Q & A: Andy Clifton

5 March 2001
As one of the world’s largest betting companies, Hilton Group plc’s Ladbrokes betting division has taken its business to the Internet seemingly without losing a step. Considering that the group has successfully brought its sports betting brand to new customers online, expanded its horizons by launching an Internet casino and, most recently, formed a heavyweight partnership with Playboy Online, the new world of e-business and virtual betting for Ladbrokes appears to be a walk in the park. Andy Clifton, the head of communication for the company's eGaming division, admits, however, that the transition presented a number of challenges. A few weeks agon, IGN caught up with Clifton to discuss some of these challenges as well as his views on trends shaping the British gaming industry and a number of other e-gaming issues.

IGN: What sites do you offer? There’s Ladbrokes.co.uk and Ladbrokes.com. . .

Andy Clifton: Yes, and LadbrokesCasino.com. We used to have a site called bet.co.uk. It was the original site, but it no longer exists.

IGN:What happened to it?

AC: Well, the bet.co.uk customers have transferred to ladbrokes.co.uk. Bet.co.uk was the very first site. It was a change of plan, a change of emphasis. Originally I think that the idea was that people wanted a site that wasn’t necessarily with Ladbrokes. Personally, I can’t think why. So, they came up with the sort of non-threatening name “bet.co.uk.” (Bet.com, unfortunately was owned by the Black Entertainment company.) But the thought process behind that has been changed gradually, and now we’re going with ladbrokes.co.uk and ladbrokes.com.

IGN:How is the Internet betting service going?

AC: We’re in excess of 80,000 customers now. So far, at the last count, I think we’re taking bets from 124 different countries around the world. Obviously that doesn’t include the States, we don’t take any bets from the states.

IGN:Was that to protect your casino business there?

AC: Basically because of the Wire Act in effect, in theory, makes it illegal. A lot of our competitors do take bets from Americans, but because we’re part of an FTSE 100 company and because quite a few of us like going to America on holiday, we don’t want to be arrested at the airport. We don’t knowingly take bets from Americans. If we were to take bets from them, if the legal situation were to change, that would be a massive boost for us.

Even now, it never ceases to amaze we, when we go to the states to play golf or whatever, if we say we work for Ladbrokes, they seem to immediately know who we are. They go, ‘Oh you guys take bets on all kinds of funny things, don’t you.”’

IGN: How many wireless betting customers do you have?

AC: I’m not sure of the number off the top of my head; it’s not vast. It would be thousands rather than tens of thousands. I think our outbound service is pretty good, but it’s really the first step and a means to an end. This is an education process.

The key for when wireless will really take off is when handheld devices or widely used handheld devices are more sophisticated, such that the device will know where you are. So, for example, you’re a soccer fan and we know you always have a bet on Manchester United. If you’re at a Manchester United game, your device will know where you are and we can send you updated betting information or scores from the league. Or maybe there’s a late soccer game kicking off that you might want to have a bet on and we’ll send you information on that as you leave the game, assuming you’ve expressed a desire to receive that.

I would imagine that in maybe a couple years, we’d be in the situation where you can dial up on your device, have a bet on a horse race and watch the race on your device. That would open up a lot of possibilities.

IGN:How many customers do you have on your interactive TV betting sites?

AC: I don’t know off the top of my head. It’s something that’s growing. It’s small rather than large. Again, it’ll be thousands rather than tens of thousands.

IGN: And how is your Internet casino doing?

AC: It’s going very well. We’re very pleased with it. Originally you could download the casino from the site. Recently we’ve been sending out thousands and thousands of CDs. But, yeah it’s going well, very well.

IGN: And how many casino players do you have?

AC: We’re not revealing that information. It’s fair to say that it’s exceeding our expectations.

IGN: What languages are available for the casino?

AC: Just English now, but there are plans to change that.

IGN:What about the software? While Microgaming provided the front end, who did the back end?

AC: We use the same back end as our other websites; we use Orbis. One of the reasons we did that was to make it easier for our Ladbrokes.com customers to become LadbrokesCasino.com customers. That’s kind of our dream for Ladbrokes.com-- for it to be the betting and gaming portal on the Internet. Of course, everyone wants the same thing. We’ve got a casino on there, we’ve got some fancy football games. . . We try to get as much information on the site, in terms of statistics and in terms of news. And we have deals with Teamtalk, and Soccernet, which is part of ESPN, just to get more information on there to help people out. They can still visit the site and make it worthwhile and they can enjoy it without having to make a bet. But, at the same time, make it as easy as possible to learn how to bet if they want to. There are some site designs you see, and even some of our early site designs that if you visited the site and knew what you wanted to bet on, it might take you seven or eight clicks to get there. Whereas now it would take you two or three.

IGN: The betting duty announcement is coming up, and it’s been suggested that the government will ask companies that have gone offshore to come back to Britain. Will Ladbrokes do that?

AC: We don't know exactly what the government is planning to do. But, as I understand it, one of the key conditions for Customs and Excise introducing a tax on profits style of betting duty is to make it a condition that the bigger firms repatriate their offshore businesses.

So, it may well be that we wouldn’t have a choice. I mean, of course, we’d have a choice, but in order to comply with what the government decreed then we’d have to bring our offshore business back onshore. And in theory, from a business point of view, it would make sense to do that because of scale and having all of our betting operations in the same place. That would far outweigh the advantages of being totally tax-free elsewhere.

Even in Gibraltar, of course, there are elements we have to play, in terms of corporation types of tax. It would definitely make sense to have our operations concentrated over here.

But, it would also be a massive boost for betting shops in the U.K., as well. There are around 8,000 betting shops in the U.K. at the moment. Fifteen years ago there were probably 15,000 or 17,000 betting shops in the U.K. The thing that really hit the betting shops was the introduction of the National Lottery six or seven years ago. In the short term, it forced a lot of betting shops to close. It caused a massive turndown in their profits and cost a lot of people their jobs. I think that looking at the bigger picture and looking long term, what it’s done, it’s brought the weekly activity of having a flutter and made it more acceptable.

Even two or three years ago, if you asked people if they bet, they’d say, “No but I do play the lottery every week.” And people would try to convince you that the only reason they were playing the lottery was to help the good causes.

So, having a bet is perceived as much more socially acceptable than ever before. And that’s reflected in legislation that allows betting shops to be more open and welcoming places, where before they used to be frankly pretty horrible. They weren’t allowed to be nice, because the government didn’t want to encourage people to bet.

IGN:The Gambling Review Body is due to release its report this summer, and depending upon who you talk to, it sounds like there could be some pretty sweeping changes to gambling policy in the United Kingdom. What do you see happening and how will it affect your company, especially the Internet services?

AC: I think it’s too early to say. It’s good news, because it will enable us to bring the whole industry up to date. I’ve got no idea what might be in there, but I’m sure there will be some good things for us and some not-so-good things for us. The last piece of gambling legislation in this country was the Betting, Gambling and Lotteries Act 1963. Certainly in terms of legislation, that really affects us. So, we try to operate within the constraints of a piece of legislation that’s 40 years old, which was just about workable until about four or five years ago. But now, with the Internet, interactive TV and wireless--particularly with the Internet and wireless, which have really no boundaries (as we’ve said already, we’ve got customers in over 100 countries)--trying to legislate for that is pretty difficult.

One of the other things that’s happening at the same time is reviewing the whole levy system which bookmakers and betting customers pay to the racing industry. That’s an integral of that as well. The government has expressed a desire that the Levy Board, who collect that levy and distribute it to the racecourses and the race industry, will not need to exist. Because whatever replaces it, the money will go straight to racing and racing will be able to redistribute it itself and be leaner, more efficient. We’ll wait and see.

I think it’s too early to say what it’ll mean to us, but the whole industry will probably make more sense in terms of the legislative framework.

IGN: One of the items on the agenda for the Gambling Review is the consideration of letting online casinos operate from the U.K. Especially since Ladbrokes might bring its offshore betting services back to the U.K. because of the betting duty situation, you would probably want to operate your Internet casino here if possible, I would assume.

AC: Yeah, it would make sense to do that. If we could concentrate all of our businesses in one area and not be any worse off, then it would make sense to do that. But, we have to be careful not to completely burn our bridges, in case we should suffer any reversal of fortune, so to speak.

IGN:What does the future hold for Ladbrokes?

AC: We’re obviously trying to be as big and successful as we can. I think the way we can do that is to grow our brand and our customer base internationally. Quite a high proportion of our customers at the moment are from the U.K., a relatively high number are from the Far East. Outside of those two centers, there’s just sort of customers dotted around here and there. We’re still talking about relatively large numbers in the grand scheme of things. If you take the U.K., there must come a point of saturation level, whereby the majority of people who want to take a bet will already be your customer or somebody else’s customer. With the Internet, a lot of people who are serious about having a bet will have accounts with everybody, which is why, on the Internet, it’s somewhat harder than with traditional betting to make a profit.

Vicky Nolan joined the IGN staff in October 1999. She's best known for inventing fire, the wheel and swiss cheese. She can be reached at vicky@igamingnews.com.