Risk Management in Gaming: Learn about Means of Control

Any commercial activity is subject to some risks. Threats cannot be eliminated, but it is possible to control and minimise the losses if they occur. This is what risk management programs are for.

The Win Win Casino team has prepared detailed information on:

• how the risk forecasting and assessment system works;
• what to look for when choosing tools;
• what are the benefits of the right strategy.

There are solutions for business scaling and ready-made online casinos with the following components:

• built-in loyalty programs and bonuses;
• interactive security systems from partner brands;
• multicurrency payment modules;
• licences from the largest gambling regulators.

What You Need to Know about Risk Management

A risk control system is a complex product that includes software, analytical services and tactics for managing factors that can bring financial, reputational and other types of damage to a business.

The tasks of the tool include combating such threats:

• damage to reputation and brand image;
• a slowdown in economic growth;
• increasing the level of competition in the niche;
• change in the legal norms for the control of the industry;
• the impact on the online project of malware and cyber-attacks;
• low level of meeting the needs of the audience;
• leakage of internal personnel of the institution;
• violation of the principles of responsible gambling and company policy.

Capabilities of Risk Control Programs

Risk management systems help you find ways to quickly respond to a potential threat and choose the best strategy to minimise the consequences.

Various mathematical algorithms and automated analytical services are used to assess the level of risk.

The software can perform the following tasks offline:

• round-the-clock control and analysis of user activity on the site of slot machines;
• assessment of the stability and effectiveness of the mathematical models used in the game;
• monitoring the results of gaming sessions and actions of gamblers;
• processing and analysis of potential risk factors.

After collecting information, the program automatically responds to the identified factors following the specified algorithms.

The tool can be used for:

• detection and blocking of players using malicious, prohibited software;
• identifying bonus hunters and blocking their accounts;
• fight against multi-accounts;
• blocking bets that pose a potential threat to the game algorithm;
• detection of abnormal behavioural activity.

The Main Types of Risks in the Field of Gaming

To assess and classify a potential threat, you should pay attention to the following aspects:

• the cause and likelihood of the risk occurring;
• time spent on the elimination of consequences;
• threat management level;
• relationship between risk factors.

In the iGaming industry, the following types of risks have the greatest impact:

1. Reputational. The threat of damage to the company's image.
2. Financial. Possibility of loss of large monetary assets.
3. Regulatory. The risk of being denied a gambling licence or being penalised by the officials who establish rules.
4. Network. The threat of information leakage, loss of important commercial data or violation of casino security rules as a result of exposure to third parties on the resource.
5. Violation of the responsible gaming policy. The risk of the company being included in the sanctions lists and violating anti-money laundering and terrorist financing regulations.

Variants of Risk Management Strategies in Gambling

An online casino risk management strategy is a unique set of measures to work in adverse conditions and situations. The process is based on predicting potential problems and tools to minimise them.

Ideally, the program should be integrated into all administrative and management processes, including:

• budget planning;
• company asset control;
• organisational business processes;
• research and implementation of unique gambling developments;
• quality management of gaming products;
• labour safety checkups;
• social factors of doing business (including cooperation with the media, partners and other third-party resources);
• information security control;
• analysis of market trends and customer preferences.

In practice, an online casino operator can choose one of three strategies that best meet the needs of the business.

Types of risk control organisation
Management within a division	The forecasting of adverse factors and the implementation of protection measures are carried out by the divisions of the company within their competence: accounting, support, development department, etc.
Involvement of third-party specialists	Passive risk management in the format of outsourcing services, when potential risks are assessed by external experts. The casino operator can order a comprehensive risk analysis or an audit of individual business segments. For example, Abilott offers a service for evaluating the health of gaming systems by simulating cyber-attacks.
Active risk management	The casino operator creates a specialised internal division dedicated to forecasting and mitigating potential risks. Depending on the needs of the company, the head of the department can make management decisions

Methods for Managing Risks and Countering Potential Threats

There is no single scheme of work in the field of forecasting and minimising risks. The optimal strategy and tools are selected taking into account the specifics and administrative nuances of doing business.

The main options for risk management programs for casinos are:

Evasion

An optimal loss control program that allows you to completely avoid potential risks.

An example of using a strategy in a gambling niche: an operator analyses the advantages of a licence from a particular regulator and evaluates the prospects of a purchase. In the event of a change in legal regulations or tax policy, the project owner completely renounces the licence and begins collaboration with another commission offering more favourable conditions.

Prevention

A method of limiting, but not eliminating, risk factors. The operator can:

• connect and optimise the security system in advance;
• restructure the internal departments of the company;
• restrict access levels for full-time employees;
• create reserve funds to cover potential financial losses, etc.

Loss Reduction

It is a risk-taking strategy with an emphasis on minimising possible damage.

In an online casino, the program can be represented by a bonus policy, when wagering conditions minimise the likelihood of large payouts, or by tournaments, the prize fund of which is formed not from the operator's funds, but the percentage of burnt bets of participants.

Separation

This is a control tool that includes a program to disperse the company's key assets.

In gambling, these can be:

• separate bank accounts;
• backup information storage;
• different administrative centres to control network business points, etc.

Duplication

This is a casino risk evaluation program that includes mandatory data backup. Technical failures in the operation of a gaming site should not stop the entire business.

The casino manager can use:

• backup or emergency servers;
• urgent data recovery services;
• mirror websites, etc.

Diversification

A multi-level risk prevention program built on the allocation of business resources. With this approach, the loss of indicators in one of the directions will not cause irreparable damage to the project.

For example, under one brand, you can organise an autonomous website of slot machines, a sports betting point, a cyber arena, a poker room, and a live casino. Mobile services are launched and supervised separately.

The Main Things about Risk Management Tools in Gambling

• The starting point of work is the assessment of basic risks. The main threats are considered to be the deterioration of the brand's reputation and the decrease in user loyalty, changes in the policy of the gambling regulator, cyber-attacks, risks of data leakage, and violations of the rules of fair play.
• Operators are not limited in the choice of optimal strategies. These can be individual control systems for each of the company's divisions, risk assessment using the services of outsourcing companies, or the creation of a separate headquarters to work with potential threats.
• Depending on the type of gambling start-up, you can choose one or more risk control and potential threat minimisation tools: evasion, prevention, loss reduction, division, duplication or diversification of resources.

We have a full range of solutions for gambling projects of any format:

• individual business cases;
• security systems based on machine learning;
• reliable payment instruments;
• licences from the largest gambling regulators;
• gaming website administration services and much more.

We are in touch 24/7.