007 include revealed Blackjack, it to be at Roulette a constant and 0.6%) Fruit Machine style games

5 Sustainability Ladbrokes is the only UK betting company to be listed on the Dow Jones Sustainability Index in recognition of its exceptional working practices and governance All of our contract printed products such as betting slips are made from paper which is recycled or from sustainably managed forests We are trialling a project to enable waste paper recycling by charities and community groups, providing job opportunities to the disabled and disadvantaged and funding local community projects All of our waste products from our shops and offices are treated prior to disposal and recycled wherever possible Due to changes in shop fitting and lighting, our shops are now 30% more energy efficient We are on track with our aim to reduce our carbon footprint by 21% by 2013 All of our new shops include motion detecting sensors for lighting Water usage in our shops and offices is carefully monitored with ambitious reduction targets All of our suppliers are surveyed for sustainable practices even our shop furniture off-cuts are used for heating Ladbrokes is a member of the Carbon Disclosure Project, the gold standard of carbon reporting

6 Your Local Ladbrokes Shop The number of betting shops has nearly halved since the 1970s and remained relatively stable since 2005 Economic viability and demand are the key factors influencing shop location 81% of our new shops open in vacant units, providing much needed revenue to local councils to reinvest in the area and increasing vitality Non-retail shops such as bookmakers increase footfall and generate economic revenue for other local retail shops and facilities A new shop can generate over 200,000 of local investment in addition to 11,000 per year in business rates Each shop employs an average of six members of staff and offer flexible working hours ideal for single parents and students More than half of our retail workforce and 58% of our Shop Managers and Deputy Managers are female Nearly half of our staff have worked for Ladbrokes for more than five years, whilst over 12% stay with the company for more than 15 years Many of our company directors started work in our shops Betting shops like many other business are the victims, not the cause of crime We are trialling schemes to site cigarette bins outside our shops to help minimise litter The betting office would increase footfall in the vicinity and sustain retail activity in the town centre through linked trips to shops and other outlets DCLG Planning Inspector

7 Q: Don t betting companies make a massive amount of money? A: Betting is a relatively low margin business. On average in some popular markets, for every 10 bet placed, nearly 9 goes back to the customer in winnings. From the remaining 1, we have to cover all our costs, salaries and taxes. In some cases, as little as 17p in profit remains from the initial 10. Other overheads and costs 24p Staff Salaries 28p Horseracing Levy 10p Bookmakers Profit 12p Gross Profits Tax 15p TV and Media Costs 11p Coins Pie_1.indd 1 10/09/ :08 Q: Don t betting companies take money from the community and give nothing back in return? A: Many betting shops act as community hubs offering a place for people to meet and socialise, and are entrenched in local community activity. The Ladbrokes in the Community Charitable Trust (LICCT) has donated 6.2m to local and national good causes since 2003 and continues to encourage applications from all charities. All of our shops regularly participate in fundraising events on behalf of local causes. We are also an official partner of Crimestoppers and have funded Neighbourhood Watch initiatives. Nationally, the betting industry contributes 6 billion to the UK economy and also helps to support the horseracing and greyhound racing industries via levies of 10.75% and 6% of profits on their bets respectively. Q: Aren t betting shops proliferating on our high streets, forcing other shops out? Should we restrict their numbers? Ten Pound Stake on Horse 17p remains after customer payouts, taxes and costs A: No, betting shop numbers have almost halved since the mid-1970s and have remained relatively stable since the introduction of the Gambling Act. The Act also removed the demand test, allowing shops to relocate in areas of high demand, potentially creating the illusion of proliferation. 81% of new Ladbrokes shops are opened in empty units. The presence of betting shops does not influence the presence of other shops on the high street and in many cases helps to provide a more varied range Coins Bar_4.indd 1 09/09/ :05

8 of facilities, adding vibrancy and increasing footfall to the general area. The number and location of any type of shop or facility is a market-led process governed by supply-and-demand, the planning system strictly permits it to play a role in decision making. Q: Do betting companies target deprived communities and exploit those least able to afford to bet? A: No, economic viability is the only factor influencing shop location. The areas with most demand tend to be those with high footfall such as on main roads and near transport connections, which can also sometimes correlate with high density/low cost residential areas. According to the Gambling Commission s Prevalence Study 2010 those with the lowest income have the lowest prevalence of gambling and took part in fewer activities, whilst those in paid work are more likely to gamble than the unemployed. Gambling prevalence is lowest among the youngest (16-24) and oldest (75+) age groups, whilst single people are the least likely to gamble of any marital status. White British people are also more likely to gamble than ethnic minorities. Q: Are betting shops magnets for crime or unsafe places to work? A: It is important to remember that betting shops are the victims, not the cause of crime. Safety and security is a priority for Ladbrokes and it has invested millions in crime prevention to maximise the safety and security of customers and staff. We have won a Home Office Award for our scheme which lowered related crime in London by 46%. We are also one of the only bookmakers to have Primary Authority Status (via Liverpool City Council), illustrating our reputation as a trusted bookmaker with effective policies. We operate a 24-hour manned security room which can monitor real-time CCTV footage in every shop throughout the UK. All of our shops have emergency alarms behind the counter and many have magnetic door locks, allowing staff to control access into the shop. The Metropolitan Police present Ladbrokes as an example of best practice within the industry. We are also official partners of Crimestoppers, part of the Safebet Alliance, and we work with several local Neighbourhood Watch organisations. Q: Betting is a vice shouldn t it be taxed more heavily? A: Moral arguments aside, because tax is paid by the operator on profits, increasing tax would have no impact on consumer behaviour. Betting and gaming within the UK is already a very heavily taxed and regulated industry, which enables largely unregulated and lower taxed operators offshore to attract customers away from traditional bookmakers towards their online markets. This not only loses the Treasury money but also has an impact in the potential closure of shops and loss of jobs within the UK.

9 Q: But Ladbrokes is offshore too isn t it? Should betting companies be forced to remain within the UK? A: Ladbrokes was forced to move its egaming to Gibraltar in November 2009, due to the increased competition from offshore rivals that have a significant tax and regulatory advantage. Our telephone business, head office and over 2,100 shops still remain within the UK. We support the concept of a better regulatory framework for offshore operators, as they currently have significant advantages over traditional UK-based betting companies. However, it is essential that the framework is enforceable and does not merely add another cost to the most responsible operators. Q: Are some gaming machines responsible for causing problem gambling? Shouldn t they be restricted? A: The Gambling Prevalence Study 2012 stated that there is no evidence of a causal link between gaming machines and problem gambling. The percentage of problem gamblers using gaming machines in the past year declined by 2.4% between 2007 and These machines are already restricted - only four are allowed in each shop; B2 machines are limited to a 100 stake and 500 payout, whilst B3 machines are limited to a 2 stake. Although there are maximum limits, customers tend to set their own levels - for example the average stake on B2 machines is just over 16. There is also a limit on the speed of play to discourage players from inserting money rapidly and without consideration. Whilst the value of stakes and payouts may seem high at initial glance, there is of course nothing to prevent a customer placing the same money (or more) on a sports bet or on any online games. In some shops, these machines can be responsible for 40-50% of their profit, so curtailing them would inevitably lead to shop closures and job losses. Q: Do bookmakers do enough to prevent problem gambling? A: Ladbrokes believes that bookmakers have a responsibility to assist people wherever they can if they are displaying evidence of problem gambling behaviour. Indeed it is part of the Gambling Commission s Licence Conditions and Code of Practice that it does so. Ladbrokes is a founder member of the Gambling Research, Education and Treatment Foundation (GREaT Foundation) and is one of the biggest funders of problem gambling charities including Gamcare. All of our shop staff are trained to recognise problem gambling behaviour and to intervene and offer assistance to customers. Tools such as self-exclusion, counselling or selfimposed limits are all offered to assist customers in dealing with a gambling problem. Gamcare information leaflets are also available in all of our shops. Q: Do bookmakers adequately prevent under-age gambling? A: We take this issue very seriously, not least because individual members of staff can be subjected to prosecution for failing to enforce this adequately

10 and bookmakers can be fined or even lose licences. Ladbrokes makes a substantial investment in staff training and enforcement of the Think 21 policy and has a strong record in this area. Q: What time do bookmakers open and close? A: The majority of our shops open at 9am, as do most shops on the high street. Country-wide, we have only four shops that open at 7am and five that open at 7:30am, all located within minutes of major national railway stations where there is considerable footfall at an earlier time of day. Most of our shops close at 9-10pm, which allows our customers to bet on and watch evening sporting events such as European football matches and evening horse and dog races. Q: Do Local Authorities have the power to oppose new betting shops? A: Like any shop or facility, betting shops have to undergo the planning application process and be granted permission by the Local Authority (usually via its Planning Committee) for any new shop unit or change of use. Betting shops also require a premises license to be granted by the Local Authority. Councillors and stakeholders such as local residents and businesses can raise issues and objections at any point during these processes and the Local Authority can reject applications for a variety of reasons as set out in national planning guidelines and by the Gambling Commission. The objections do have to be legitimate and cannot be based on arguments about theoretical demand, which is an issue for the market to resolve, as is the case with all other forms of business. Since the Gambling Act 2005 there has been no artificial constraints imposed on the location of betting shops in relation to one another, meaning that shops are better able to respond to customer demand and footfall patterns. Q: Don t betting shops only provide low skilled and low paid jobs? A: Betting shops provide a large number of very important jobs to local communities and many people who lack opportunities. Whilst they do not require academic qualifications to get, they do require skill within the job for example there is a significant amount of mathematics required and they also enhance transferrable skills such as money handling and dealing with customers. We also provide a large amount of on-thejob training and excellent prospects of progression, which is illustrated by our high staff retention rate. Indeed, several of Ladbrokes Directors began their careers in our shops and worked their way up. In January 2012 Ladbrokes provided pay rises for all its retail staff for the first time in two years, lifting the base rate significantly above the minimum wage.