Christopher Bell Chief Executive Investor Day – 4 October 2006

Christopher BellChief Executive

Investor Day – 4 October 2006

Team structureChris Bell

Chief Executive

MikeNoble

CompanySecretary

RosemaryThorneFinance

JulianArlett

InvestorRelations

JohnO’ReillyRemoteGaming

BryanTakerHuman

Resources

MikeO’KaneTrading

AlanRossRetail

MikeNuttallCasinos

AlexKovach

International

RichardAmes

UK Retail

SteveMaxwell

IT

DavidBriggs

eGaming

Objectives

• Meet with senior and operational management

• Workshops covering major strategic initiatives

• Appreciate how we will grow and stay ahead

• See and touch our leading edge technology

Betting and Gaming sector• Ongoing change:

o Regulation and legislation – UK / Europe / USA

o Technology

o Product and service innovation

o Internet a catalyst for change around the world

Ladbrokes core activitiesRetail - Growth in UK from

improvement of shop estate, technology, increased product range, and 2005 Gambling Act- Irish estate will continue to grow in size

eGaming - Growth through product pipeline, localisation of product and geographic expansion

Telephone - Growing core business, added value from High Rollers

International - China and Russia important emerging markets- Italy – a significant opportunity- ‘Another Italy’ will realise in excess of the 3-5 year £20-40m EBIT target

Casino - 17 new UK casinos – focus on selected locations

Agenda• Presentations

Alan Ross - MD European RetailJohn O’Reilly - MD eGaming and

TelephoneSteve Maxwell - Chief Information Officer

• WorkshopsRichard Ames - Retail (MD UK Retail)David Briggs - eGaming (MD eGaming)Mike O’Kane - Trading (Trading Director)Alex Kovach - International

(Development Director)

• Q&A session• Visit to Paddington casino

Alan RossManaging Director, European Retail

Retail strategy

Team structure

Alan RossManaging DirectorEuropean Retail

InternationalAlex Kovach &Kevin Hopgood

CasinosMike Nuttall

ITSteve Maxwell

Ireland & Belgium

UK RetailRichard Ames

• Drive Retail Gross Win

• Control Cost Structures

• Key areas of Focus

o Customer

o Competitiveness

o Contribution

• All actions are facilitated or underpinned by Technology

Key themes for Retail strategy

Retail Gross Win

300

350

400

450

500

550

600

650

700

2000 2001 2002 2003 2004 2005

£m

OTC FOBTs AWPs

• Target biggest growth opportunity marketso 18-34 year oldso Local marketing

• Modern Shopso New shop designs and formatso Evening openingo No Smoking Betting Shops

• Gambling Act Opportunitieso Product marketing / advertising

Customer

• Differentiated Product Propositiono Ladbrokes Xtra

• Xtra Screens, Xtra Content, Xtra Choice o V6 EPOS

• International Pools• Enhanced Betting in Play proposition -

Quickslipso FOBTS

• Twin screen games, Casino grade note & coin mechanisms

o Self Service Betting Terminals• Ladbrokes.com on a touch screen terminal

Competitiveness

• Driving Gross Win

o Increase customer loyalty

o Increase betting opportunities

• Controlling Costs

o Continuing focus on company cost reduction programmes

o Efficiencies in shop and field management processes

o Continuing focus on individual shop contribution

Contribution

• Increase size of shop estateo Eireo Northern Ireland

• Like for like Gross Win increase in current estate

• Introduction of Ladbrokes Xtra Gold Service and V6 EPOS

• FOBT opportunity

Ireland

• Focus on largest regional markets• Focus on core countries within regions• Products

o Fixed odds bettingo Existing remote products

• Poker, casino, gameso Sports lotteries

• Wherever possible, enter markets with multiple channels

o Retail, Internet, Franchise (Sportsbook in casino)

International Retail

John O’ReillyManaging Director Ladbrokes Remote

eGaming strategy

Team structure

TelephoneBetting

Hugh Carr

FinanceJo Boydell

PR / PACiaran O’Brien

VernonsSteve Roberts

ComplianceSue Harley

eGamingDavid Briggs

Ladbrokes InternationalJim Falconer

International Business Dev.

Alex Kovach

IT Steve Maxwell

John O’ReillyManaging Director

Remote

eGaming Gross Win

• Through rapid innovation (e.g. single wallet, best of breed banking solutions etc) an overall operating loss of £10m in 2000 was converted to a profit of £41.4m in 2005 (CAGR of 90% since 2001)

• Operating profit of £19.8m in H1 2006

0204060

80100120140

2000 2001 2002 2003 2004 2005

(£m

)

Sportsbook Casino Poker Games Other

Registrations

• Ladbrokes eGaming currently operates:• 18 currencies• 12 languages• 21 payment methods, with single wallet• 200+ staff in UK and Gibraltar

• Growth through product and market development

• Online sportsbook• 200+ casino games• 46 ‘soft’ games• Poker

0

100,000

200,000

300,000

400,000

500,000

600,000

2000 2001 2002 2003 2004 2005

Num

ber

of A

ccou

nts

0

500,000

1,000,000

1,500,000

2,000,000 Num

ber of Accounts

Annual Registrations Cumulative Registrations

Product developmentFeb 2000 Ladbrokes.com

Mar 2000 Interactive TV Service

Oct 2000 Ladbrokescasino.com

Nov 2000 Ladbrokes.com betting portal

July 2001 Balls!

Feb 2002 Sky iTV Service

May 2002 Ladbrokespoker.com

May 2003 Rio Bay Casino

Nov 2003 One Account facility rolled out

Dec 2003 Ladbrokesgames.com

Dec 2003 Multi table Poker

Nov 2004 Affiliate programme

Jan 2005 Games Roulette

Feb 2005 Live Dealer Casino

Mar 2005 ATR Video streaming

Aug 2005 Ladbrokes Financials

Nov 2005 ‘One-click’ Casino

Jan 2006 Mahjong

April 2006 Bingo

May 2006 Backgammon

July 2006 ‘Deal or No Deal!’

Sep 2006 Pontoon betNew Sportsbook

Multilingual Poker

Next generation Poker

Multi-Player / P2P Casino

DiTV roulette

Coming Soon

• Far East, Scandinavia, Mediterranean countries, Africa (selected countries)

• Localised products, services and A&P investment

• Pressing for free movement of services (and freedom of establishment) in Europe

• Legal Update – Netherlands, Germany, Norway, Sweden, Denmark, Italy

• Impact of US Port Security Bill

Market development

• Strong management team – UK and International

• World’s biggest (non-US) sportsbook

• International betting in play

• Single account across Telephone / Interactive / Retail

• Advanced Casino software, rapid game development, localised services, affiliate and cross-sell programmes

• Next generation Poker software

• P2P and branded (licensed) Games

• New product and channel developments

Growth prospects

Steve MaxwellChief Information Officer

Ladbrokes’ technology core

Business Systems Environment

International

Remote

Content

Retail

Betting Centres

Tracks

Shops

External

Les II

Xtra

iTV

Telebet

Internet

Retail

Remote

Remote Casino

VCC

Integration

London LiverpoolKL

Italy

Spain

Vietnam

Russia

China

Retail

Retail

Retail

Mobile

EventsProducts

Remote

Retail

Business Applications Architecture• Insourced strategy and management

• Insourced project management

• Insourced technology services and operations (IS, Engineering, …)

• Outsourced software development (leveraging specialist expertise)

• Contract with key technology suppliers qualified to partner with Ladbrokes

1st Class Technology PartnersTechnical Software

Storage

Network

Servers

Infrastructure Application Software

Sun Dell HP

EMC

Cisco BT

Data Mgmt

Network

Servers Sun Microsoft

IBM Oracle MS

Cisco

Gaming

Betting Alphameric Orbis

MGS Cyberview Orbis

Bandwidth Internap BT MCI Gibtel

Content Alphameric Various

Payments Datacash PSPs Banks

Handheld TerminalsHandheld terminals enable cashiers to accept bets directly from players on the gaming floor delivering sports betting opportunities to customers on the casino floor via the casino’s promotional staff

Screen SystemsThe content delivery systems enable distribution of screen content across the screen systems which are installed within the gaming venue… multi-.

EPOS SoftwarePlayers place bets by calling over their bet, and their receipt prints a bar-coded receipt. Payout of winning bets is by scanning the players unique bar coded receipt……multi-language, multi-channel, multi-payment methods

Retail Betting - Russian Casino Model

‘International’ Retail Betting Model

POS

Mobile

ContentPresentation

Online

Back Office

Betting Shops, Casinos, Hospitality…

Retail Betting Model

Betting Shops with Mobile and Internet Gaming

Richard AmesManaging Director UK Retail

Ladbrokes Retail

Notes

Notes

Notes

David BriggsManaging Director eGaming

The Ladbrokes eGaming experience

Team structure

David BriggsManaging Director

eGaming

ProductUnits

InternationalDevelopment

Systems Finance,HR, Legal…

MarketingServices

How does the structure work?

ProductBusiness Units

Marketing Services

International Development

Systems & Projects

HR, Finance, Compliance

Multi-product offering, but single product focus

Poker

Casino Games

Sportsbook

• Illustration of the Ladbrokes Sportsbook, Casino, Poker and Games experience

• Making technology work for the customer

• The international dimension

• Innovation at the core of what we do

Interactive breakout session

Mike O’KaneTrading Director

Ladbrokes’ trading strategy

Trading Strategy• Key element of the business:

o Market makingo Liability managemento Client service principleso Price competition

• Department structure reflects product and business profile

o Horseracing & greyhoundso Sports

Trading StructureMike O’KaneTrading Director

Horse &Greyhound

Product Director

SportsProduct Director

TradingDevelopment

Manager

RacecourseLiability

Manager

•Liability Management H/D All Channels

•H/D Odds Compilation

•Bet Acceptance, Retail, Net, Phone, Eire, Vernons

•Odds Compilation and Liability Management

•Sports

•Football

•European

•Market Development

•Trading Analysis

•Performance Reporting

•Systems Development

•Customer Management

•Racecourse Representation

•Hedging Activity

Trading Strategy• Strong product range across all channels:

o Further development of Betting In Play to cover all live television sport

o European focus across all sports with continued expansion of sports portfolio to match geographical footprint of customers

o All UK and Ireland horseracing priced every day

Trading Strategy• Liability Management:

o Systems based market management using EPOS and Telephone / Internet

o Customer management process identifies opportunities to grow business as well as managing risk

o Hedging into racecourse and exchanges

• Visit to Trading floor

Alex KovachInternational Business Development Director

Ladbrokes’ International strategy

Estimated regional market size

Source: GBGC

0

100

200

300

400

500

600

Africa Asia &MiddleEast

Central,South

America

Europe NorthAmerica

Oceania

$B

nTotal amount gambled 2005 (US$Bn)

Our International growth opportunity• Faced with competition from illegal and online bookmakers,

numerous international governments are reviewing sportsbetting as a revenue generator, controlled by the state or the licensed lottery operator

• The opportunity for Ladbrokes to export its core fixed odds betting capability is often to work with state governments / monopoly lottery operators

International strategy – Products & Channels• Fixed odds betting• Existing remote products

o Pokero Casinoo Games

• Sports lotteries• Exclude:

o Offline casinoso Slotso Racetracks

• Where possible enter markets with multiple channelso Retailo Internet o Franchise (Sportsbook in Casino)

International strategy – Geography• Focus on largest regional markets

o Europeo Asia

• Focus on core countries within regionso Ambition

• Market share 1st / 2nd / 3rdo Investment

• M&A and JV opportunities• Build brand through marketing investment• Invest in building relations and a reputation with governments worldwide

o Product• Localise

• Exclude:o Africao South Americao Middle East

European market map

Size of bubble indicates gambling spend per person, Source: CIA website, 2006 GBGC

France

Spain

Italy

NordicsIreland

Germany

Poland

Russia

Austria

Portugal

Belgium

Netherlands

Czech Hungary

Slovakia

Greece

Turkey

E. Europe

5.5

6.5

7.5

8.5

9.5

10.5

11.5

0 5,000,000,000 10,000,000,000 15,000,000,000 20,000,000,000

Size of Market (US$)

Ea

se

o

f e

ntr

y

Easier

Harder

Christopher BellChief Executive

Ladbrokes growth strategyUK Retail - Technology, product range,

opportunities to bet- UK – £500 Jackpot machines, winter evening opening- Ireland – More shops, FOBT’s?

eGaming - Product and service innovation- New geographies

International - Vietnam / Turkey / China / Russia / …others?- Italy

Telephone - Steady growth in core business, maximise High Roller opportunity

Finance - Cash positive, target gearing x3.5 – 3.75- Share buybacks / dividend / acquisition

Q&A’s

Notes

Notes

Notes