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ANNUAL REPORT 2013 18 PRINCIPAL RISKS AND UNCERTAINTIES Risk description Potential impact Mitigation ECONOMIC RISK - Customer base becomes less confident about their financial prospects Lower revenues and consequently profits • Customer retention programmes • Broader geographic spread of products • Migration of third party costs to be aligned with revenues REGULATORY RISK - Conflict between jurisdictions in which the customer resides and where the service is provided - Risk of criminal, civil and administrative enforcement action in jurisdictions where the Group generates the business Reduction in market size • Diversified product portfolio • Strict adherence to the laws of the jurisdiction in which the service is provided • Close monitoring of regulatory developments and assessment of their longer-term impact FINANCIAL - Foreign exchange risks - Withdrawal of payment processing facilities Lower or more volatile profits Short-term interruption of funds deposited by customers • Group tries to match its income and cost exposures to create a natural hedge • Regular evaluation of low cost hedging opportunities • Multiple payment processing methods used by the Group OPERATIONAL - Dependence on third party software - Dependence on key personnel Reduction of revenue streams GVC's CasinoClub website is highly dependent on Boss Media with whom it has a longterm contract Interruption of business continuity and loss of corporate knowledge • Long-term contracts entered into with suppliers of a good financial covenant • In some cases it is not practicable to mitigate the software reliance risk without significant business and economic disruption • Broader base of Executives below Board level