The old image of grungy, smoking betting shops inhabited by dubious characters and ‘ne’r do wells’ is, thankfully, long gone. The gambling industry in the UK is one of the most vibrant around since the opening up of betting shops in 1995, the growth of The Lottery and online betting. Gambling has changed into a fairly mainstream hobby, enjoyed by around 60 per cent of the population in one form or another, with an estimated £40 billion now gambled in the UK each year, according to the Betting Research Unit at Nottingham Trent University.

CIOs working in this arena have particularly demanding roles. Technology is at the forefront of the business, with security and availability concerns paramount after a number of denial of service attacks hit leading bookmakers over the last few years. As well as ensuring the IT function is secure and reliable, CIOs now have to contend with new legislation, as well as managing costs and remaining flexible enough to move quickly with the needs of the business.

The UK gambling industry is just about to be hit by The Gambling Act which should come into force in March 2007. Drawing on the recommendations of The Budd report of 2003, The Gambling Act is designed to update legislation, which was drawn up in the 1960s long before The Lottery and the advent of online gambling. The Act will establish a Gambling Commission to regulate the industry and this is likely to begin its work in the autumn of next year.

Key IT issues

Regulation: The new Gambling Act will come into force next year and yet CIOs are still not clear about the detailed requirements they will have to meet. Some have started preparing by consolidating and streamlining their applications and systems.

Managing mixed delivery channels: For some bookmakers, online gambling is only part of the picture. They have a significant number of outlets through other channels and rely on effective IT to show them the overall business outlook across all their delivery channels.

Managing costs:
Like most industries, keeping costs under control is a constant issue. Developing and implementing IT projects cost effectively is a real winner with senior management.

Playing by the rules

In a similar way to the financial services industry when Basel II was introduced, the UK gambling industry must comply with regulations – the details of which are still fairly sketchy. Victor Kemeny, group IT director of William Hill, says it is likely to require high technical standards and reporting systems.

“It will be a massive challenge to meet the deadlines. We don’t know the detail of what the regulations will be yet, but the Act is a set of regulations designed to drive the industry forward and to make the UK a safe haven for online gambling.” Inevitably some UK betting companies have also been affected by the actions of the US gaming ban. The legislation will make it illegal for UK online betting businesses to collect revenues from the US and organisations like PartyGaming are likely to be hit hard. Most of these organisations, including PartyGaming, say they are now concentrating on expanding their operations outside of any US market. By contrast, Betfair, which has operations all over the world, has deliberately steered clear of US punters and instead concentrated on setting up in regulated arenas.

Rorie Devine, CTO of Betfair, says this has been a deliberate policy on the part of the company: “Integrity has to be at the forefront of what we do. In the past gambling wasn’t like that and we will only operate where there is an audited and regulatory environment.”

Spreading your bets

For more established bookmakers, with mixed delivery channels, like William Hill, the emphasis is on making sure legacy systems do not impede business growth as the industry develops. Kemeny, who is overseeing a total infrastructure refresh, believes that bookmakers will have to adopt a de facto infrastructure, like the one he is implementing, if they are to compete and comply with the new legislative requirements. William Hill was one of the last bookmakers to install EPoS systems in its shops, partly because it wanted to be sure that the systems it installed would be robust enough to handle the job.

By replacing its legacy systems with an integrated infrastructure, it is at the forefront of the industry and believes it will have a competitive advantage come the new legislation. Although some of the newer, online betting companies may feel let down by the US rules and believe that the US government is rigging the game in favour of home grown companies, the growth in the gambling market outside of the US should mean there is enough business to go around. The new UK law means that the casino sector will be developed and online betting is on the increase. With the UK market already worth billions and online betting available 24x7, IT functions will have to be robust and agile and CIOs will be at the forefront of business strategy in the industry.


Headquarters: London
Number of employees: 1,200 (global)
Last full-year revenues: £145 million
Head of IT: Rorie Devine, CTO

Rorie Devine has been CTO at online gambling company Betfair for the last six months and has worked at the innovative young organisation for three years. Founded in 1999, the company has five core aims for the year ahead: global expansion; increasing revenue; augmenting its scale; cost management; and enhancing team efficiencies.

“What we are doing here is focusing on our talented team, getting the right people and doing things the right way. The focus for us is the people not the technology,” says Devine.

He says that Betfair’s senior team know that having the top talent is the right way forward. “It is a challenge because we now have an IT team of 300 people and the company’s growth has been very fast. Although it has been difficult to meet demand, we haven’t compromised on talent. It is harder to find the right people and the recruitment market is getting more challenging but it is a global market.”

The company has a global spread with bases in London, Denmark, Tasmania and Malta. “Obviously there is always some debate about local versus global needs but we have evolved our local teams and they work well with the global one,” says Devine. “It is all about how to deliver the business objective from both a local and global standpoint.”

A safe bet

Devine has had a varied career in IT. His early years were spent at Logica, working with investment banking clients. Following that, he worked for an internet startup that provided web users with global information on property for sale, before becoming chief technology officer of NTL’s internet division. He was then headhunted for his present role.

Unlike traditional bookmakers, Betfair does not risk its own money providing betting odds but matches up punters throughout the world who offer their own bets on the outcome of different sporting events and can even place bets after an event has begun. The service is 24x7 and has to be 100 per cent available. “Our aim is to make the products fun and usable. For example, we have just launched a poker room product that was developed inhouse. Our generic philosophy is to deliver more products and make them easy to use,” says Devine.

“The groundswell of the company is realising that the IT team is here to add business value to the organisation and that is great to see.” Last year the company handled 1.2 billion transactions and is expecting 2bn this year, so scalability in line with user responsibility and experience is an important requirement.

"Betfair is different – we are playing a long game. People are the key. We make sure we have the best talent and then give them the right environment to work in"

Rorie Devine, CTO, Betfair

Like most organisations, cost management is a continuing issue. The company uses some strategic partners to help with this and has begun to use automatic procurement via a commodity platform. For example, the company’s datawarehouse runs on commodity hardware with Linux and Oracle.

“We have done it at a fraction of the cost – £800,000 instead of £2.3m. At this level, Linux was a great answer and even Oracle was very excited about the project. It had a big impact on the total cost of ownership.”

The company has weekly management meetings to consider more effective ways of working and also carries out peer mentoring. “The IT leaders present to the meetings and the rest of the organisation learns from that,” says Devine. “We have world-class expertise in the organisation and very high end skills. People are so important – talent gets the opportunity to succeed and deliver the business goals.”

He believes that Betfair is part of something special and different. “There is a lot of talk in the industry about the implications of the changes to the US gaming law but we are different. Since we launched in 1999 we have stopped people in the US using our systems and have always done that because our set up is different. We want to be part of a changing industry,” says Devine.

He adds: “Betfair is different – we are playing a long game. People are the key. We make sure we have the best talent and then give them the right environment to work in.”

William Hill

Headquarters: London
Number of employees: 13,00O
Last full-year revenues: £9.8 billion
Head of IT: Victor Kemeny, group IT director

William Hill was founded in 1934 and now has more than 2,000 shops around the UK, making it Britain’s biggest bookmaker. In 2002 it floated on the London Stock Exchange and by April 2004 was one of the FTSE 100.

Last year it bought out rival Stanley Leisure’s retail bookmaking operations of 561 betting shops. It provides betting shop, telephone and online betting, processing more than 889,000 betting slips each day. In 2004 it covered bets on 60,000 events, involving 25 different sports around the world but until recently it handled its betting shop operations on paper.

Fast deployment

“We are probably the last people to install EPoS into our shops and it has been a very aggressive programme,” says Victor Kemeny, group IT director at William Hill. “We have installed the systems at 1,600 shops over the last eight months, which is very fast and we are proud of our achievement.” The target for the rollout was 50 shops a week and the new systems allow staff to process bets more quickly. The company has also consolidated and merged the systems from the Stanley chain of betting shops in the first half of the year in a 12 week project, incorporating them in its head office operations.

In parallel with this the bookmaker has been preparing for a major infrastructure project. “The infrastructure systems we have are between 10 and 15 years old, plus have had a lot of bolt-ons over the last few years,” says Kemeny. “We knew we couldn’t continue to do that so are moving to a whole new Oracle and HP-based infrastructure. I believe when we have completed it we will have the most advanced and effective infrastructure in the industry and will be switching off our legacy systems in 2008.”

In part this is in preparation for the impact the Gambling Act will have on the industry. The final documents for the Act – which had Royal assent in April last year – will be ready next March, with companies expected to comply by the following September. “It will be a massive challenge, requiring high technical standards and reporting,” says Kemeny. “The new infrastructure will put us in a position to take advantage of the legislation and it is an industry wide issue. We have been pushing projects forward and we have great support at the top end of the company.”

Kemeny has a team of 250, with a field service of 90, as well as some offshore partners. He believes that technology operations are a key differentiator for companies in the industry. As the IT operations of William Hill is based in Leeds, Kemeny says he has not had too many recruitment problems but that the company has a very strong succession planning ethos which should prevent those problems occurring down the line. “We tend to recruit at junior levels and work on developing our people. We are also careful to make sure that we use a skills development programme, so that when contractors leave we keep the skills. We are very fortunate because our HR department and its career development strategy is very good.”

The technology William Hill is installing is not leading edge so it will not have to undergo the pain curve associated with new technology, according to Kemeny.
“In terms of infrastructures I think there will be a de facto standard in place and we will be at the front of that. Some of the industry have been using packaged solutions but they do not use the latest technologies, one of these is based on an Ingres database for goodness sake.”

"We have installed the systems at 1,600 shops over the last eight months, which is very fast and we are proud of our achievement "

Victor Kemeny, group IT director, William Hill

The bookmaker does between 20 and 30 per cent of its business online, although it has the largest retail estate in the sector.

Kemeny says the back-end systems he is currently updating will allow the company to consolidate its risk liability management into a single picture, which, he argues, will give it a great advantage in the market. The new infrastructure will also allow him to balance the workflow over two sites, as part of the company’s business continuity strategy. For the future, Kemeny believes that there will be more channels available for customers. “I think the mobile channel will become very prevalent,” he says. “It already is way ahead in the Far East.”

Camelot Group

Headquarters: Watford
Number of employees: 950
Last full-year revenues: not declared
Head of IT: Neil Kellar, director of IT

Camelot is the company behind the UK’s National Lottery, which since its formation in 1994, has generated over £19 billion for good causes such as regeneration projects.
Camelot is unique – a single-purpose private company running a national institution for the public good. Its prime business objective is to maximise returns to the good causes in the most efficient and socially responsible way. It is a private company, wholly owned by five shareholders: Cadbury Schweppes, De La Rue Holdings, Fujitsu Services, Royal Mail Enterprises and Thales Electronics.

Around 70 per cent of all UK adults are said to play The Lottery on a regular basis, translating to £5bn annually in sales.

Low cost base

The firm spends just 4.5 per cent of all revenue on operating costs, which it says makes it the most efficient public lottery in the EU.

Most of its sales come from its retail channel in shops and supermarkets – with some 26,000 Lottery terminals out there – but a growing channel is via web and text.
No wonder technology gets taken seriously at the company, which runs Europe’s biggest ISDN network. Camelot is among only a handful of UK companies to receive Capability Maturity Model Integration (CMMI) accreditation for its IT operations from the internationally respected Software Engineering Institute (SEI).

"Players have total confidence in our services. My job is to make sure that we retain and build on that trust"

Neil Kellar, director of IT, Camelot Group

Neil Kellar, recently promoted to the position of IT director, reports to the group’s operations director, previously having had responsibility for IT as part of a wider executive team.

Now his focus is overall responsibility for the whole of IT. Kellar says: “The National Lottery is one of the most challenging IT operations in the country – 70 per cent of the adult population play regularly and they rightly expect all their transactions to go through without a hitch. Players have total confidence in our services. My job is to make sure that we retain and build on that trust.” He comes to the new role with the benefit of three years in Camelot so far, backed by previous high-level IT and service delivery roles at Avis Europe, Pearson and Penguin Books.

Kellar points out that as significant as his experience has been in IT he originally comes from an operations background – a basis he finds very useful in his new, more strategic role.

He also likes the fact that Camelot, despite its high public profile, is essentially a small to medium enterprise: “We have less than 1,000 staff in total, of which the IT department makes up a significant chunk at 200 people.”

IT plays a very central role to Camelot’s business, he says. “It really is the backbone of all we do here and there is a firm responsibility on us as the IT team to deliver.”
Kellar is proud of service delivery statistics that say over 99 per cent was a reality on the company’s web and main gaming retail terminals estate in the past 12 months.

Kellar also takes pains to make sure it is not just the infrastructure that works well. “IT and business alignment is vital, in fact, absolutely critical to what we do. All new business initiatives are as closely integrated with IT as possible from the start. They have representation from business and technology teams on project initiation steering groups, so no project runs without the right buy-in and management support. We really make sure IT sits at the heart of the business.”

He contrasts this with what he worries is the reality in too many IT organisations. “A lot of IT ends up being seen as the obstacle, as a blocker. That doesn’t help its reputation. It’s really worth cultivating a ‘can-do’ attitude and getting seen as being there to enable the business to do better,” he believes.

As the adverts say – it could be you.