William Hill Plc – Written Evidence (GAM0084)
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William Hill Plc – Written evidence (GAM0084) Introduction William Hill is a member of the Betting and Gaming Council, a new industry body that represents all gambling sectors. The BGC has been created to represent the broader betting and gaming industry and to build on recent progress across the sector, to raise standards in safer gambling and to promote best practice. We fully support their submission to this inquiry and this response is aimed at providing supportive material to it, particularly around questions 1 to 6. William Hill has a long-term ambition that nobody is harmed by gambling and is committed to collaborating with all stakeholders including competitors, academics, public representatives and the regulator to address gambling related harm and ensure a safer experience for all our customers. Progress in this area is key to ensuring the sustainability of our business and is a key pillar of our overall business strategy. We have made significant advances in recent years in safer gambling processes, including the use of algorithmic tracking to identify at risk players, earlier this year we launched a new safer gambling algorithm that tracks play and flags potentially at risk customers. The new algorithm includes behavioural changes such as moving from a debit card to a credit card, as well as patterns of play, including markers of harm. When players are flagged their account is reviewed, background information sought and customers contacted with actions including source of income checks, voluntary or enforced deposit limits, partial self- exclusion, self-exclusion or ultimately account closure. Working with other leading companies who are also members of the Betting and Gaming Council, William Hill has played a leading role in the adoption of restrictions around gambling advertising during live sport, as well as making a commitment to provision of £100m of funding for problem gambling treatment over the next four years. This illustrates the willingness of the industry to act positively in addressing areas of need, whilst recognising there is still more to do, to ensure the sustainability of an industry, and at the same time ensuring the promotion of player safety across the gambling sector and other industries. Since 2014, the vast majority of gambling activity in the UK takes place in an environment that is regulated and licensed by the Gambling Commission, with the responsibilities that brings to operators around crime prevention, player protection and customer fairness. William Hill believes the best way to advance safer gambling is to build on the significant recent progress made by many operators by further increasing standards and best practices that can be adopted into regulatory codes and licence conditions. This will ensure the industry, working with the regulator, Government and stakeholders, can keep pace with technological developments and strike the right balance between consumer safety and consumer choice. Further, unregulated sites are very easy to access online, we believe there are risks, that need to be considered, around severe regulatory restrictions on spend and stake, that will benefit unregulated sites, and we believe these risks are significant. The potential unintended consequence of players being driven into unregulated and unlicensed operators is one that is already evidenced in numerous other markets – many of whom are moving to reduce taxation and regulatory restrictions for just this reason, with the United States being the most recent example. 1. Introduction to William Hill Based in London and Leeds, William Hill is one of the leading multi-channel betting and gaming companies in the UK – with around 26% of the retail market by number of shops and a full range of digital services available online at www.williamhill.com and by mobile app. The company is also licensed in Italy, Spain and Sweden and is expanding into the United States following the Supreme Court ruling in May 2018 to overturn the federal ban on states introducing regulated sports betting. Currently 14,000 of William Hill’s 16,000 employees are based in the UK – mainly in betting shops with significant concentrations of employment at its headquarters in London and Leeds. Over the last ten years, the Group has seen good revenue growth from the advent of mobile betting in the UK and elsewhere but this has been offset by c£300m of additional tax costs and regulatory measures in the UK. As a result, Group profit has declined from £278.6m in 2008 to estimated 2019 profit of c£129m1. 2. Upholding the licencing objectives There are three licensing principles that underpin the 2005 Gambling Act: Preventing Gambling from being a source of crime and disorder, or being used to support crime Ensuring Gambling is conducted in a fair and open way Protecting children and other vulnerable persons from being harmed or exploited by gambling Operators like William Hill are subject to detailed Licence Conditions and Codes of Practice (LCCP) and are subject to regular assessments by the Gambling Commission. The 2005 Act grants extensive powers to the Secretary of State and the Gambling Commission to use the LCCP to amend or strengthen regulation in response to changes in technology or evidence around the impact of gambling on society. With over 2,500 operators targeting the UK, the market is extremely competitive and complex – posing significant challenges for the regulator given the fast-changing nature of the industry. For this reason, William Hill is committed to working with all stakeholders to evolve regulation on an ongoing basis and to collaborate with stakeholders and competitors to set best practice standards, which can then be adopted by the Commission in the form of updated LCCP requirements on all operators. 2.1 Preventing gambling from being a source of crime and disorder Crime Prevention William Hill takes crime prevention extremely seriously and devotes considerable people and financial resources to this area. In retail as well as adopting rigorous processes and safe working practices the company has invested in high definition CCTV in all shops, the adoption of safe havens across the estate and the use of StaffSafe – a monitoring and intervention system to protect 1 https://www.williamhillplc.com/investors/analysts-consensus/consensus/2019/ colleagues in shops. It has a security team of 74 people led by a former Chief Inspector of police who is Group Director of Security and Community Affairs. Betting shops can be a target of crime, in part because they are a cash-based environment. Over the last decade, we have materially reduced the level of crime associated with William Hill betting shops by investing in strong security systems and processes, focused on protecting the safety of our colleagues and customers. Between 2008 and 2018, the number of robberies annually from William Hill LBOs reduced 74% to 87, burglaries reduced 72% to 51 and cash-in-transit incidents reduced 69% to eight. The company plays an active role in the communities where its shops are located – whether working together with local authorities and police forces on BetWatch schemes or through supporting Business Improvement Districts in over 100 High Streets to address issues of local concern including crime prevention in conjunction with the wider business community. We are proud of our role in local communities across the UK. Anti-Money Laundering William Hill is an active member of the Gambling Anti-Money Laundering Group which has adopted best practice guidelines on anti-money laundering. The online business is subject to the 4th EU Anti Money Laundering Directive and in the UK we also adhere to the Proceeds of Crime Act 2002. We have dedicated risk management teams employing 74 people full time in monitoring and investigating suspicious activities in Online and in Retail. Where relevant Suspicious Activity Reports (SARs) are filed and in 2018 we submitted 687 SARs either to the National Crime Agency (NCA) or Gibraltar Financial Intelligence Unit (FIU) and received 379 law enforcement or financial institution enquiries that required investigation. We believe these numbers illustrate our rigorous approach and ongoing diligence in this area, the total numbers are extremely small, when set against our large customer base of over 2 million people. We use ‘Know Your Customer’ and ‘Enhanced Due Diligence’ checks against customers depositing more than €2,000 in a given year. In addition to these checks we run source of funds/wealth check on customers with high deposit levels. Moving forward we are adopting further affordability checks based on publicly available income data. In 2018 we submitted 687 SARs to either the NCA or FIU. In 2018 we received 379 law enforcement or financial institution enquiries that required investigation. While these illustrate our ongoing diligence, the number is very small compared to the total base of SARS submitted to the NCA as a whole, representing just 0.1%. Upholding the integrity of sport The company is also committed to supporting sports integrity and is an active member of the International Betting Integrity Association which provides a forum for sharing data on suspicious betting patterns and reporting on them publicly. We also have a number of memoranda of understanding (MOUs) with sports governing bodies where we will work closely in sharing information and best practice on sports integrity issues relating to betting. William Hill is also an active member of the Sports Betting Integrity Forum established by the Government and the Gambling Commission in 2012 to develop Britain’s approach to protecting sports from being corrupted in the run up to the London Olympics. This led to the Sports Betting Integrity Action Plan. As a result of these activities William Hill’s security team has been recognised three times in the national security industry awards and in 2017 was named Security Team of the Year at the Outstanding Security Performance Awards in 2017.