The Board has overall responsibility for risk management and considers the risk process as an integral part of strategic planning.
The Executive Directors make recommendations on the overall approach to risk management and identify the principal risks and uncertainties.
The Audit Committee is responsible for assessing the scope and effectiveness of the process established to identify, assess, manage and monitor risks.
The Board routinely monitors risks that could materially and adversely affect the Group's ability to achieve strategic goals, financial condition and results of operations.
The Board considers the following impact areas in assessing risks:
The Board is supported by executive management personnel within the above mentioned areas of the business who collectively play a key role in risk management and regularly report to the Board through the Audit Committee. The risk management processes are reviewed formally by the Audit Committee annually.
The risks outlined here are those principal risks and uncertainties that the Executive Directors consider material to the Group. They are not presented in any order of priority. Additional risks and uncertainties, not currently known to the Directors, or that the Directors currently consider immaterial, may also adversely affect the Group's business, results of operations or financial condition.
| Legal and Regulatory | ||
|---|---|---|
| Risk | Description | Mitigation |
| Increasing regulation in online gambling | The regulatory position on online gaming is changing rapidly; many countries are reviewing their position, especially in Europe and are drafting new legislation. These will affect the tax paid in many jurisdictions however it will also have the potential to open the market to a greater number of customers. There is a risk that the new regulations could inhibit revenues or result in having to withdraw from markets to avoid breaching regulations. | We are working to identify countries that are looking to introduce new regulations and where possible we become actively involved in shaping their new regulations and educating them in the technicalities of implementing gaming bills. At the same time we are aligning our internal processes and infrastructure to ensure we are well placed to meet the requirements of the new regulatory regimes. We are also monitoring our global strategy on a country by country basis to ensure the Group's balanced portfolio remains so in the face of these changes. In addition, the Group limits its regulatory risk from any one country by accepting wagers from a large numbers of jurisdictions. |
| Risk | Description | Mitigation |
| Dependence on regulatory licences | There can be no assurance that any jurisdiction in which licences are held by or on behalf of the Group will not change its licensing requirements, including the terms and conditions to which the licences and approvals currently held by or on behalf of the Group are subject. If the regulatory scheme of any jurisdiction in which the Group operates were to change its licensing requirements, the Group may be required to expend significant capital or other resources in order to comply with the new requirements and/or may not be able to meet the new requirements, either or a combination of which could have a material adverse effect on the Group's business, financial condition and results of operations. | The Group has diversified its risk by obtaining multiple licences. Betting activities are licensed in Alderney, Antigua and Barbuda, Australia, Northern Cyprus, South Africa and the UK. The Board believes the Group has a good relationship with the relevant regulatory authorities but there can be no guarantee that these licences will be renewed or that they will not be terminated early. |