– THE ONLINE <strong>GAMING</strong> MAGAZINE – XXXXXXXXXXXXXXXXBroader knowledgeof the players’behavior and solidcustomer protectionwill support longtermearnings whilesecuring the wayforward in the newlyregulated markets.THEDEVILIS INTHE DETAILSBY FREDRIK RÜDENthe massive number of rules and regulations that surround a listed companyin the gaming sector must be monitored closely, since they tendto develop in different directions. Every company must also take intoaccount their commercial framework and their formulated goal, missionand vision ambitions.How do you secure growth and profitability in a demanding andconstantly changing environment? Having strong control systems isessential.An important part of <strong>Betsson</strong> <strong>AB</strong>´s stewardship responsibility is toreview and approve the commercial ambitions of its subsidiaries andmake sure they implement high quality business control systems.– 024 –
– THE ONLINE <strong>GAMING</strong> MAGAZINE – Financial issuesPlayer protection is prioritized<strong>Betsson</strong> <strong>AB</strong> constantly ensures thatthe group's operating entities protectand secure customer funds. Thisis a key responsibility that the differentgaming authorities require fromall licensed operators. The first thinga player normally does, when startinga game that involves money, is to depositfunds. In order to act as a linkin handling credit card payments, anoperator must comply with PCI DSS(Payment Card Industry Data SecurityStandard), which guarantees astable and secure infrastructure. Efficientpayment solutions are vital, anda failed deposit is a loss of revenue.History has proven that any supplierof gaming solutions that providesplayers with the means of conductingfast and secure payments enjoysa clear competitive advantage since itcontributes to, and strengthens, confidencein the company. That is whythis is a prioritized area for <strong>Betsson</strong><strong>AB</strong> as parent of gaming subsidiaries.Following the deposit, the playercan start enjoying the different games.To be able to handle huge gaming volumeson a daily basis, investment insolid systems and high-quality routinesare ensured when <strong>Betsson</strong> <strong>AB</strong>approves the gaming subsidiaries´budgets. Monitoring systems androutines is an important risk managementarea as a significant failure canhave an adverse effect on the incomestatement. External auditors, reportingto <strong>Betsson</strong> <strong>AB</strong>´s managementand board of directors, are importantparties in identifying weaknesses inthe group's control systems. The auditorsare an important complementto all other internally initiated checks.When the player’s game is ended— with or without a gain — the operatoror player account shows anincrease of funds. The operator isrequired to continuously report cashbalances to the gaming authority.The purpose is to ensure that thecompany can handle the balancedue the customer in the unlikelyevent of having to pay out the totalbalance. An operator with inadequatecash flow reporting or lackof respect for these procedures mayface serious problems, as evidencedby the 2011 crackdown on one largeoperator, based on its alleged lack ofcontrol regarding customer funds.<strong>Betsson</strong> <strong>AB</strong> has requested its subsidiariesto set up cash flow reportingprocedures and to view the inand out flows closely to secure compliancewith gaming regulators andcustomer funds.Knowing Our ClientsAnother framework of rules incorporatedin gaming regulations is KYC(Know Your Client). <strong>Betsson</strong>´s gamingentities are responsible for settingup a customer register and forverifying each player’s identity. Thisis the foundation on which Internetgaming is built and a good startingpoint for barring access to minors.An Internet gaming site can also bea helpful tool for player protectionin other aspects, in that players canview their own behavior, impose personalbudgets and other similar restrictions.Players can get real-timehelp or advice to support their playingambitions.Personally, I am glad not to be inthe same position, as traditional gamingmonopolies such as Svenska Spel,who recently enforced restrictions forunder-aged players but continue tosell physical games despite a lack ofdeeper understanding about the individualswho buy them. It is hard tosee how most monopolies would gainacceptance within the EU for arguingthat they are better at taking care ofplayers than the private alternatives.But there is more to the picture thanmeets the eye, since a problem playeris bad for business in many ways. Oneis that he/she is unlikely to generatesteady revenue over a longer period.Secondly, this kind of misbehavior islikely to generate bad will for the onlinegaming sector.Broader knowledge of player behaviorand solid customer protectionwill support long-term earnings whilesecuring the way forward in the newlyregulated markets.Order and clarity isvital for successAt a higher level goal, mission and visionstatements, approved by <strong>Betsson</strong><strong>AB</strong>, must be reflected in operations.Generally speaking, goodorder in decision-making processes,clarity in areas of responsibility andaccountability is vital to <strong>Betsson</strong>’ssuccess. Viewing the subsidiaries of<strong>Betsson</strong> <strong>AB</strong>, we place particular emphasison identifying and evaluatingthe most significant risks in routinesand work hard on controls aimed atmanaging these risks. However, thechallenge lies in preserving a dynamic,hungry company culture in whichindividuals are rewarded and appreciatedfor their efforts while risks aremanaged on a sound commercial basis.It is therefore important to find agood balance between ambition andmaintenance of detailed controls. Improvedgovernance and control in thegaming field facilitates good businessand is a competitive tool in the capitalmarket, as well as in strengtheningthe industry’s position in the eyes ofthe public.– 25 –
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