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. The awards recognised the team’s approach across both retail and online.
2.2 Ensuring Gambling is Conducted in a Fair and Open Way
Marketing In addition to complying with the Advertising Standards Authority’s Codes of Advertising Practice2 and Broadcast Codes of Advertising Practice3 in relation to gambling, we have taken significant voluntary action to respond to public concerns about gambling advertising. We adhere to the Industry Code for Socially Responsible Advertising4, which was most recently updated to implement the voluntary whistle-to-whistle ban on advertising around live sports before the 9 pm watershed.
Under the ABB’s Responsible Gambling Code5, we do not advertise gaming machines in our betting shop windows and 20% of shop window advertising is dedicated to safer gambling messages.
Customer satisfaction We have specialist customer service teams dedicated to shop, telephone and online customers and make available a comprehensive set of rules in LBOs and online that detail the terms and conditions under which all transactions placed with William Hill are accepted. We regularly measure the quality of our service performance customer satisfaction (CSAT) and net promoter scores (NPS) surveys (which measure whether a customer would recommend your services) and we have seen significant improvements in these areas with customer satisfaction up 33% year on year at a record high of 8.1.
2 https://www.asa.org.uk/asset/6E35DA0A-C47F-4AB8-9767E4E7635BFEC9/ 3 https://www.asa.org.uk/asset/343D6082-F5F7-4E4B-98765C8B5E349879/ 4 http://igrg.org.uk/wp/wp-content/uploads/2019/01/Gambling-Industry-Code-for-Socially- Responsible-Advertising-5th-Edition.pdf 5 http://abb.uk.com/wp-content/uploads/2015/10/Responsible-Gambling-Code-2015.pdf Online, we have seen an increase in our NPS of 42% since January 2019 to an NPS of 18 (a positive NPS score is considered “good” as the range is from -100 to 100). Further evidence of positive customer experience can be illustrated by significant reductions in contacts to customer services and improved customer retention (up 3% year on year). In Retail, NPS has been measured since 2011 and shows a consistently high rating of 58.5% Alternative dispute resolution services We want customers to feel they are treated fairly and openly, and endeavour to resolve all betting disputes in a clear and equitable manner. When a customer disagrees with our decision, they can refer to the Independent Betting Adjudication Service. In 2018, 331 cases were raised with IBAS in relation to William Hill; of these, in only four cases was our original decision overturned. This level has not materially changed over the years: in 2013, for instance, 453 cases were raised and five were overturned. 2.3 Protecting Children from Harm or being exploited by gambling
William Hill is an adult leisure brand, and we are fully committed to ensuring that we prevent under-18s from gambling. We devote significant resources to minimise any risk of accepting bets from minors as well as adopting clear policies around age gating on social media. We are committed to working with other members of the Betting and Gaming Council to continually evolve the industry’s approach in this area. We continue to invest significantly in best practice in this area, we are open to new and innovative ways to do this, and seek to collaborate with social media companies to understand what more we can do together to protect children and young people online. ‘Think 21’ in Retail In our betting shops, we have adopted ‘Think 21’ under which our colleagues are required to seek proof of age from any customer who appears to be under 21 and to ask customers to leave if they are unable to provide that proof. Every shop undergoes independent age verification tests and William Hill has a high pass rate of 89% - which compares favourably with those in other age restricted products. New AV Checks in Online In the digital business new age verification procedures were introduced in May 2019 meaning all customers are AV checked on registration resulting in a doubling of checks conducted annually. Supporting advertising codes and age gating social content We have established clear processes with the aim of ensuring that all our advertising content is compliant with ASA CAP codes and does not appeal to children and have strengthened controls regarding affiliates in this area. All our content is labelled 18+ and includes BeGambleAware messaging and all advertising is age gated on social platforms. We support enhanced standards of age gating and the BGC is engaging with platform providers to explore how these can be strengthened across all social media outlets.
Voluntary “Whistle to Whistle” advertising ban We are very aware of concerns that gambling advertising on TV prior to the watershed is exposing young people to a high volume of gambling adverts and also note the disquiet around the tone of these adverts. For this reason, we worked with other leading betting companies to agree a voluntary ‘whistle-to- whistle’ ban on our adverts around live sports events prior to 9 pm, which has now been enshrined in the IGRG’s Code for Socially Responsible Advertising. Shirt Sponsorship William Hill has also voluntarily committed that we will not sponsor football shirts of UK clubs. We have a focus on supporting sports that do not attract broad commercial support such as cricket, darts and boxing to reach our target audience and believe this decreases the risk of the kind of proliferation we have seen around football.
‘Loot boxes’ in gaming – a pathway to gambling ‘ There are clear issues regarding potential grey areas around gambling like ‘loot boxes’ in gaming where we do believe further regulation should be considered, as there is potential for children to be introduced to gambling via these in-game features.
2.4 To protect other vulnerable persons from being harmed or exploited by gambling
Regular gamblers support gambling safeguards
Recent research by YouGov - published in the City AM (September 2019) showed that most regular gamblers believe the introduction of gambling safeguards were a good thing (74%), only 8% believed the responsibility for stopping people placing bets they can’t afford lies with the Government.
Actions to tackle problem gambling
William Hill wants gambling to be a fun part of people’s spare time, which adds to the excitement of the sports they love. We recognise that according to the National Health Survey 430,000 people in the UK are classified as problem gamblers we are focussed on four crucial areas through which we can tackle problem gambling and protect those who are at risk of harm from gambling: i. Supporting all customers to stay in control through how we design and market our products
Deposit limits: customers can limit the amount of money they can deposit into their online account within a 24-hour, weekly or monthly period. Time and spend limits on gaming machines: gambling customers in our LBOs must choose whether to set a time and/or spend limit before they start playing.
Account restriction: customers can block access to any of our gaming products online.
Session time reminders: customers can start the clock on their activities within our major gaming products online; gaming customers in our LBOs are subject to pop-ups for every £150 or 20 mins, with corresponding alerts behind the counter so staff can interact if needed.
Time out: customers wanting to block their online account access for a short period can use the time-out tool, enabling them to close their account for any time between one day and six weeks. During that period we will not send them any marketing material or promotional offers.
Self-exclusion: if a customer wants to stop themselves from gambling completely, self-exclusion is available. We will close any William Hill accounts they hold for their chosen time period, between six months and five years. An account would only be re-opened after the end of that period at the express request of the customer, after a conversation with our Customer Service team and a 24-hour ‘cooling off’ period. No marketing communications are sent to self-excluded customers.
Gambling support information: there is a range of gambling support and responsible gambling information available in our shops and on our website. ii. Creating new ways to identify people at risk and intervene effectively through new technology, partnering with banks and technology companies and the expertise of our frontline colleagues
Algorithmic tracking: We have implemented algorithms designed to identify risky or problematic behaviour so it can be acted on by the relevant teams, both across our account based gaming customers in retail and all online accounts. These algorithms identify at-risk customers based on not only time and money spent but changes in these trends over time and also key behavioural indicators.
We interact or intervene with identified customers using a range of methods from emails and push notifications to personal interactions. In 2018, we undertook around 70,000 automated responsible gambling interactions (RGIs) and almost 37,000 inter-personal RGIs across our online business.
Actions typically include encouraging or requiring customers to set deposit limits, requiring source of funds and income checks to be provided but also include switching customers off where we may not have enough evidence of their ability to afford their level of gambling or if we believe they may have a gambling problem.
Staff Training: All staff are trained in responsible gambling and the indicators to look out for. Our safer gambling and customer handling teams receive special training and also instigate RGIs with customers identified as at risk. In Retail, we have significant visibility of real time customer behaviour in particular, and in 2018 our shop colleagues undertook around 42,000 RGIs in our betting shops. We are committed to continually improving the quality of our interactions and have worked closely with Betknowmore, a specialist problem gambling support organisation whose own lived experience gives them a unique perspective on how we can provide better support, to update the written guidance available to colleagues in shop on conducting RGIs.
Identifying Markers of Harm: We have also contributed to a project led by the Senet Group, working with other major operators, to identify and validate a core set of behavioural ‘markers of harm’. The intention, once the project is complete, is to share these publicly so that they can be adopted more widely inside the industry and applied in relevant adjacent sectors, such as financial services. iii. strengthening the system of support for those who do experience harm Self-exclusion: This is a critical tool for a customer who wants to block themselves from gambling. In recent years, we have implemented cross- operator systems in both the betting shops and online to further increase the effectiveness of self-exclusion. MOSES6 (Multi-Operator Self-Exclusion Scheme) enables a customer wanting to exclude from seven or more betting shops to do so through a single centralised process and the telephone support teams tailor the exclusion to the individual’s needs. In addition, William Hill has adopted a new tablet-based in-shop process that makes it clearer and easier for customers to self-exclude, reducing this friction point for customers experiencing harm at a critical point for their well- being. The first phase of the UK’s national online self-exclusion scheme, GAMSTOP7, is now live and William Hill has provided this service to customers since June 2018. Online customers are able to go through a single self-exclusion process to suspend their online accounts across those operators that have signed up so far. Ultimately, all licensed UK online operators will be required by the Gambling Commission to be part of the system. In 2018, Online registered c67,000 account self-exclusions, with a significant increase seen as a result of joining GAMSTOP. iv. Empowering our colleagues with the understanding and skills to make a difference Annual Training: All colleagues undertake annual training around our compliance and safer gambling activities, and frontline and specialist colleagues have enhanced training programmes, informed by experts in problem gambling. In September 2019, we initiated a new ‘Get Out There’ programme for a proportion of our talent pool. This is intended to expose our next generation of
6 https://self-exclusion.co.uk/ 7 https://www.gamstop.co.uk/ leaders by working on projects defined by problem gambling support and education charities, thereby building the right culture for the long term.
Collaborating with stakeholders: In November 2018, 20 of our most senior colleagues joined with 80 experts in problem gambling at an event to discuss key issues around safer gambling and to identify new solutions. This drew on expertise from a wide range of areas, including other companies, charities treating problem gamblers, legislators and regulators, adjacent industries such as financial services, technology innovators and community support agencies, as well as those with lived experience. The output from this event has been published8,9 to make the insight available for all, and key measures are being implemented by William Hill.
3.0 Social and Economic Benefits of Gambling
William Hill supports the explanation of the positive contribution of the sector to gambling in the UK provided in the submission by the Betting and Gaming Council. We believe a well-regulated gambling sector provides significant social benefit, as described above, in terms of ensuring gamblers are treated fairly, preventing gambling from being a source of criminal activity or funding for criminal organisations, ensuring under 18s do not access gambling, encouraging control measures among all customers and protecting those who are experiencing harm.
Revenue and tax contribution William Hill generated revenue of £1.4 billion from our UK operations. The company paid £281m in gambling duties (General Betting Duty, Machine Games Duty, Remote Gaming Duty) and corporation tax. In addition to this the company paid £47 m irrecoverable VAT, £23 million in business rates and £20 million in employer NI and payroll costs. Its total contribution to the exchequer in the UK is therefore £371 million. Employment impact Employment: William Hill currently employs c16,000 people globally with 14,000 people in the UK. The cost of employing, rewarding, training and developing people, including employee taxes paid by the company, was £268m. Compliance and safer gambling On compliance and customer protection measures, we spent c£5m, including £1.3m to support research, education and treatment activities – from 2019 we have committed to significantly increase this as part of an initiative with four other leading companies in the industry. Under this initiative up to £100 million
8 https://www.williamhillplc.com/nobody-harmed/collaboration-towards-solutions/ 9 https://www.williamhillplc.com/media/13042/wh_nobody_harmed_final-1.pdf per annum will be made available for treatment provision over the next four years. Shop rentals The cost of renting LBO-related properties from landlords in 2018 was c£53m. Contribution to sport £85m went towards the horse racing and greyhound racing industries in the form of levies circa £65m on content payments for the provision of televised racing and sports as well as the relevant data online and in retail. A further £9m went on sports-related sponsorships. Interest payments to UK Banks and shareholder dividends We paid £36m in interest payments, predominantly to UK banks. William Hill paid £114m in dividends to our shareholders. Capital investment In cash terms we invested £117.5m in capital projects, of which c£84m was to support to maintenance and development of the Retail and Online businesses; and IT.
Community contribution Links to sport: Racing and betting have always been intrinsically linked and the sustainability of the horseracing and greyhound industries is important to us. In 2018, we provided £20.3m in levies as direct support, and also paid £96.9m for the right to broadcast live sports events in our shops and online, much of which flows back through to the race tracks that hold the events. We support boxing at the grass roots level – as sponsors of the Haringey Box Cup, Europe’s largest amateur boxing event – through to the highest level, with Anthony Joshua, one of our William Hill ambassadors. We support darts, through our sponsorship of the PDC World Championships. Furthermore, our betting partnerships with Tottenham Hotspur, Chelsea and Everton football clubs have led to wider projects, supported by us, in their respective local communities. Supporting our colleagues: Assisting our people in good times and bad – is a core part of our community ethos. In addition to the Employee Assistance Programme, available to colleagues, through the William Hill Foundation, we provide a hardship fund that any colleague can access. The fund provided 13 grants in 2018, totalling £24,646. We also matched colleagues’ fundraising efforts for charities and community initiatives to the tune of £42,594. Volunteering: As part of our Close to HOME community commitment over the last four years, we have supported our colleagues in giving their time and skills to make a positive difference in their local communities. In 2018, colleagues themselves volunteered 6,905 hours to support ‘Close to HOME’ projects, bringing the total to more than 20,000 hours since the programme was launched in 2015. Charitable partnerships: Our corporate level partnerships with other charities have focused on three key areas: creating opportunities through sport; promoting skills and opportunity; and improving the local environment. In 2018 we partnered with the Tottenham Hotspur Foundation, Chelsea Foundation and the social enterprise ‘Our Club’ to deliver bespoke work experience programmes. These programmes offer candidates workshops that build confidence and employability skills as well as a two-week work experience period at the company, with a final interview at the end of the programme for a job at William Hill. Through these programmes 160 people have found work with William Hill since 2015. For the third year running, we sponsored and took part in ‘Football Shirt Friday’, a campaign run by the Bobby Moore Fund, which took place on 27 April 2018. We raised over £28,000 for the Bobby Moore Fund, bringing our total contribution to the charity in sponsorship and fundraising to over £250,000. This amount is helping to fund a significant piece of psychological research to help increase uptake in a national bowel cancer screening programme. We ran a partnership in Scotland with Prostate Cancer UK to raise awareness and funds for the charity. In total, the partnership raised £25,000 for Prostate Cancer UK, which we presented to the charity at our UK Excellence Awards at Ayr Racecourse. In 2018, for the third year running, we continued our support for the Scottish Football Association’s (SFA) ‘Support within Sport’ programme. The programme looks to support those in the game who may be suffering from mental health concerns, by providing a confidential helpline to discuss any issues, and offer follow-up specialist treatment to those who make contact with the service. As the main official supporter of the Haringey Box Cup, the largest international amateur boxing competition, we help provide an opportunity to young boxers from across the world to compete in the three-day annual event at Alexandra Palace. This was the fourth year William Hill had sponsored the event.
Charitable Foundation: The William Hill Foundation The William Hill Foundation was established in 2011 to administer the hardship fund for colleagues and other charity programmes, the first of which was the five-year Project Africa, which ran from 2012 to 2017. In 2019, the Foundation was relaunched with a new and expanded focus on mental well-being. Mental health is a major issue that touches all our lives. In the Foundation’s first partnership in this space, we are working with The Alzheimer’s Society, which focuses on the leading cause of dementia in the UK. In a ground-breaking three- year partnership – the first of its kind in the gambling sector – we will raise awareness, fundraise in support of significant advances in treatment and draw on the charity’s expertise to help us improve mental well-being across William Hill’s customers, colleagues and communities. Environmental Impact William Hill’s environmental impact is not significant compared to other businesses as our products are essentially virtual. Our carbon footprint largely relates to the amount of electricity we consume in our shops and offices, and we are focused on continuous improvement in this area. Since 2013, we have used an intensity measure – tonnes of CO2 equivalent per £1m of net revenue – to track our performance. Between 2013 and 2018, we reduced this by 22% from 38.67 to 30.29. In 2018, we reduced our carbon footprint (as measured by CO2 emissions) by 23%, principally as a result of investing in LED lighting in our shops. We report an emissions figure based on tonnes of CO2 equivalent (tCO2e). This includes Scope 1 and Scope 2 emissions, including natural gas consumption, electricity consumption, refrigerant emissions and fuel from company cars. In 2018, we saw a 23% decrease to 31,853 tCO2e. Within this, Scope 1 emissions were 2,225 tCO2e (2017: 2,696 tCO2e) and Scope 2 emissions were 29,355 tCO2e (2017: 38,579 tCO2e).
13 September 2019