Business ethics and security

Svenska Spel defines its business ethics responsibility as the company’s responsibility to ensure that people are not exploited, deceived or otherwise involuntarily harmed by its operations.

Svenska Spel’s overall objective in terms of business ethics and security is to identify and prevent unethical conduct, whether internal or external. Svenska Spel is explicit that its business is not to be exploited for money laundering or other criminal operations. Development of competitive and popular products as well as distribution forms with integrated responsible gaming and security thus become a key part of the business. Svenska Spel’s mandate includes:

• Observing consumer interest as a trustworthy alternative to illegal gaming operations.
• Taking the risk of fraud and illegal gaming into account.
• Maximising security in gaming management.

New code of conduct/ethics policy

Work on drawing up a new code of conduct commenced in 2010 and will be adopted by Svenska Spel’s Board during the first half of 2011. Svenska Spel’s code of conduct summarises the company’s overall guidelines for responsible action.

Ethical responsibility for suppliers

Since the overwhelming share of Svenska Spel’s suppliers are based in Sweden, a follow-up of suppliers’ observance of human rights has not been a matter of importance. In 2010, however, Svenska Spel procured an Indian supplier for the printing of lottery tickets. Procurement was marked by extensive terms and conditions covering compliance with human rights and good working conditions. During the year, ten employees at Svenska Spel received training from CSR Sweden in human rights and other ethical issues, as part of efforts to monitor and control the new supplier regarding these issues.

Risk management

Risk management involves the Company identifying and managing its risks in order to achieve its objective in an optimal manner and raising risk awareness. Not all risks can be eliminated, but an effective risk management process enables them to be identified and handled on an acceptable level in operations. Read more about Svenska Spel’s risk management.

Security function

Security processes at Svenska Spel are run by the manager of Group Security & Risk Management. The security function is responsible for protecting the Group’s assets through:

• coordination and administration of the Group’s overall risk management process, and monitoring that security programmes are conducted in line with the Group’s guidelines
• Group-wide policies and guidelines concerning risk management and security
• processes for crisis and incident management at Group level
• Group-wide processes for management of abnormal gaming activities
• intelligence contacts with judicial administration authorities and police authorities
• security certification such as ISO 27001, WLA SCS and PCI DSS
• international contacts in security matters.

Control and follow-up

Security processes are followed up continuously and internal audits are implemented regularly in all business and operational areas and among the staff units. Reporting is done to the Audit Committee, which is part of the Board. There are clear rules for handling any deviations from the company’s policy.

Activities and results

Money laundering

Risk of and attempts at money laundering arise in contexts involving substantial cash flows, such as at casinos. Svenska Spel takes a serious view of money laundering. However, the measures the casinos take are deemed to be effective and the continuing cooperation with the Financial Police and the casinos’ supervisory authority offers the potential for favourable results. In 2010, Casino Cosmopol reported 311 incidents (344) to the Financial Police pursuant to money laundering legislation.

Illegal gaming machines

Svenska Spel continuously reports occurrences of illegal gaming machines to the appropriate authorities, primarily the Swedish Gaming Board. Svenska Spel conducts regular checks at retailers and business partners and terminate the contract with retailers if such gaming machines are not removed. In 2010, nine retailers (two) were terminated due to illegal gaming machines.

Fraud

Svenska Spel also acts to counteract fraud and cooperates with the police, banks and card companies in matters relating to stolen or counterfeit credit cards at retailers, business partners and on the Internet. During 2010, Svenska Spel worked towards adapting its processes to the card companies’ PCI certification – an extensive programme aimed at increasing data security and which is a prerequisite for handling card-based transactions. PCI certification will be completed during 2011.

Svenska Spel strengthened its fraud management procedures and the banks further improved their routines for card-based payments during the year. Thanks to these measures, fraud is no longer considered a major problem in operations.

Gaming on credit

Checks are carried out when indications arise that gaming on credit may occur at retailers or business partners. Where there is supporting evidence, the contract with the retailer or business partner is immediately terminated. The contracts with two retailers (three) were terminated in 2010 as they accepted gaming on credit.

Focus for 2011

• Adopt and communicate a new code of conduct for Svenska Spel.
• Follow up the application of the company’s guidelines for suppliers in the relationship with the supplier in India.
• Communicate and highlight issues regarding illegal gaming, money laundering and fraud.
• Continue to adjust working procedures in line with the stipulations of the Swedish Gaming Board as a result of money laundering legislation.