Risks and risk management

A number of risks may influence Svenska Spel’s target fulfilment to a lesser or greater degree. Svenska Spel relates its major risks to the four general target areas: Customer, Responsibility, Business-like approach and Employees. One single risk can affect one or more of them. Risk assessment is conducted by means of a continual risk management process.

Risk is defined as uncertainty that can affect Svenska Spel’s objectives. Many of the risks can impact on the Company positively or negatively. Working with risk management permits the Company to prevent or be prepared for what can occur in operations. Effective risk management facilitates the identification and management in the Company.

The account below presents Svenska Spel’s key risks as related to the four overall target areas of Customer, Responsibility, Business-like Approach and Employees. One single risk can affect one or more of the target areas.

Competition for customers

The trend in gaming behaviour towards faster games and higher percentage reimbursement to winners is a tangible risk affecting the Customer target area. Thanks to the benefit of conditions other than those applying to Svenska Spel, competitors have the potential to offer alternative gaming experiences and bonus offers. This could enable our competitors to more readily meet customer demands, thereby eliminating Svenska Spel as the player’s first preference.

The risk of technology problems that give rise to gaming disruptions or other inconvenience could have an adverse impact on the customer relationship, as could any failure to prevent incidents that harm the brand, such as money laundering at the casinos.

Information on responsible gaming

Among the risks relating to the Responsibility target area is the core risk that Svenska Spel does not have sufficient potential to reach customers and interest them in Svenska Spel’s gaming environments in preference to other gaming companies. This would mean that the mandate would not be fulfilled in an optimal manner from a responsibility perspective or that we do not attain the results targets. The organisation is keenly aware of this risk and works proactively to counteract it, such as through the continuing development of responsible gaming tools and the dissemination of know-how.

Profitability may be threatened by regulation

Risks related to the Business-like Approach target area primarily include potential re-regulation of the gaming market or the introduction of further restrictions that would compel the organisation to work under new conditions. Also, the current competitive situation – on unequal terms while awaiting changes– impact profitability and market share.

Operating risks to profitability relate to gaming disruptions or a disruption in the supply of lottery tickets. Generally, Svenska Spel depends on only a few suppliers, since a large share of the gaming system is owned by the Company and is operated using in-house resources.

Financial risks

Financial risks are generally considered low. The Svenska Spel Group is self-financing as its cash flow easily covers its investment requirements and operating costs. The Group has no interest-bearing liabilities.

Attracting employees

As regards the Employees target area, the primary risk scenario is that employees are seriously injured. Casino operations represent an exposed environment and, for example, a robbery or other violent incidents can result in serious injury to employees and guests. Examples of other risks in this area are related to target breakdown, roles and responsibility. Svenska Spel must have competent and committed personnel in order to attain the set strategic and operational objectives.

Cay Pettersson, Security Manager at Svenska Spel, was nominated as "Security Person of the Year" in the security industry’s biggest competition, Security Awards.