The season of Summer sport has well and truly begun. With Royal Ascot recently finished, Euro 2016 gathering pace, and Wimbledon to look forward to, Britain’s bookmakers will be in the spotlight, hoping for strong and profitable trading.
Yet recent media reports highlight the duty of care the betting industry has towards its customers, and the times where this can fall down, sometimes with tragic consequences.
Leading players in the industry have invested in responsible gambling initiatives, such as the Senet Group’s ‘When the fun stops, stop’ campaign.
Ed Coke is Director of Consulting Services of Reputation Institute UK and Ireland. He has over 20 years of research and consulting experience, matched with an outstanding track record of client service and commercial growth.
His wide-ranging knowledge spans the full gamut of key sectors and major reputational issues such as sustainability and trust. With a strong track record in developing and implementing stakeholder research programs for numerous Fortune 500 companies, Ed's leadership has covered the full spectrum of quantitative and qualitative techniques.
Despite this move to demonstrate corporate responsibility, data from the Reputation Institute highlights the weakness of the betting industry’s reputation among the UK General Public. The RepTrak study measures a company’s ability to deliver on stakeholder expectations on a scale of 0-100, and groups companies’ reputations as Excellent (80+), Strong (70-79), Average (60-69), Weak (40-59) or Poor (Below 40).
Overall, the UK betting industry has a vulnerable reputation in the minds of UK General Public. The industry scores 57.4 out of a possible 100 points, placing it significantly below an average performance. This compares unfavourably with such castigated industries as Retail Banking, and many alcoholic drinks companies, which have experienced their own reputational challenges over the years.
Two of the six companies measured performed above industry average: 888 Holdings and William Hill were both perceived to have ‘average’ reputations. The remaining four companies of Ladbrokes, Betfair, Paddy Power and Coral did not fare so well, recording weak reputations.
So, what is driving this poor performance? Firstly, there is little perceived differentiation in the betting sector; four out of the six companies measured have very similar and weak reputations. There is no one stand-out performance to act as a shining light for the industry.
Second, among the seven rational drivers of reputation, the lowest perceptions occur in two of the most important dimensions of company reputation: Citizenship and Governance.
The UK general public rates the betting industry’s performance poorly in terms of being fair, open and transparent in the way it conducts itself, achieving a very limited score of 54.1. The industry’s performance on Citizenship is weaker still, rating 50.8 on perceptions of good corporate citizenship.
Companies such as the recently merged Paddy Power Betfair are particularly poorly regarded, achieving 47.4 and 46.9 on the Citizenship dimension, placing them alongside companies such as Imperial Tobacco and Sports Direct.
Yet Citizenship and Governance are the second and third most important drivers of overall reputation. Collectively, these dimensions influence nearly 30% of a company’s reputation. Currently, these perceptions leave the gambling industry open to further external regulation over which companies have limited influence and control.
So, what can be done? Well a lot in fact, but it takes visionary leaders to understand the scale of positive impact that a gambling company could have on society if it operates in the right way.
First, analyse your potential strengths and weaknesses. This is where the RepTrak model can support a clear appreciation of reputational capital, and what it takes for a company to shift the dial in a positive direction.
Secondly, ensure that you not only comply with the requirements of the regulators and other stakeholders, but that you go beyond compliance to safeguard your reputation. Tools such as DIgitalRG.com help the industry do just that.
Thirdly, develop social responsibility strategies in conjunction with your business needs, to balance doing the right thing whilst maintaining clear returns to shareholders.
And seek to break the mould to achieve a standout position. In an undifferentiated market, maybe the bookmaker who genuinely embraces corporate responsibility in an authentic manner can become a clear-cut winner in the eyes of punters, regulators and politicians alike.