Navigating Risk: Turning Challenges into Opportunities 156m2d

In the dynamic and high-stakes world of gambling, risk management (RM) often takes a back seat to the thrill of the game. Yet, for gambling companies, navigating risks is not just prudent—it’s essential for sustainable growth and success. In today’s rapidly changing landscape, it’s more critical than ever for companies to stay ahead of emerging risks. 13222r

Ioana Ungureanu -expert in risk management in the gambling industry 4p6a5v

From regulatory changes to technological advancements and shifts in consumer behavior, gambling companies face a myriad of challenges that require proactive risk management strategies. 434g1e

For example, Cybersecurity Attacks – There has been a monumental surge in targeted cyber-attacks against the gaming sector. Forbes have made a note of more than 323,000 complaints of social engineering attacks in 2021 – three times more than 2019. And many news sources have described the effect of working from home, and with it an increase in gaming culture, that has led to increased risks in the gaming industry. And as threats increase, and as the industry continues to grow, the financial reward of a successful attack continues to entice bad actors.

Or, let’s talk Responsible Gambling Initiatives – The growing emphasis on promoting responsible gambling practices, including through defamatory public campaigns against gambling addiction should convince actors in the industry to focus on mitigating these types of risks. Many gambling companies are already implementing innovative responsible gambling tools, such as self-exclusion programs, reality checks, and deposit limits.

Not to mention Technological Innovation and the integration of emerging technologies such as artificial intelligence (AI) and blockchain in gambling operations. Some gambling companies are leveraging AI-powered analytics tools to enhance risk detection and fraud prevention capabilities. Additionally, blockchain technology is being explored for its potential to increase transparency and security in online gambling transactions.

But to even get there, the main challenges come from “inside”.

risk management

Let’s start with the Traditional Mindset of Stakeholders which, in gambling companies, often revolves around taking risks, as it’s inherent to the nature of the industry. Convincing stakeholders to prioritize risk management can be a challenge, especially when there’s a prevailing belief that risk-taking is synonymous with success.

Misguided perception of Risk Processes is another cornerstone challenge. Many view risk processes as obstacles rather than enablers. In a fast-paced environment where decisions must be made swiftly, risk processes are sometimes seen as bureaucratic hurdles that slow down operations instead of tools that protect the organization from potential harm.

Last, but not least, we land to Overcoming the “Competition is not doing it” Paradigm. The perception that “if competitors are not implementing, why should I?” is a prevalent challenge. This mindset can lead to complacency and a false sense of security, neglecting the importance of proactive risk management practices.

While there’s no legislation mandating risk management in gambling companies, like for Anti-Money Laundering or Data Protection, overlooking its importance can be detrimental. i2u62

Implementing effective risk management processes brings numerous benefits, even if we are talking about:

Streamlining audit processes and reducing the likelihood of audit findings or penalties – Implementing robust risk management practices provides auditors with greater confidence in the reliability and integrity of financial reporting.

Giving assurance to Investors that are seeking protection for their investments and assurance that the company is operating in a responsible manner – A well-defined risk management framework demonstrates a commitment to transparency, ability, and long-term sustainability, thus attracting potential investors.

Preparing for Going public in the future that requires rigorous due diligence and compliance with regulatory requirements. A comprehensive risk management framework can enhance the company’s credibility during the IPO process, instilling confidence in potential investors and regulatory authorities.

Or “just” for Protecting the Business, Risk management serves as a shield against potential threats and vulnerabilities. It helps identify and mitigate risks such as financial losses, regulatory non-compliance, reputational damage, and cybersecurity breaches, safeguarding the business’s assets and reputation.

In conclusion, while risk management may not be mandated by legislation in the gambling industry, its implementation offers numerous advantages for stakeholders. By shifting the mindset, viewing risk processes as enablers, and breaking free from the “competition is not doing it” paradigm, gambling companies can unlock the full potential of risk management. Embracing risk management not only protects the business but also enhances its resilience, credibility, and long-term viability in a highly competitive landscape.