Ladbrokes PLC - Risk management

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Key risks are reviewed by the Board of Ladbrokes plc on a regular basis and, where appropriate, actions are taken to mitigate the risks that are identified.

The following are considered to be the key risks faced by the Group. The risks listed do not necessarily comprise all those associated with the Group, and are not set out in any order of priority. Additional risks not presently known to the Group, or that the Group currently deem immaterial, may also have an adverse effect on its business.

Details on the governance arrangements by which risks are monitored and managed are set out in the Corporate governance section.

Risk Type	Description	Risk management

Market risk	Economic, consumer and environmental factors within key markets reducing customers' disposable income. Changing consumer trends and opportunities for betting and gaming. Competition from existing competitors or new entrants.	Performance is continuously monitored and, where appropriate, operational changes are instituted in response to the trading environment, including in relation to marketing, product development, yield management, cost control and investment.
Industry/regulatory /legislative risk	Regulatory, legislative and fiscal regimes for betting and gaming in key markets around the world can change, sometimes at short notice. Such changes could benefit or have an adverse effect on the Group's results and additional costs might be incurred in order to comply with any new laws or regulations. Costs in relation to the financing of the UK horseracing industry.	Legislative and regulatory developments in all key markets are monitored closely, allowing the Group to quickly assess and adapt to changes in the environment and minimise risks to the business. In the UK, the Group continues to work closely with the Gambling Commission and the relevant trade organisations in order to influence change as it occurs.
Bookmaking risk	Revenue and operating results may vary significantly from period to period. Customer betting patterns, particularly with regard to those who bet large stakes, the outcome of individual events or a prolonged period of good or bad results could have a material effect on results.	The Group's core expertise is risk management and through its history, it has developed the skills and systems to be able to offer the breadth of betting opportunities and to accept large bets across the range. The Group has in place a highly experienced trading team.
Technology risk	A failure in the infrastructure and operation of core systems could have an adverse impact on operations and financial results. The integrity and availability of systems is vital to deliver a high quality service to customers.	Advanced security systems are deployed to protect all personal, financial and transactional data. Sophisticated hardware and security mechanisms are used, ensuring all sensitive and confidential data is fully encrypted. To ensure fail-safe integrity of all data, a series of storage systems replicate all data processed by our online services. Technology, infrastructure and communication systems, as well as application systems are regularly updated. Rigorous testing regimes are utilised to ensure the continued high quality of our products and services is maintained. Infrastructure suppliers, network and telecommunication suppliers and application service suppliers are long-term partners in providing an infrastructure which seeks to ensure the delivery of sophisticated, high performance transaction processing systems.
Financing risk	Availability of debt financing and the costs of borrowing.	The Group has a staggered debt maturity profile to reduce re-financing risk and actively monitors the debt markets to be able to raise debt as appropriate.