2011annual report

AB Svenska Spel Head OfficeSE-621 80 VisbyVisiting address: Norra Hansegatan 17, VisbyTel +46 (0)498-26 35 00Fax +46 (0)498-26 36 30

AB Svenska SpelSE-106 10 StockholmVisiting address: Sturegatan 11, SundbybergTel +46 (0)8-757 77 00Fax +46 (0)8-98 25 98

Svenska Spel’s Customer ServiceOpen 24 hours each dayTelephone +46 (0)770-11 11 11 (local call cost)Internet: Contact formPostal address: Svenska Spel, Kundservice, SE-621 80 [email protected] +46 (0)498-26 35 34

Svenska Spel on the Internetwww.svenskaspel.sewww.facebook.com/SvenskaspelNewsroom: media.svenskaspel.setwitter.com/svenskaspelblogg.svenskaspel.se

Casino Cosmopolwww.casinocosmopol.se

STOCKHOLM

Visiting address: Kungsgatan 65Tel +46 (0)8-781 88 [email protected]

GOTHENBURG

Visiting address: Packhusplatsen 7Tel +46 (0)31-333 55 [email protected]

MALMÖ

Visiting address: Slottsgatan 33Tel +46 (0)40-664 18 [email protected]

SUNDSVALL

Visiting address: Casinoparken 1Tel +46 (0)60-14 11 [email protected]

Playscan ABwww.playscan.comVisiting address: Sankt Eriksgatan 3, Gothenburg

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2011annual Report

terms and definitions:Financial termsEarnings per share Profit for the year divided by the average number of shares outstanding.

Equity ratio Equity including minority as a percentage of total assets.

Gross gaming revenue Revenue for all games and lotteries during the period, excluding stakes for multi-week games pertaining to future periods.

Net gaming revenue Gross gaming revenue less paid-out winnings.

Net revenue per employee Net revenue from gaming operations, etc., divided by the average number of employees.

Net sales from gaming operations, etc. Net gaming revenue less commissions to retailers and other revenue pertaining to gaming operations.

Operating margin Operating profit after depreci-ation and amortisation as a percentage of total revenue.

Profit (surplus) The profit is that part of Svenska Spel’s revenue that remains after paid-out winnings and deduction of costs for Svenska Spel’s administration. A portion of the profit from Penninglotten is paid to cultural projects. The remainder is paid to the public treasury.

Solberg • Printing: Elanders • Photos: Olof Holdar, Maja Suslin, Bildbyrån and others. Cover photo taken by Jennifer Nemie and shows the trophy that the prize-winning retailer receives at Svenska Spel’s annual Retailer Gala. Translation: The Bugli Company AB.

Other termsBusiness partners Restaurants and bingo halls offering gaming on Vegas VLTs in premises in partnership with Svenska Spel.

Corporate Social Responsibility (CSR) A concept that involves companies voluntarily integrating social and environmental consideration in their business operations and in conjunction with their stakeholders. CSR can be divided into seve-ral areas: Business ethics responsibility, Environ-mental responsibility, Social responsibility and Economic responsibility (Source: the European Commission).

Net gaming market The total known Swedish gaming market in SEK, based on the total net gaming revenue of gaming companies.

Net market share The total known Swedish gaming market in%, based on the total net gaming revenue of gaming companies.

Player base A term used in Svenska Spel’s gaming survey that refers to the total underlying num-ber of players.

PlayscanTM is a tool on svenskaspel.se designed to proactively prevent problem gaming by iden-tifying players at risk of developing gaming pro-blems in the future. Players who activate Play-scanTM are notified of any changes in their gaming behaviour.

Precautionary principle The precautionary prin-ciple, as expressed in Svenska Spel’s mandate, means that, when considering the introduction of new games or entering new markets, Svenska Spel shall take protective measures, observe the limitations and take the precautionary measures otherwise required to prevent, hinder or counter-act the risk of negative social consequences for consumers and society.

Promotion ban Section 54 of the Swedish Lotteries Act states that those who illegally and in professional activities, or otherwise for acquisitional purposes, intentionally promote in a lottery arranged outside Sweden, and if such promotion pertains to participation from Sweden, may be fined or imprisoned for a maxi-mum of six months.

Rake In poker games – both at Casino Cosmopol and at svenskaspel.se – a fee is charged, which is referred to as the rake.

Responsible gaming tools Tools – such as PlayscanTM – that help customers to maintain control of their gaming.

Retailers The retail chains, department stores, grocery stores, petrol stations, etc., that sell Svenska Spel’s games and lotteries under agreement.

Test purchases Svenska Spel contracts external suppliers to make anonymous customer visits to retailers and business partners to check compli-ance with the rules related to age limits and identification checks.

Financial Calendar 2012Annual General Meeting, 24 AprilSvenska Spel’s AGM will be held on Tuesday,24 April in Visby, Gotland.

Interim reports 2012January–March 24 April 2012January–June 23 July 2012January–September 24 October 2012Year-end report, January–December February 2013

SvenSka Spel annUal RepORT 2011 1

contents:

61

95

72011 in brief 2CeO’s commentary 4Four questions for the Chairman 5

Directors’ report 7SvenSka Spel GROUp Significant events in 2011 7 This is Svenska Spel 8 The Swedish gaming market 11Svenska Spel’s operations and structure 14 Strategic orientation and objectives 16Risks and risk management 22 Brand management 24Svenska Spel’s games 28Group financial results and position 34

SvenSka Spel’S BUSineSS aReaS 36Gaming & lotteries business area 37 vegas business area 40Casino Cosmopol business area 43

CORpORaTe GOveRnanCe RepORT 48Board of Directors 54executive management 56proposed distribution of profits 58events after balance sheet date 59

Financial statements 61GROUp Consolidated statement of comprehensive income 62 Consolidated balance sheet 63 Consolidated statements of cash flows 64 Consolidated statement of changes in equity 64

paRenT COMpanY income statement 65 Balance sheet 66 Statements of cash flow 68 Statement of changes in equity 68

nOTeS 69

Board signatures 92 auditors’ report 93Five-year summary 94

CsR report 95Commentary of the CeO and CSR Manager 96 long-term sustainable development 97 Stakeholder expectations 101Social responsibility and responsible gaming 103Responsibility for employees 112economic responsibility 116environmental responsibility 119

Comments on the CSR Report 122Svenska Spel’s GRi profile 123Board signatures 130auditor’s Combined assurance Report 131

TeRMS anD DeFiniTiOnS 133

Pages 95–132 CsR Report(Corporate Social Responsibility)Svenska Spel’s CSR Report along with the Combined Statement of Conformity is published for the fifth year, see pages 95–132. The report was prepared in accordance with the Global Reporting Initiative (GRI), level C+. Unless otherwise stated, all amounts are in SEK million. Information in parentheses refers to the preceding year.

Pages 7–94 Annual ReportThe Board and CEO of AB Svenska Spel, corporate registration number 556460-1812, with its registered office in Visby, hereby submit the Annual Report and the Consolidated Financial Statements for the financial year 1 January–31 December 2011, as presented on pages 7–94. The Corporate Governance Report is an integral part of the Company’s Directors’ Report. Unless otherwise stated, all amounts are in SEK million. Information in parentheses refers to the preceding year.

2 SvenSka Spel annUal RepORT 2011

2011 in brief

Svenska Spel including Casino Cosmopol and Poker 9,687 MSEK (9,624)

ATG Horse racing, 3,910 MSEK (3,813)

NGO games and lotteries, 3,484 MSEK (3,200)

Foreign Internet companies, 2,217 MSEK (1,900)

Restaurant casinos, 218 MSEK (217)

The swedish gaming market *Net gaming revenue 2011

Svenska Spel including Casino Cosmopol and Poker, 50%

ATG Horse racing, 20%

NGO games and lotteries, 18%

Foreign Internet companies, 11%

Restaurant casinos, 1%

Net market share 2011

* Refers to the total known market in Sweden. Source: Preliminary statistics from the Swedish Gaming Board and Svenska Spel’s estimates of the net gaming revenue of foreign Internet companies. These sources estimate the size of the total Swedish net gaming market to have been approximately SEK 19,500 million (18,600). 2010 figures in parentheses.

Key data, svenska spelGroup, Sek million 2011 2010

Gross gaming revenue 22,284 21,751

Net gaming revenue, total 9,687 9,624

Net sales from gaming operations, etc. 7,919 7,885

Operating profit 4,940 4,795

Operating margin, % 21.9 21.8

Income for the year 5,007 4,766

Average number of employees 1,774 1,764

Cooperation with “Foppa” The renowned Swedish ice-hockey player, Peter “Foppa” Forsberg signed a cooperation agreement with Svenska Spel. His role is to strengthen Svenska Spel’s commitment to Swedisk sports.

Read more about svenska spel’s brand programmes and sponsorship on page 25.

TV commercials for Triss were awarded two Silver Lions at the Cannes Lions International Advertising Festival. A commercial for Lotto was nominated for the Swedish Guldägget (Golden Egg) award in 2011.

Read more about branding programmes on page 24.

Noteworthy marketing

Triss and Oddset celebrated their 25th anniversary and remain among Sweden’s largest and most popular games. The largest contributors to net gaming revenues was the Vegas game, which celebrated its 15th year. Casino Cosmopol marked its tenth birthday at the Sundsvall Casino, the very first casino in Sweden.

Read more about the games on page 28.

High profile anniversaries


Lennart Käll, new President and CEO, and Anitra Steen, new Chairman.

Efforts to integrate responsibility and sustainability issues throughout operations continued in 2011.

• Svenska Spel’s Spelkort customer card marked its 10th anniversary. A great deal of the responsible gaming programmes aimed at customers in stores and on the website svenskaspel.se are based on the card.

• A new central system for Vegas VLTs was commissioned. In the long run, this will permit responsible gaming tools to be linked up to the customer card for Vegas customers.

• The Vegas business area launched a new responsible gaming training programme for its business partners.

• The subsidiary Playscan AB, which provides the responsible gaming tool, PlayscanTM, has now signed an agreement with A-lotterierna having previously had contracts with Miljon-lotteriet, La Française des Jeux, Finland-

Continuing work for long-term sustainability

New President and new ChairmanAt the AGM in April 2011, Anitra Steen was elected as Chairman of Svenska Spel. On 12 September, Lennart Käll took up his position of President and CEO.

Read the CEo’s Commentary and interview with the Chairman on pages 4–5.

Debate gathers intensityThe debate on the re-regulation of the Swedish gaming market intensified during the year.

Read about the swedish gaming market on page 11.

based Ray and the Canadian Atlantic Lottery. PlayscanTM was upgraded during 2011 for the svenskaspel.se site and now has 53,844 users (47,000).

• 85% approved test purchases at Vegas business partners. The result for retailers was 84%, while the lottery retailers, who since 2010 have been compelled to demand identification for the purchase of lottery tickets, have not yet attained equally posi-tive results.

• Casino Cosmopol’s responsible gaming programmes continued to focus on young guests in the 20–24 age group during the year.

• Renewable energy was introduced in Casino Cosmopol’s premises in Malmö and is now available in all Svenska Spel’s properties.

The CsR (Corporate social Responsibility Report) for 2011 is available on pages 95–129 and at svenskaspel.se.

sEK 5,007 million for the swedish TreasurySvenska Spel’s surplus of SEK 5,007 million (4,766) is paid to the State, representing an increase of 5.0% compared with 2010, and the third best result ever.

Mobile trendsThe mobile web m.svenskaspel.se, offering gaming on the Oddset Live and Mixen games, was extended with the opportunity for customers to open an account, transfer money and play Lotto. The Svenska Spel Målservice (scores service) application was also developed for Android, whose customers ranked it as the “best free app”.

Read about the games on page 28.


CEO’S COMMENTARY

A new and clear course2011 was an eventful year, which in many ways entailed a new beginning for Svenska Spel. We launched a new vision, new values and a new brand platform – a clear founda-tion that places the customer and the future in focus. We experienced a strong launch and we are bringing this positive energy with us as we now move the Company forward.

hen I first joined the Company,

I listened and learned about the

Company’s mission, situation,

market, product portfolio and cus-

tomer offering. I travelled to our

neigh bouring countries to learn

more about how to work with gaming and gained valuable

know ledge and inspiration. I also conducted many dialogues

with the Board and our owners to attain a clear impression

of their view of Svenska Spel and our challenges.

We must face the competition

Svenska Spel has a mission that calls for our responsibility

for and care of our customers to take priority over profit

maximisation. Our vision is for gaming to provide enjoyment

for all, which is the foundation for our company. However,

continuing to take responsibility and shaping a sound and

safe gaming market requires us to constitute a substantial

share of that market.

To continue to maintain our market share and develop our

offering, we must face the forcefully increasing competition,

in terms of the regulated market, foreign unregulated online

companies and illegal companies that do not comply with

the same terms and conditions and regulatory framework as

Svenska Spel.

In reviewing the results for 2011, a great deal is progressing

in the right direction: our revenue increased and our costs

decreased. Net gaming revenue rose SEK 63 million year-on-

year and all business areas reported higher operating profit

than in 2010. Earnings for the full-year – the third best ever

– rose by SEK 240 million, in part as a result of our focus on

cost efficiency in the Company during the year.

We delivered strong earnings and we should be proud of

this. However, despite this, we did not manage to grow at the

same rate as the market – we lost market shares. Accordingly,

our major challenge remains. We must reverse the declining

trend to enable us to achieve our mission successfully. The

market shares differ between our various products and chan-

nels. In certain product categories, such as sports games and

digital platforms, we lost shares, while we maintain a mono-

poly in casinos and slot machines.

We have laid the foundation for the future

During the autumn, we took several key steps toward tomor-

row’s Svenska Spel. We launched a new vision and new

corporate values, which provide energy in our daily work

and help us envision the goal ahead of us. We must continue

to build long-term relationships with our customers and

make it easier to choose us by being accessible, considerate

and committed. We will deliver attractive games and always

go the extra mile for our customers, business partners and

colleagues.

We also created a brand platform that enables us to more

clearly shape our offering and prioritise the activities on which

W

We are assigning the necessary priorities to stand strong ahead.“


How do you view your first year as Svenska Spel’s Chairman? “I was very pleased to be asked if I would accept the assignment. I was attracted by the challenge and am able to utilise my experi-ence from, for example, Systembolaget (Swedish alcohol monopoly). One of Svenska Spel’s challenges is to satisfy customer requirements in the form of stimulating games, while also offering responsible gaming tools for the customers in order to minimise risks. We’re also subject to gaming regulations that fail to progress in pace with reality. To date, my expectations regarding the assignment have been realised.”

How is Svenska Spel’s market role impacted by the gaming regulations? “Svenska Spel fulfils a key market role, especially when it involves accepting responsibility for social considerations. Updated gaming regulations would facilitate our efforts, since development has rapidly outpaced the current regulatory system. In this context, the Swedish Supreme Court’s decision during the autumn was wel-comed. It decided that gaming via slot machines located in Sweden must be viewed as being arranged here, irrespective of where the servers are located. This permits the Swedish Gaming Board to act more aggressively in removing illegal gaming machines, which is a positive development.”

How should Svenska Spel balance responsibility with profit?“I see no contradiction between responsibility and profit. Ultimately, it involves our product range and the manner in which we help customers to keep an eye on the situation and their gaming. We view responsibility as part of our customer offering. Personally, I feel they go hand in hand.”

What do you wish to see in terms of the regulatory system on the Swedish gaming market?“Discussions among politicians regarding the need for re-regulation creates uncertainty for the future. Denmark has opted for a form involving a large number of licensed gaming companies. I believe that the Danes face a tough time, with aggressive marketing and growing gaming problems. On the other hand, the Norwegians and Finns have decided to tighten regulations, while in Sweden we could easily move in the same direction. This would increase the potential to develop consumer-friendly offerings, with due consid-eration of the individual.”

4 questions for Anitra steen, Chairman

we must focus based on what our customers want. In other

words, the journey has begun – which we are sure that our

customers and the market will notice moving forward.

We must accelerate and slow down

We have concluded that we are in a negative spiral – which is

why we must act now. It is a matter of being able to say that

we saw the warning signs in time five years from now, that

we were awake, listened to our customers and enacted the

necessary changes.

Our position in the market will be dependent on a clear

organisation that possesses the drive and ability to adapt its

operations to market conditions, technological advances and

customers’ needs. To achieve this, we must simultaneously

accelerate and slow down. Based on our goals and the

market’s expectations, we must prioritise so that we can

spend more resources where they make the greatest differ-

ence for the customer. This entails reinforcing certain areas

of the operations and cutting back in others.

We are assigning the necessary priorities to stand strong

ahead – regardless of the situations that arise. We must invest

more in customer meetings and focus more on developing

attractive games that customers demand – modern and dig-

ital games, image-enhancing games, and effective responsi-

ble gaming measures. We have begun to build the next

generation’s digital platform, whereby we responsibly raise

the customer experience to an entirely new level.

We shall always be the customer’s best alternative

Many opt for gaming with us because it feels safe and be -

cause we offer the tools to personally be in control of their

gaming. This gives us a competitive advantage that we want

to maintain and strengthen. By being proactive and working

more closely on research, we will continue to strive to be at

the forefront in our responsible gaming. We will also further

improve at showing our commitment and contributing our

knowledge and experiences in the public debate.

As you can see, we have an exciting time ahead of us.

We have a new situation in the market, which we must face

with innovation and drive. Naturally, this is all made possible

by Svenska Spel’s proficient employees, whose efforts I am

proud of and grateful for. Together, we will demonstrate what

Svenska Spel represents and continue to offer our customers

games that provide enjoyment and excitement in their every-

day lives.

Visby, February 2012

Lennart Käll, President and CEO


FöRVALTNINGSBERäTTELSE / DEN

svenska spel in brief• Svenska Spel is Sweden’s only wholly

State-owned gaming company.

• Svenska Spel arranges sports betting, number games and lotteries via retailers, subscriptions, mobile phones and on svenskaspel.se, as well as gaming on Vegas VLTs in restaurants and bingo halls. The Group includes Casino Cosmopol AB which runs Sweden’s four international casinos in Stockholm, Gothenburg, Malmö and Sundsvall. The Playscan AB subsidiary pursues the development and sale of the responsible gaming tool PlayscanTM.

• The gaming offering includes a number of well-known brands such as Triss, Lotto, Oddset and Stryktipset.

• In 2011, Svenska Spel paid out winnings amounting to some SEK 12 billion (exclud-ing Casino Cosmopol), transforming 350 customers into millionaires during the year.

• The Company is Sweden’s major sports sponsor, and the main sponsor of football, ice hockey and other sports.

• Svenska Spel’s surplus is utilised as prescri-bed by the Government. In 2011, the surplus totalled SEK 5,007 million.


Directors’ Reportsvenska spel Group The Board and CeO of aB Svenska Spel, corporate registration number 556460-1812, with its registered office in visby, hereby submit the annual Report and the Consolidated Financial Statements for the financial year 1 January–31 December 2011, as presented on pages 7–92 and page 94.

New ChairmanAt the Annual General Meeting on 19 April, Anitra Steen was appointed the new Chairman of the Board of AB Svenska Spel. Anitra Steen was formerly the Managing Director of System-bolaget, Director-General of the Swedish Tax Agency and the Swedish Agency for Higher Education Services, as well as a State Secretary in the Government Offices of Sweden.

New CEoIn May, the Board appointed Lennart Käll as the new President and CEO of AB Svenska Spel. Lennart Käll, who was previously President of Wasa Kredit, CEO of Ticket Travel Group, Presi-dent of ICA Bank and President of SEB Finans, assumed his position at AB Svenska Spel on 12 September.

Competition-impeding restaurant operationsThe Swedish Competition Authority pursued a case against Casino Cosmopol concerning competition-impeding restaurant operations, although it decided to dismiss the case in January 2011 as a result of Casino Cosmopol presenting an action plan.

lotto’s commercials nominated for Guldägg (Golden Egg)Lotto’s commercials, featuring the rock group Kiss, were nominated for the Golden Egg in the film category, in Sweden’s largest and oldest competition for creative communications.

Expanded mobile telephone applicationIn March, Svenska Spel launched an updated version of the Score and result service iPhone application. The application offers an expanded score and result service for more products and a direct portal to Svenska Spel’s website for the mobile telephone: m.svenskaspel.se. Svenska Spel’s customers are now offered sev-eral of Svenska Spel’s games in their mobile telephones.

Peter “Foppa” Forsberg ambassador for svenska spelDuring the fourth quarter, the hockey legend Peter “Foppa” Forsberg, was appointed as a new ambassador for Svenska Spel. Forsberg will be part of a training programme spon-sored by Svenska Spel for ice-hockey coaches in junior and youth teams, thus supporting Svenska Spel’s commitment to Swedish sports.

significant events in 2011Embezzlement at Casino Cosmopolin GothenburgThe internal controls under Svenska Spel’s security procedures proved that they function as intended when eight individuals were arrested and detained, suspected of grand embezzlement. Seven of the detainees were employees of Casino Cosmopol in Gothenburg and have been dismissed.

Judgments in cases concerning slot machinesIn two cases on 18 December 2011, the Swedish Supreme Court ruled that Svenska Spel’s slot machines are the only legal machines in Sweden.

Advancement of responsible gamingThe responsible gaming tool PlayscanTM was upgraded and customers are now offered an even better tool to monitor their gaming at svenskaspel.se. The tool is primarily aimed at protecting consumers from developing gam-bling addiction. Accordingly, the company has changed its sales strategy to enable private foreign companies that conduct cross-border gaming operations under the permission of foreign authorities to offer the tool to their customers.


DIRECTORS’ REPORT / THIS IS SVENSKA SPEL

Gaming shall offer enjoyment

Vision Gaming shall be enjoyed by all!

svenska spel’s mandate

aB Svenska Spel is to arrange gaming and lotteries under licence from the Government.

aB Svenska Spel is to respond to consumer interest in terms of offering a reliable alterna-tive to illegal gaming operations.

a broad service is to be provided both in urban and rural areas.

Social considerations are to be prioritised in the development of gaming forms and in the business as a whole.

The risk of fraud and illegal gaming is also to be observed.

Security in gaming management is to be maximised.

Regulators should be able to maintain efficient and independent control.

aB Svenska Spel must adopt a prudent approach to new games and new markets.

The Company is to maintain a responsible marketing approach that reflects social commit-ment and prevents it being perceived as overly assertive.

The business is to be run cost-efficiently within the confines of the Company’s mandate.

MissionWe develop and offer gaming in a responsible manner so that the many people who use our products experience gaming enjoyment.


Gaming shall offer enjoyment

Values:We at svenska spel are accessible …We listen to our customers and each other and develop long-term relations. We make it easy for our customers to select us by delivering the right games, at the right time and through the right channels. We contribute to the customer’s overall experience by combining presence, speed and personal service. We offer help when a colleague – irrespective of location or department – needs our competence in solving a task.

… and committedWe love excitement and dreams, and are passionate about delivering attractive games that offer enjoyment for everyone. To meet future competition and customer requirements, we ensure that innovative thinking, professionalism and effective implementation permeate all our work. We’re generous with our enthusiasm, endurance and driving power – we offer our customers and each other that little extra. We seek inspiring leadership that promotes motivation and personal development.

… considerate …We care for our customers and work conscientiously to offer secure, readily accessed gaming enjoyment. We are proud of our mandate and put responsibility before profit maximisation. We treat our environment – both internally and externally – with openness, respect and trust.


63% of Swedes are explicitly positive to Svenska Spel.Source: Svenska Spel’s image tracking 2011.

73%of the 18–75 age group are customers of Svenska Spel.Source: Svenska Spel’s 2011 gaming survey.


The swedish gaming market The number of gaming companies on the Swedish market has increased in recent years in pace with technological progress. Svenska Spel competes both with Swedish regulated gaming companies and foreign gaming companies – and an illegal market.

istorically, the Swedish gaming market has

been relatively insensitive to macroeconomic

fluctuations. This was also the case in 2011,

when gaming increased despite the prevail-

ing global financial turbulence. Growth is

likely to continue in the foreseeable future,

though perhaps at a slightly slower rate.

social consideration lays the basis for regulation

According to Swedish law, it is essentially illegal to organise

gaming for monetary gain for the general public. However,

in a bid to restrain illegal gaming, the State has granted

exemptions for a number of gaming companies, for reasons of

social consideration, whose operations are strictly controlled

through, for example, the Lotteries Act. The Swedish Gaming

Board has overall responsibility for the control and supervision

of gaming and lottery activities

Competitive situation

The known Swedish gaming market consists of regulated,

nationwide gaming companies and foreign gaming companies

with cross-border operations. The wholly State-owned com-

pany Svenska Spel; the State-controlled horse racing organisa-

tion, AB Trav och Galopp (ATG); NGO gaming activities, plus

bingo halls and PostkodLotteriet, the A-lotteries and Miljon-

lotteriet are the major Swedish gaming companies. There are

also private operators of restaurant casinos, but they account

only for a very minor market share.

There are hundreds of Internet gaming companies targeting

Swedish players, such as Ladbrokes of the UK, based in Gibraltar,

and Unibet, Expekt and Betsson, which are based in Malta.

Foreign Internet companies are not covered by the legislation

and restrictions for the gaming companies subject to Swedish

regulations. None theless, they compete with the regulated

gaming com panies offering similar games: poker, horse racing,

bingo, sports games, number games and lotteries. Moreover,

there are numerous casinos on the Internet with a wide-rang-

ing offering of slot machines, and table games – games that

are strictly reserved for restaurant casinos and Svenska Spel’s

casinos and Vegas VLTs.

Unknown illegal market

In parallel with the known gaming market, there is an unknown

illegal market with gaming machines and gaming clubs operat-

ing without a permit. An assessment by the Swedish Gaming

Board indicates that there are thousands of illegal gaming

machines nationwide that have a combined turn over amount-

ing to several billion annually. Police crackdowns are conducted

every year and machines confiscated, but to date such meas-

ures have proved insufficient in halting illegal operations.

swedish supreme Court establishes precedent for practice

A decision by the Supreme Court established that a licence for

arranging gaming on VLTs could essentially be granted solely

to Svenska Spel. The decision made clear that only Svenska

Spel’s VLTs are to be available on the market. Following several

years of uncertain practice, the legal authorities now have the

support to act against illegal slot machines.

The Supreme Court adopted a definite position regarding

what are referred to as the two EMV cases, which involved

gaming machines connected via the Internet to a server out-

side Sweden. The cases involved two issues of principle. One

issue was whether the machines should be viewed as slot

machines or whether it was a matter of Internet-based gaming

(virtual lottery). The other case involved whether this gaming

should be viewed as being arranged in Sweden or abroad.

H

>>


In its decision, the Supreme Court established that machines

and games for monetary gain that were linked to a server

abroad represent slot machines pursuant to the Lottery Act.

The slot machine gaming was viewed as being arranged in

Sweden. The decision entailed that the gaming machines

are illegal, since they lack a permit.

The debate intensifies

Over a number of years, there has been a need to adjust

gaming market regulations to reality. 2008 saw the appearance

of the “Future Gaming Regulation ” report, which had been

initiated by the Government. The report has not led to any

decisions. During the past year, spokespersons for the various

political parties agreed that at least parts of the Swedish gam-

ing market should be opened up to foreign gaming compa-

nies. They note the deregulation process in other European

countries, notably Denmark.

Svenska Spel believes that far too little is said about the core

of Swedish gaming policy – that social consideration should be

in the foreground – and questions the need for a new gaming

policy. What is required is greater focus on the gaming policy

objectives established by the Swedish Parliament, and more

effective sanctions against regulatory breaches.

swedish National Audit office to study the gaming market

In March 2011, the Swedish Audit Office decided to conduct a

review of the State’s role in the gaming market. The review is

expected to be completed in May 2012. This is aimed at exam-

ining the Government’s current gaming regulations and the

organisation of the State’s undertakings so that Parliament’s

goal of a sound and secure gaming market can be attained in

an effective manner.

Deregulation and monopoly

The EU Court established that each member state shall itself

determine the form of regulation. Licencing systems or more

restrictive regulation, such as a monopoly, are thus permissible.

As a result, the legal trend in the European gaming market is

developing in different directions. In some countries, such

as Norway and Finland, efforts are being made to retain a

monopoly or strictly regulated markets.

In other countries, such as Denmark, Italy, France and

Belgium, deregulation has been conducted and a system

introduced that involves the purchase of licences and special

tax rules for licensed gaming companies. This offers a favoura-

ble situation for major gaming companies to acquire or merge

with small companies that lack the resources to invest in the

license system.

The European Parliament proposes national regulation for

gaming companies and a system in which European gaming

companies can gain licenses and be blacklisted. This applies in

particular to Internet gaming as part of efforts to prevent crime

and gambling addiction. There is also a desire to have a com-

mon system to ring-fence tax receipts and combat organised

crime.

Increased revenue from a shrinking player base

Over a five-year period, Svenska Spel’s market share in the

known Swedish gaming market has declined from 56% to 50%.

This is the result of competition and the restrictive issuance

of permits to Svenska Spel, but also to a certain extent as the

result of the responsible gaming programmes pursued by

Svenska Spel, which have adversely impacted on gaming

revenue.

The gaming market is growing in absolute terms while the

player base is contracting: fewer players are playing more. In

2011, net gaming revenue for the regulated Swedish gaming

companies totalled SEK 17,299 million (16,673) according the

Swedish Gaming Board’s annual estimates. Adding the net

gaming revenue – approximately SEK 2,200 million (some SEK

1,900) according to Svenska Spel’s estimate – the total known

Swedish gaming market in 2011 amounted to some SEK 19,500

million (18,600).

Overall, Svenska Spel is the market leader with a market share

of 50% (52); ATG accounts for 20% (21); and other regulated

gaming companies have raised their market share to 19% (17),

primarily due to the success of PostkodLotteriet (Post Code

Lottery). According to Svenska Spel’s estimates, foreign Internet

companies have a market share of about 11% (approx. 10).

For Internet-based gaming, Svenska Spel has a net market

share of 25% (27), ATG 29% (29), NGO games and lotteries hold

1% (1) and foreign-based Internet com panies 45% (43).

DIRECTORS’ REPORT / THE SWEDISH GAMING MARKET

sweden’s neighbourshave different approaches to their gaming markets:

• In Finland and Norway efforts are in progress to retain the monopoly or strictly regulated markets.

• In Denmark, the market has been opened for a licence-based system, with special requirements in terms of taxes, surcharges, marketing and financial contributions for the treatment of gambling addiction.


Data on the regulated swedish gaming market

Svenska Spel, including Casino Cosmopol and Poker 56%

Restaurant casinos 1%

NGO games and lotteries 20%

ATG 23%

The regulated Swedish net gaming market, 2011

Svenska Spel, including Casino Cosmopol and Poker 50%

ATG 20%

NGO games and lotteries 18%

Total, confirmed Swedish net gaming market, 2011

Foreign Internet companies 11%

Restaurant casinos 1%

50

40

30

20

10

0

%

Net market share, Internet, 2007–2011

svenskaspel.se

atg.se

Foreign Internet companies

bingolotto.se

2007 2008 2009 2010 2011

Source: The graph is based on actual net gaming revenue from Svenska Spel, ATG, NGOs and estimated net gaming revenue of foreign Internet companies. The estimates for foreign Internet companies’ net gaming revenue are based largely on Svenska Spel’s regular market analysis.

The regulated swedish net gaming market

net gaming revenue, Sek million 2011 2010 2009 2008 2007

Svenska Spel1 9,687 9,624 9,889 9,771 9,594

ATG 3,910 3,812 3,776 3,544 3,521

Restaurant casinos2 218 216 228 245 208

NGO games and lotteries3 3,484 3,021 2,793 2,411 2,426

Total 17,299 16,673 16,686 15,971 15,749

1. The Swedish Gaming Board shows net gaming revenue from bingo games in Svenska Spel’s Bingo-Live halls for the period 2007–2009 under NGO games and lotteries/Bingo.

2. There is a low response frequency from surveyed restaurant casino operators, which means the information on restaurant casino gaming is not as reliable as other areas.

3. NGO games and lotteries include: Bingo, national lotteries (e.g. PostkodLotteriet, Folkspel, Miljonlotteriet, A-lotterierna), regional lotteries, local lotteries.

Source: Swedish Gaming Board. 2011 values are preliminary or estimated.

Source: Preliminary statistics from the Swedish Gaming Board.

The ten major games in sweden4

net gaming revenue,Sek million 2011 2010 2009 2008 2007

Vegas 2,083 2,039 2,081 2,011 1,928

PostkodLotteriet5 1,773 1,590 1,266 961 677

V75 1,726 1,647 1,660 1,490 1,502

Triss 1,640 1,621 1,682 1,682 1,672

Lotto 1,625 1,610 1,585 1,462 1,393

Casino Cosmopol 1,203 1,190 1,198 1,224 1,153

Oddset 813 790 766 704 716

Keno 585 603 626 631 590

Joker 513 496 478 456 437

Dagens Dubbel 428 443 456 478 497

4. Net gaming revenue reported, that is after the pay-out of winnings.5. Since the Gaming Board for Sweden only has gross data for PostkodLotteriet in 2011,

Svenska Spel has only calculated net gaming revenues following the same deductions for paid winnings in 2010, meaning 40%.

Source: Preliminary statistics from the Swedish Gaming Board and Svenska Spel’s estimates of the net gaming revenue of foreign Internet companies.


svenska spel’s legal structure

AB Svenska Spel556460-1812

Casino Cosmopol AB556485-4296

Svenska Spels Förvaltnings AB

556597-7278

AB Svenska SpelsServicecenter556240-7881

Playscan AB556801-1935

CC Casino Restaurang AB

556586-7016

Casino CosmopolsFastighets AB556598-3409

AB Svenska SpelsInternetservice

556485-4320

svenska spel’s operational structure*Applies from February 2012

DIRECTORS’ REPORT / OPERATIONS AND STRUCTURE

CEO

Internal audit

Parent brand

Strategy

Risk manager and Compliance

Projects

Svenska Spel’s Board of Directors

Chairman of the Board

Result area Sports Games & Lotteries

Result areaCasino Cosmopol

Result areaVegas

Finance & Security

Legal

Communication and CSR

HR

IT

* Units with broken lines report directly to the CEO, but organisationally, are included in one of the staffs. The new organisation includes three result areas, which were called business areas in the 2011 organisation. In the 2011 Annual Report, the expression ”business areas” is used. In 2011, the organisation comprised the three business areas, two operational areas and four staffs.


svenska spel’s operations and structure

legal and operational structure

Svenska Spel’s operations are based on the mandate from the owner, the Swedish State. During the year, the Company’s vision and values were reformulated. A new organisation applies from February 2012.

owner relationship AB Svenska Spel was founded in 1997 following a merger of AB Tipstjänst (established in 1934) and Svenska Penninglotteriet AB (formed in 1897), and is 100% owned by the Swedish State.

Articles of Association Svenska Spel’s Articles of Association state the business purpose as: “The Company’s business is, under licence from the Government, to arrange lotteries for money and bookmaking in conjunction with competitions and pursue other compatible operations.”

Current licences The Government issues various forms of licences to Svenska Spel. The applicable licences are as follows:

Lotteries and bookmaking at sporting eventsThe Government licensed AB Svenska Spel to arrange public lotteries and bookmaking for money for the period 1 January 2012 to 31 December 2013.

Video Lottery Terminals (VLTs) The Government licensed AB Svenska Spel to arrange public gaming on VLTs for the period 1 January 2012 to 31 December 2013.

Casino gaming The Government licensed AB Svenska Spel or its wholly owned subsidiaries to arrange public casino games including games as specified under section 6 of the Lotteries Act (1994:1000) for the period 1 January 2011 to 31 December 2013.

In addition, Svenska Spel has licence from 16 December 1999 applying to Locations for casino games.

Internet poker The Government licensed AB Svenska Spel or its wholly owned subsidiaries to arrange and provide poker gaming on the Internet for the period 1 January 2012 to 31 December 2013.

The owner’s financial requirements Section 4 of AB Svenska Spel’s Articles of Asso-ciation specifies that no dividend is to be made to shareholders when available profits are dis-tributed. All profit available for distribution is to be allocated as specified by the Government. The government licence for AB Svenska Spel to arrange lotteries states that as much of the Company’s profits as possible be loaned to the National Debt Office of the Swedish State during the financial year. Payments are to be made quarterly, not later than 30 April, 31 July, 31 October and 16 February. Profits available for distribution are to be offset against AB Svenska Spel’s receivables from the Swedish National Debt Office. Remaining profits available for distribution after the offset of receivables, statutory funding, allocations determined by Parliament and Government, and other generally accepted dispositions, are to be paid to the Swedish State.

The Svenska Spel Group comprises the Parent Company AB Svenska Spel and subsidiaries Svenska Spel’s Förvaltnings AB and CasinoCosmopol AB. Svenska Spel’s Förvaltnings AB forms a sub-group with the subsidiaries AB Svenska Spel’s Internetservice, Casino Cosmopols Fastighets AB, CC Casino Restau-rang AB, AB Svenska Spel’s Servicecenter and Playscan AB. In addition, there are a number of dormant companies, see Note 28 on page 91.

svenska spel’s organisation in 2011Changes in executive management during the year included the appointment of Lennart Käll as the new CEO and President in Septem-ber; Annika Ferm as Communication Manager in February and Mattias Mildenborn as interim Manager of the Gaming & Lotteries business area following the resignation of Håkan Sjöstrand in May 2011.

The organisation comprised three business areas, two operational areas and four staffs.

svenska spel’s organisation from February 2012A new operating structure applies as of Febru-ary 2012, in which the former business areas are named result areas and the former opera-tional areas of Development and Production were merged to form an IT unit.


strategic orientation and objectives Svenska Spel has four strategic target areas: Customers, Responsibility, Business-like approach and employees. Just as in the case of the vision and values, these are based on the owner’s mandate.

he plan for orientation, objectives and strate-

gies covers a three-year period. It is revised

annually and extended by one year for another

three-year period.

smooth customer interaction

Customer target area If customers are to select Svenska

Spel, the company must work continually in developing

activities in all dimensions. This is necessary in an effort to

channel customers from Svenska Spel’s competitors and also

to retain loyal customers. Younger generations are growing

up with new gaming habits, with technological progress

increasing accessibility. Svenska Spel shall offer enjoyable

and exciting games that meet customer demand.

Svenska Spel shall be a credible alternative to illegal gaming

activities, and the customer’s first choice in times in which the

range of gaming opportunities is greater than ever.

optimum responsibility

Responsibility target area Svenska Spel cares for its custom-

ers and assumes responsibility for ensuring that gaming

remains enjoyable. Customers shall perceive Svenska Spel

as the most responsible gaming company.

Svenska Spel seeks to be the most responsible alternative

on the market. Customers shall have a sound, mindful gam-

ing behaviour based on gaming enjoyment and excitement.

sound business-like approach

Business-like approach target area Svenska Spel shall

have a revenue-optimised and cost-effective operation.

Revenue optimisation always entails a trade-off between

increasing revenue to its maximum while also applying

the responsible gaming programmes required to ensure

that customers maintain a healthy gaming behaviour.

Operations shall be marked by high cost-efficency and

valued on the basis of a commercial perspective, but not

based on a revenue perspective alone.

Motivated employees

Employees target area Svenska Spel shall be an attractive

employer, offering excellent leadership, and with motivated

employees that perform to their best.

Professional and inspired leaders are required if Svenska

Spel is to succeed both in the gaming market and labour

market. Svenska Spel has a strong brand as an employer,

which can be further enhanced.

Employees must be aware of the applicable priorities. They

shall be aware of the mandate, values, strategies and targets,

as well as of their personal work role and responsibility. Work

satisfaction, creativity and well-being emerge when individu-

als strive to attain the same objective and are aware of and

understand the significance of their input. In this way, the

company can attract skilled employees.

DIRECTORS’ REPORT / STRATEGIC ORIENTATION AND OBJECTIVES

>>

T


>>

Identity requirementsCustomer security at retailers was enhanced in 2011 through, for example, the introduction of an identity requirement for winnings of more than SEK 1,000. So now, foresighted and informed customers take their ID card and Spelkort with them when they visit a retailer.


objectives and target fulfilment

Gaming represents enjoyment for adults, and thus Svenska

Spel has an age limit for all games. The best that Svenska

Spel can offer its customers is gaming enjoyment – it should

be fun whether you win or lose.

Customers target area: 63% positive

Svenska Spel’s annual gaming survey highlights customer

attitudes and behaviour. From 16 February to 21 April 2011, a

major postal survey was conducted using randomly selected

Swedes in the 16–75 group. The effective response frequency

was 52%, with the number of completed questionnaires

amounting to 5,131, representing a representative selection

of the adult population. Among other things, this survey

shows:

• 73% (74) are customers of Svenska Spel. The customer

base consists of 50% men and 50% women. Men play

more often and, generally, for higher stakes than women.

• The most common driving forces are the chance of gain-

ing a major win and the excitement of playing.

• Triss, Lotto and Stryktipset remain the leaders in terms of

positive image. The most negative image is associated

with casinos, Internet gaming and Vegas.


Svenska Spel’s Group management supports Swedish sports.

PlayscanTM

for gaming control Since 2009, the French gaming company La Française des Jeux has used the PlayscanTM responsible gaming tool, supplied by Svenska Spel’s subsidiary Playscan AB. During 2011, the tool was updated and now provides full support for customers for online gaming, sports betting, bingo, Lotto and lotteries. PlayscanTM helps customers to maintain control over their gaming and is used in Sweden by Svenska Spel, Miljonlotteriet and A-lotterierna.

According to Svenska Spel’s gaming surveys over the past six

years, the player base has steadily narrowed while customers’

average age has increased. That the known gaming market

nevertheless continued to grow during the same period was

because certain customers spend more money on gaming

than in the past.

In contrast to the overall gaming market, the number of

customers on svenskaspel.se has largely increased while the

average stake has decreased. This is a positive development

in view of the fact that svenskaspel.se is tasked with channel-

ling gaming from foreign sites.

Target fulfilment: Customers

The percentage positive to the Svenska Spel brand:

The target is 60% of the adult population; the result was

63% (64). (Source: Svenska Spel’s image tracking 2011).

Responsibility target area: Best responsible gaming

Svenska Spel seeks to strike a balance between gaming

revenue and responsibility.

One example of Svenska Spel’s sense of responsibility is

the outreach dialogues with frequent guests at the casinos,

requirements in terms of maximum transfers to gaming

accounts before a person can start playing on svenskaspel.se


Gaming research in Sweden is a recent area of research. Compared with alcohol and narcotics-dependence, little attention has been given to gaming problems.

In a bid to increase insight into gaming and develop measures to prevent gaming problems Svenska Spel in 2010 established a research council that distributes an annual SEK 5 million to research on gaming problems. In 2011 the research council granted funds to the work of three researchers.

The research council consists of experienced researchers and represent-atives from various societal interest groups. The council assesses incoming applications on the basis of scientific quality and social relevance. Read more in the CSR Report on page 118.

support for research

>>

and the age limits for the purchase and payout of winnings

on all games. Despite the expansion of the gaming market,

Svenska Spel’s gaming survey and the study undertaken by

Swedish National Institute of Public Health in 2010 show

that the proportion of customers with problems remained

unchanged during the past ten years, that is, 1–2%. However,

there has been a redistribution in the sense that problems

have increased particularly among young men in the 18–24

age group, while decreasing in other groups.

Sustainable development

For the fifth consecutive year, Svenska Spel is publishing its

CSR Report in line with the principles for GRI (Global Report-

ing Initiative), see page 95.

The report is prepared once annually as part of the annual

report. Reporting refers to the 2011 calendar year and covers

the Parent Company and subsidiaries. The previous report

(CSR Report 2010) was published in April 2011.

Svenska Spel’s responsibility programmes are also

described in the social responsibility report that the Swedish

Ministry of Finance requests on an annual basis.

The CSR Report describes Svenska Spel’s work in the focus

areas of:

• business ethics and security

• social responsibility and responsible gaming

• responsibility for employees

• economic responsibility

• environmental responsibility

Target fulfilment: Responsibility

Svenska Spel’s quarterly image surveys rank the Company as

the leader among gaming companies in Sweden in the area

of responsible gaming. More information about objectives

and their fulfilment in the Responsibility target area is pro-

vided in the CSR Report on page 110.

The chairman of the research council is Stefan Borg, senior lecturer at the Karolinska Institute and previously board member of Svenska Spel.



Business-like approach target area

To fulfil Svenska Spel’s efficiency assignment, the Company

proactively evaluates work processes in the organisation

to gain higher efficiency and cost savings in the optimal

manner. Another aim is to raise the quality of the decision-

making base in an effort to offer management greater

potential to set appropriate priorities

Target fulfilment: Business-like approach

The financial objectives governing the Company consist

primarily of the results budget set by the Board ahead of the

financial year. At the Board meeting after mid-year, a revision

of the annual budget is presented in the form of a forecast

extending to the end of the year.

Goal

Goal fulfilment

Sek million Budget Forecast Outcome

Net gaming revenue 9,718 9,598 9,687

Net sales from gaming operations, etc. 7,923 7,839 7,919

Employee expenses –1,026 –1,016 –1,011

Other operating expenses –2,041 –2,009 –1,968

Operating profit 4,856 4,814 4,940

Target area: Employees – high motivation

During 2011, the HR Staff unit improved the monitoring of

employee motivation, which was previously done via annual

employee surveys. Moreover, in 2011, three smaller quarterly

surveys were conducted in order to provide operations with

speedier linkage to changes in motivation and how work

progresses in an effort to follow up and strengthen motivation.

Some fifty managers have undergone the executive train-

ing course initiated in 2010, which included change leader-

ship. Casino Cosmopol followed up its successful internal

“World-class Hospitality” programme, with advanced devel-

opment as one of the ingredients for executives and

employees.

At year-end 2011, the number of employees totalled 2,199

(2,263). Recalculated as the average number of employees

during the year, the total was 1,774 (1,764). Distribution by

gender was 57% men (56) and 43% women (44). Svenska

Spel seeks variation in terms of gender and age, ethnic origin

and competence, as diversity contributes to better results

and, thus, a more business-like approach.

Pay is determined on the basis of working tasks, compe-

tency and performance. An annual salary review is made to

analyse and identify any deviations from the adopted guide-

lines. Appropriate action plans are drawn up if the analysis

points to the need for action measures. The annual employee

dialogue evaluates performance, and a development and

competency plan is prepared jointly by the employee and

manager. The dialogue is followed up on a six-month basis.

The health level, defined as the percentage of employees

who in the past 24 months had sickness absence of less than

3.5%, amounted to 70.0% (71.3). Sickness absence was 4.1%

(3.8). During 2011, a health programme was conducted that

gave priority to employees who competed in exercise

teams.

Target fulfilment: employees

ESI/Motivation index: Target of 85 on a scale of 100, result

86 (83).

Leadership index: Goal of 70 on a scale of 100, result 73 (70).

(Source: Svenska Spel’s employee surveys 2011.)

The CSR Report features additional information under the

section entitled “Responsibility for employees” on page 112.

Assessments for 2012

The key factors affecting Svenska Spel’s development poten-

tial during 2012 are deemed to be:

• Continuing growth in the overall gaming market.

• Stiffer competition with new gaming companies, constella-

tions and consolidations. International cooperation is a

strong trend.

• Continuing development of mobile-based gaming and

customer dialogue via social media.

• Responsible gaming and customer care are becoming

increasingly crucial for the brand.

• Nationwide accessibility is one of Svenska Spel’s major

assets. The relationship with retailers and business

partners shall continue to be fostered and developed,

along with a focus on svenskaspel.se and mobile-based

gaming.


svenska spel’s surplus in 2011amounted to SEK 5,007 million, which is paid to the Swedish State and thereby benefits society as a whole.


DIRECTORS’ REPORT / RISKS AND RISK MANAGEMENT

Risks and risk managementa number of risks may influence Svenska Spel’s target fulfilment to a lesser or greater degree. Svenska Spel relates its major risks to the four general target areas: Customer, Responsibility, Business-like approach and employees. One single risk can affect one or more of them. Risk assessment is conducted by means of a continual risk management process.

isk is defined as uncertainty that can

affect Svenska Spel’s objectives. Many

of the risks can impact on the Company

positively or negatively. Working with

risk management permits the Company

to prevent or be prepared for what can

occur in operations. Effective risk management facilitates

the identification and management in the Company.

The account below presents Svenska Spel’s key risks as

related to the four overall target areas of Customer, Responsi-

bility, Business-like Approach and Employees. One single risk

can affect one or more of the target areas.

Competition for customers

The trend in gaming behaviour towards faster games and

higher percentage reimbursement to winners is a tangible

risk affecting the Customer target area. Thanks to the benefit

of conditions other than those applying to Svenska Spel,

competitors have the potential to offer alternative gaming

experiences and bonus offers. This could enable our compet-

itors to more readily meet customer demands, thereby elimi-

nating Svenska Spel as the player’s first preference.

The risk of technology problems that give rise to gaming

disruptions or other inconvenience could have an adverse

impact on the customer relationship, as could any failure to

prevent incidents that harm the brand, such as money laun-

dering at the casinos.

Information on responsible gaming

Among the risks relating to the Responsibility target area

is the core risk that Svenska Spel does not have sufficient

potential to reach customers and interest them in Svenska

Spel’s gaming environments in preference to other gaming

companies. This would mean that the mandate would not

be fulfilled in an optimal manner from a responsibility per-

spective or that we do not attain the results targets. The

organisation is keenly aware of this risk and works proactively

to counteract it, such as through the continuing develop-

ment of responsible gaming tools and the dissemination

of know-how.

R

Cay Pettersson, Security Manager at Svenska Spel, was nominated as “Security Person of the Year” in the security industry’s biggest competition, Security Awards.


Profitability may be threatened by regulation

Risks related to the Business-like Approach target area prima-

rily include potential re-regulation of the gaming market or

the introduction of further restrictions that would compel

the organisation to work under new conditions. Also, the cur-

rent competitive situation – on unequal terms while awaiting

changes– impact profitability and market share.

Operating risks to profitability relate to gaming disruptions

or a disruption in the supply of lottery tickets. Generally,

Svenska Spel depends on only a few suppliers, since a large

share of the gaming system is owned by the Company and is

operated using in-house resources.

Financial risks

Financial risks are generally considered low. The Svenska

Spel Group is self-financing as its cash flow easily covers its

The risk management process involves identification, analysis and valuation of risk in order to be subse-quently capable of shaping risk management plans if required. Throughout the entire process, results are communicated with the relevant stakeholders and the outcome of the various steps is monitored and reviewed continuously to ensure the risk management process is active and tracks internal and external changes.

Risk management process

Riskbedömning

Com

mun

icat

ion

Mon

itorin

g an

d co

ntro

l

Risk management

Risk valuation

Risk analysis

Risk identification

Scope and context

investment requirements and operating costs. The Group

has no interest-bearing liabilities.

Attracting employees

As regards the Employees target area, the primary risk sce-

nario is that employees are seriously injured. Casino opera-

tions represent an exposed environment and, for example,

a robbery or other violent incidents can result in serious

injury to employees and guests. Examples of other risks in

this area are related to target breakdown, roles and responsi-

bility. Svenska Spel must have competent and committed

personnel in order to attain the set strategic and operational

objectives.


DIRECTORS’ REPORT / BRAND MANAGEMENT

Brand management programmes are based on gaming enjoyment

Svenska Spel’s brand is strong and well-known and gains its strength from gaming enjoyment, the Company’s strong product portfolio, players’ security and safety and the many years of partnership with Swedish sports.

ublic confidence in Svenska Spel, its brand

and sense of responsibility are crucial in a

situation in which competitors can offer

similar games, occasionally under more

favourable conditions than those to which

Svenska Spel must conform. The ability to

offer enjoyable and secure games is a goal towards which

the company strives. Svenska Spel’s vision is that gaming

should be enjoyable for all.

Acclaimed marketing and PR

Svenska Spel complies with the guidelines of the European

Lotteries, and the Ethical Council of the Gaming Industry

(SPER), which have been drawn up in cooperation with

industry organisations in Sweden and Europe.

Public opinion polls give Svenska Spel’s Triss, Stryktipset

and Lotto the highest positive values. These games are

associated with less risk of gaming problems.

During 2011, TV commercials for Triss were awarded two

Silver Lions at the Cannes Lions International Advertising

Festival amid stiff international competition. The Cannes

festival is the most prestigious advertising competition

worldwide. In Sweden, commercial films for Lotto, featuring

the rock group Kiss, were nominated for the advertising

industry’s primary award, the Golden Egg (Guldägget).

Moreover, Svenska Spel’s PR programmes were awarded

when journalists ranked Svenska Spel in third place in the

PR barometer, an annual survey that gauges journalists’

collective level of satisfaction with press and PR work.

According to SIFO’s advertising surveys, Svenska Spel’s

share of the total advertising spend (or share of voice) in the

gaming industry was 22% in 2011, while foreign Internet-

based companies account for most of the advertising spend

in the Swedish gaming market, namely 49%. Svenska Spel

protects its market-leading position through effective but

responsible marketing.

All advertising from Svenska Spel is labelled with the

message: Play in moderation.

lucky winners

Svenska Spel seeks to make gaming enjoyable for everybody.

Frequently, gaming is a pleasure shared with others. For a

majority of customers, the chance of big winnings is the

major driving force behind their gaming. Each week sees

positive media coverage about Svenska Spel – frequently

involving those who have fulfilled their dreams, namely, the

big winners. Winnings and the winner is a significant feature

of the Company’s brand and image. Svenska Spel calls those

who have won SEK 100,000 or more to inform them of their

winnings and congratulate them – calls that provide a great

deal of joy and mean so much for most winners.

p

>>


svenska spel’s top-ten payouts1 SEK 214,595,981 Helsingborg, 27 March 20102 SEK 134,703,155 Saltsjöbaden, 7 May 20083 SEK 134,097,732 Storebro, 18 January 20124 SEK 123,900,556 Helsingborg, 19 February 20115 SEK 122,860,699 Visby, 8 October 20056 SEK 110,551,909 Helsingborg, 27 December 20087 SEK 105,315,432 Borås, 18 June 20118 SEK 103,044,299 Vikmanshyttan, 20 November 20109 SEK 101,798,290 Katrineholm, 25 April 2007

10 SEK 100,000,000 Karlstad, 30 July 2008

All “Dream Winnings” (Lotto/Joker)

>>

Ingrid Petersén, a medical orderly from Härnösand, was overjoyed when she won SEK 5 million on the Triss lottery. She shared the winnings with two colleagues. The scratch ticket event was broadcast live on TV4’s “News Morning” programme in May 2011.


• “Tipselit” which began in 1992, is a coopera-tive project between Swedish Elite Football (SEF), Swedish Elite Women’s Football (EFD) and Svenska Spel with the aim of developing Swedish elite football. Tipselit is a pro-gramme targeted at young talent in the 14–19 age group, associations and coaches.

• 2011 saw the introduction of a youth bonus for Division 1 football clubs, with premiums for clubs that use the youngest players. Previ-ously, five teams in the Superettan division had received a youth bonus.

• The “Supporter Team”, is a successful cooper-ative venture between Swedish Elite Football (SEF) and Svenska Spel to promote a healthy and positive culture on the terraces. A cam-paign was conducted on the website sup-porterlaget.se in 2011, and on the homepages of Swedish Premiership teams. Those voted for by the public received a diploma in con-nection with Swedish Television’s Football Gala in November 2011.

• In 2011, the major sponsors of Swedish foot-ball – Svenska Spel, Swedbank, Ica and TV4 – showed a united front against violence and scandalous behaviour at arenas, which must be stopped in order to prevent Swedish foot-ball’s brand from being spoiled. The project is based at assisting clubs financially in their efforts to counteract violence.

• Each year, Svenska Spel awards a number of grants to promote sports programme: The Elite Sports Grant, The Sports Journalist Grant, Svenska Spel’s Social Award, the allFair Prize and the Swedish Sports Coach Prize. A selected number of grant recipients received their awards at Swedish Television’s annual sports gala, an event sponsored by Svenska Spel.

• The ”Susanne Erlandsson Cup” was set up by Svenska Spel and is awarded to the women’s football team that wins the Swedish Cup Final.

• The F-17 series is a cooperative venture with the Swedish Elite Women’s Football (EFD),

which permits younger players who do not get a place on the first team to meet qualified opposition nevertheless.

• The Swedish Ice Hockey Federation and Svenska Spel have focused on the develop-ment of coaching and talent since the early 2000s.

• In 2011, Svenska Spel signed a record long agreement with the Swedish Ice Hockey Federation that extends for 4 + 3 years and encompasses a broad base as well as the elite clubs.

• In 2011, Svenska Spel commenced cooperation with the ice-hockey legend Peter ”Foppa” Forsberg, who among other things will be included in Svenska Spel’s Hockey Academy, a training programme for ice-hockey trainers in junior and youth teams. The victory for the Swedish team in the Junior Ice-Hockey Championship suggests that Svenska Spel’s focus on youth is providing excellent results.

svenska spel’s partnership with swedish sports has resulted in several valuable ventures, including:


During 2011, Svenska Spel (excluding Casino Cosmopol)

paid out total winnings of SEK 12,596,681,134

(12,126,820,465). Of this amount, 350 winnings (347)

amounted to SEK 1 million or more.

Oddset Bomben provided the largest winnings at odds

of 2,660,634, with a corresponding amount of money, to

a number of customers in Borås who submitted the only

betting ticket with all correct scores.

Saturday 12 November 2011 will go down in Swedish

gaming history as the day when Sweden’s largest football

pools winnings were scooped. A customer in Malmö staked

on a Stryktipset football pools coupon for SEK 64, and was

the single winner with all 13 matches right, which provided

winnings of SEK 20 million.

The most media-noted winner in 2011 was a man with

twofold luck. He scratched forth three TV-screens icons on

two Triss tickets within a period of three days. In a direct

broadcast on TV4’s “News Morning”, he won a total of SEK

2.1 million. Never before had a winner managed to scratch

two tickets simultaneously on the programme.

The absolutely happiest winners in 2011 were undoubt-

edly those who ticked in the “Dream Winnings” (seven correct

numbers on Lotto and at least two correct on Joker on the

same ticket). One winner was from Helsingborg, who won

SEK 123,900,556 – the largest winnings of the year, and the

fourth highest winnings ever. The second, from Borås,

received winnings of SEK 105,315,432 and seventh place

among Svenska Spel’s top-ten payout list.

Flourishing partnership with sports

Svenska Spel is frequently associated with sports, which is a

key reason for the positive attitude of many to the Company.

The Company contributes to broad-based activities as well

as to elite-level ventures, and sport offers a major return in

the form of exposure of Svenska Spel’s brand, along with

goodwill.

Svenska Spel is the main sponsor of the largest associa-

tions – football, ice hockey, handball, bandy and floor ball.

The cooperation agreement between Svenska Spel and the

Sports Confederation from 2009 through 2011 enabled

training for leaders and active members to help promote

healthy values in sport.

Sports provide a large range of special events for sports

betting. In particular, the Elite ice-hockey series and Swedish

Premiership football always attract a higher volume of sports-

betting enthusiasts. Interest peaks in conjunction with such

events as The World Cup, European Football Championship,

and the Swedish ice hockey and football final playoffs. During

2011, the Handball World Cup (both men’s and women’s)

and the women’s World Cup football tournament were

particularly instrumental in attracting the interest of sports-

betting players. The qualification matches for the European

Championship in football, in particular the game between

Sweden and Holland, – which gave the Swedish team a ticket

to the finals in 2012 – were also highpoints for sports-betting

enthusiasts.


svenska spel’s gamesSvenska Spel offers a broad gaming range: sports betting, number games, lotteries, gaming on vegas vlTs, casino gaming and poker on svenskaspel.se. all games are subject to a minimum age limit of 18 for the purchase of Svenska Spel’s products and receipt of winnings, except for casinos for which the age limit is 20.

he Group’s total net gaming revenue for 2011

was SEK 9,687 million (9,624), up SEK 63 million

(0.7%) compared with 2010.

sports betting

Sports-based gaming consists of Oddset and

the football-based Stryktipset, Europatipset, Måltipset and

Topptipset. They can be played at retailers, on svenskaspel.se

and to some extent via mobile phone. This gaming category

has been hit hardest by competition from foreign Internet-

based gaming companies.

Net gaming revenue for sports gaming in 2011 totalled

SEK 1,456 million (1 440) and accounts for about 15% (15) of

Svenska Spel’s total net gaming revenue.

Oddset

The 25 year-old Oddset is market leader in the sports betting

market. Oddset is an all-encompassing name for such games

as Lången, Matchen, Bomben, Mixen and Powerplay. The

player can bet on fixed odds (which apply from the start of

the match to the end result), moving odds (that change as

the stakes flow in) and also on live gaming where the odds

are set during the progress of the match. Match objects are

drawn from a variety of sports, but primarily football and ice

hockey.

Overall net gaming revenue from Oddset in 2011 in creased

2.9% from the previous year. Certain sections of the Oddset

family have a relatively low market share as result of com-

petition from foreign-based Internet gaming companies

who can occasionally offer players higher winnings and

bonuses. This means that Oddset has a lower market share

in specific segments, such as the fixed-odds market and

live gaming.

In 2011, betting on the handball World Cup, the women’s

football World Cup and the qualifying matches for the

European Cup in football in 2012 contributed to revenue.

Basketball-based gaming was reintroduced to the selection

during the year. The past two years have seen a revival of

interest in basketball among the public and the media,

thanks largely to the live broadcast of several matches.

Football pools

After the increase of the reimbursement for the Stryktipset

and Europa tipset football pools, many customers and retail-

ers re quested larger and more playable mathematical sys-

tems. Consequently, the limit for the total number of rows

was extended from 9,216 to 41,472 rows in May 2011. Mean-

while, the customer service was improved, with more time

available for the submission of coupons.

Since 2010, when a winner with 13 correct on Stryktipset

was guaranteed SEK 10 million, the number of football pools

millionaires has increased. A total of 18 million-winnings

were paid out on Stryktipset during 2011, with a record win

of SEK 20 million going to a lucky enthusiast in Malmö.

T

>>

DIRECTORS’ REPORT / SVENSKA SPEL’S GAMES


oddset turned 25In the mid-1980s, gaming companies in France and the US introduced new online technology (direct links between retailer terminals and the gaming company’s central computer) at retailers. In particular, the tech-nology was ideal for random number games such as Lotto; in Sweden, however, bookmaking paved the way for its application.

1986Oddset – which was launched with the Lången, Matchen and Toppen gaming forms – was introduced on 27 October 1986. This was the world’s first online bookmaking and it also attracted considerable inter-national interest. This was arranged with the approval of the Govern-ment during a trial period of 15 months. Initially, the online terminals were placed with 340 major retailers in the Stockholm, Gothenburg and Malmö regions. Age limit of 18 applied to Oddset from the start.

1988Oddset was an immediate success and its popularity grew. Hitherto, sports games had been limited to the football pools and ATG’s horse racing. Oddset offered players a broader range of sports. The only exception to the sports offering was the introduction of the European Song Contest as a gaming object on the Toppen game form.

1992The online technology spread to an increasing number of retailers nationwide and the now permanent Oddset gained rapidly in popularity.

1998Oddset sales exceeded those of the Stryktipset football pools, here by becoming Svenska Spel’s largest sports game. By this stage, the Swedish Oddset-model was being used in 12 other countries.

1999Foreign-based Internet companies entered the Swedish gaming market as competitors to Oddset.

2000Svenska Spel’s proprietary gaming site, svenskaspel.se, was ready for launching gaming on Lången.

2001The Oddset family was extended with the addition of the Bomben gaming form at retailers and on svenskaspel.se.

2003Oddset attained its highest net gaming revenue to date, reaching some SEK 700 million.

2004The Mixen gaming form was first introduced on svenskaspel.se in 2002, and at retailers in 2004.

2006Oddset’s 20th anniversary in 2006 coincided with the first opportunity for players to place stakes on three ice-hockey matches on the Bomben game form.

2007Oddset Live was launched.

2009Oddset Powerplay was introduced.

2011The Oddset success story continues to show its strength after 25 years, despite growing competition arising from new sales channels created by new technology. At retailers, ATG’s horseracing and Svenska Spel’s sports gaming continue to jostle for gaming space, but the major growth has been on the Internet. Mobile phone-based gaming is the new distribution channel in the wake of the Internet. 2011 saw all-time high odds of 2,660,634 on Bomben.A few lucky players shared the winnings, which amounted to a similar total in SEK.

>>



Triss turned 25The prototype for what came to be Sweden’s most popular lottery ticket was the American scratch lotteries, which were frequently one-off lotteries with a new appearance from time to time. As opposed to the US model, Swedish Triss was to become a recurrent lottery with a permanent appearance.

1986Penninglotteriet launched Triss on 29 September 1986. The ticket price was SEK 20 and the maximum winnings SEK 100,000. Success was immediate. The edition sold to retailers was limited and quickly sold out. The tickets arrived on the 10th of each month and long queues stretched outside the appointed outlet retailers.

1992The ticket price was raised to SEK 25.

1994Triss sales jumped when the TV screen icon was introduced, which enabled potential winners to scratch winnings ranging from SEK 50,000 to 5,000,000. The premier took place during the relatively new pro-gramme ”News Morning” on Swedish TV 4 on 21 March 1994. Already during the first scratch session, the winner won the maximum SEK 5 million prize. As a result, Sweden became the first country worldwide to show scratch lotteries live on TV.

199717 October 1997 marked the introduction of Triss Månadsklöver, a new prize category on the Triss tickets with a final scratch directly broadcast on TV4. The winner scratched forth a monthly prize of SEK 10,000 to 25,000, which is paid out over a period of between 10 and 25 years. Månadsklöver almost doubled Triss sales.

2001The maximum winnings available directly on the scratch surface were raised to SEK 1,000,000 in February 2001.

2002The excitement-raiser known as the “multiplying winnings” – permitting the player to gain a twofold or tenfold increase of the total scratched win – was added to Triss.

2003The launch of a variant of Triss: DubbelTriss, through which, by paying a double ticket price, you can win in two scratch tickets or both tickets combined.

2006In conjunction with the 20th anniversary in August 2006, the new luxuri-ous Anniversary Package – a SEK 250 ticket – was launched, which offered the best chance ever scooping winnings of SEK 1 million. The 1,000th Triss millionaire was Tommy Essenholm, who scratched his Månads klöver on a gigantic ticket on Kungsgatan in Stockholm on Saturday 2 September 2006. The winnings were SEK 15,000 per month for 20 years.

2007A special Triss Association ticket was launched in cooperation with the non-profit associations. The maximum prize for Månadsklöver was increased to 50,000 kronor per month for 25 years.

2010An age limit of 18 was introduced on 1 October 2010 for the purchase of tickets or receipt of winnings for all Svenska Spel’s lotteries.

2011In terms of net gaming revenue, Triss is Sweden’s fourth largest game. After 25 years, Triss is still on top in terms of public popularity with its annual customer base of more than 4 million ticket buyers.


2011 saw the launch of Stryktipset, Europatipset and

Topptipset in Svenska Spel’s mobile web, which was well

received by the customers.

Players’ positive response to the increased reimbursement

is reflected in the gross gaming revenue for football pools,

which rose almost 20%.

However, net gaming revenue for Stryktipset and Måltipset

has declined slightly, Europatipset and Topptipset display

continuing growth.

Number games

Svenska Spel’s lucky number games are Lotto, Keno, Joker,

Viking Lotto and the Internet games Bingo and Pick’n’Click.

The first three can be played at retailers as well as on

svenskaspel.se. Viking Lotto is only available in-store, while

Bingo and Pick’n’Click are only available on svenskaspel.se.

Lotto and Joker are also sold via subscription and via mobile

phone.

Number games represent the largest gaming category,

with net gaming revenue in 2011 amounting to SEK 2,892

million (2,879). They account for some 30% (30) of Svenska

Spel’s total net gaming revenue.

In terms of net gaming revenue, Lotto is Sweden’s fifth

single largest gaming form after Vegas, PostkodLotteriet,

V75 and Triss. Lotto increased by 1.0% in 2011.

The supplementary Joker game is valuable on the Lotto

and football pools coupons. In 2011, the Joker net gaming

revenue increased 3.4%.

Keno is Svenska Spel’s second largest number game. In

2011, net gaming revenue dipped 3.0% from the preceding

year. During the year, the offering was enhanced in the form

of four ready-made games – Keno 30, Keno 60, Keno 120 and

Keno 240, making it easier for customers and retailers alike.

Viking Lotto is a joint venture among gaming companies

in Sweden, Norway, Finland, Denmark, Iceland and Estonia.

It is a minor game in Sweden with a declining trend, but is

progressing better in some of the other countries.

Svenska Spel’s own Internet games on svenskaspel.se,

Bingo and Pick’n’Click, reported net gaming revenue of a

total of SEK 126 million (125) in 2011. Bingo saw a trend

reversal, with a rising market share and more customers.

lotteries

Svenska Spel’s lotteries are Triss (with the DubbelTriss and

GuldTriss variations), Tia (several variations), Penning and

the Skrap-Spel scratch range consisting of Skrap-Pyramid,

Skrap-Kryss and Skrap-Bingo, and the newcomer in 2011

Skrap-Stjärna, in addition to temporary campaign lotteries.

The offering also includes Lottpaketet, a pre-packaged set

of lottery tickets.

Lotteries can be purchased at retailers and on

svenskaspel.se. Triss and Tia can also be purchased via

mobile phones. Svenska Spel also provides a subscription

service for Triss.

Lotteries have come under increased competition, notably

from PostkodLotteriet, but also from the sale of lottery tickets

by NGOs and Internet-based lottery sales. Net gaming reve-

nue for lotteries declined slightly in 2011 to SEK 1,838 million

(1,846), accounting for some 19% (19) of Svenska Spel’s total

net gaming revenue.

By far the biggest lottery is the 25-year old Triss in terms

of net gaming revenue, number of customers, recognition

and popularity. No other game has such high acceptance;

Svenska Spel’s 2011 survey indicated that about 4.4 million

Swedes purchased Triss during the year. Net gaming reve-

nues in 2011 totalled SEK 1,640 million (1,621). Penning, Tia

and Lottpaketet show a negative trend at a substantially

lower level, while Skrap-Spel gained a positive response

with the launch of Skrap-Stjärna.

>>

Triss Gift Codeis an innovative new feature introduced in 2011 that facilitates for customers to give Triss lottery tickets as gifts. Read more on page 39.


>>

svenska spel’s games, net gaming revenue and sales channels

net gaming revenue

MSek 2011 2010Restaurants

and bingo halls Casinos Retailers

associations (arena

gaming) internet MobileSubscrip-

tion

Sports games

Oddset 813 790

Stryktipset1 310 324

Europatipset1 140 128

Måltipset 100 110

Topptipset 92 87

number games

Lotto 1,625 1,610

Keno and KenoXpress 585 603

Joker 513 496

Viking Lotto 43 45

Bingo and Pick’n’Click on svenskaspel.se 126 125

lotteries

Triss 1,640 1,621

Tia 65 88

Skrap-Spel 104 99

Penninglotten 8 9

Lottpaketet 21 29

vlTs

Vegas 2,083 2,039

Casino games 1,203 1,190

poker

Poker on svenskaspel.se 214 231

Live poker2

Total 9,687 9,624

1. Net gaming revenue for 2010 included Dubbelvinsten (Double winnings) feature, which was discontinued in August 2010. 2. Included in casino games.As the amounts have been rounded off, the totals do not always tally.



Vegas

Vegas is a VLT (video lottery terminal) that includes a range

of games, such as wheel games with various themes, video

poker and Keno. The maximum stake for Vegas gaming is

SEK 5 and the highest winnings SEK 500. 2011 marked the

15th year of operations for Vegas, which is Sweden’s largest

gaming form.

Vegas net gaming revenue increased to SEK 2,083 million

(2,039), representing 22% (21) of Svenska Spel’s total net

gaming revenue.

Svenska Spel has a monopoly on VLTs in Sweden. Vegas

VLTs are located only in selected restaurants with an alcohol

license or in bingo halls with bingo licences. A gaming loca-

tion may not have more than five Vegas VLTs and their reve-

nue must not dominate the business.

The total number of VLTs that Svenska Spel can install

nationwide is restricted to 7,500. As Vegas is considered to

be one of the games most likely to create gaming problems,

it is encompassed by many restrictions and requirements.

Responsible gaming has a high priority and the aim is to

train all employees and Vegas business partners in responsi-

ble gaming, and test purchases are conducted annually to

ensure that age controls are upheld. A number of employees

charged with receiving calls from problem players and rela-

tives of problem players were specially trained in handling

difficult calls. The game is sparesly marketed and players

must verify their age before they commence playing.

During 2011, an agreement was signed for the purchase of

responsible gaming tools, based on the Spelkortet customer

card, which will also be available for Vegas customers. Tests

will commence at year-end 2012 and the tools are expected

to be available for all Vegas customers by summer 2013.

Casino games

Casino Cosmopol celebrated its 10th anniversary in 2011.

2001 saw the opening of the international casinos in

Sundsvall and Malmö, while the Gothenburg casino opened

in 2002 and the Stockholm casino in 2003. The casinos offer

table games (roulette, dice and card games) and slot

machines.

Casino games net gaming revenue in 2011 amounted to

SEK 1,203 million (1,190), accounting for some 12% (12) of

Svenska Spel’s total net gaming revenue.

High priority is assigned to responsible gaming and secu-

rity at the casinos. Gaming and responsible gaming infor-

mation is displayed throughout the premises, as well as on

multi media screens. Personnel have training in matters

relating to gaming problems. The marketing of the casinos

is limited. Campaigns are run to promote the overall casino

concept with gaming, restaurants and entertainment in

centrally located, culture-historical buildings.

Casino Cosmopol has exclusive rights to international

casinos in Sweden, but foreign-based Internet companies

provide casino games on Internet.

Poker

Svenska Spel offers poker on svenskaspel.se and at the casinos.

Net revenue in 2011 for Internet-based poker declined to

SEK 214 million (231), representing some 2% (2) of Svenska

Spel’s total net gaming revenue. Svenska Spel’s market share

for Internet poker rose to 34% (33).

Net gaming revenue from poker at the casinos is included

in the total net gaming revenue for casino gaming. Interest

in poker at the casinos is high. Casino Cosmopol arranges

poker tournaments, such as the popular Swedish Poker

Championship, and cash games.

A Supreme Court decision confirmed that only Svenska Spel’s VLTs are to be available in the Swedish market. Thus, gaming machines located in Sweden but linked to servers abroad are prohibited.

Gaming machines in sweden


DIRECTORS’ REPORT / GROUP FINANCIAL RESULTS AND POSITION

Revenue

Net gaming revenue amounted to SEK 9,687 million (9,624),

up SEK 63 million compared with the preceding year. All

business areas contributed to the increase: Vegas increased

2.2%, Casino Cosmopol by 1.1% and Gaming & Lotteries

by 0.1%.

Net sales from gaming operations, etc. totalled SEK 7,919

million (7,885), up SEK 34 million, or 0.4%, from 2010.

Profit

Operating profit for 2011 amounted to SEK 4,940 million

(4,795), an increase of SEK 145 million (3%) since the

preceding year.

Operating expenses totalled SEK 2,979 million (3,090),

a decline of 3.6%. The expenses that decreased most were

marketing expenses and depreciation. A non-recurring ex -

pense of SEK 17.9 million reduced operating expenses and

pertains to the repayment of VAT for the period 2005–2010.

The operating margin increased by 0.1% to 21.9%.

Net financial items totalled SEK 66 million (–27). The

change is attributable to higher returns on investments,

higher bank interest income and positive value changes

in respect of investments aimed at future payments to

winners of the Triss Månadsklöver lottery.

The consolidated comprehensive income for 2011

amounted to SEK 5,007 million (4,766), or SEK 240 million

higher (5.0%) than the previous year.

Cash flow

Cash flow from operating activities totalled SEK 5,600 million

(4,836). Cash flow from investing activities amounted to a

negative SEK 842 million (–735). Cash flow from financing

activities totalled a negative SEK 4,766 (–4,877) and pertained

to the payment of the surplus for 2010, with deductions for

advance payments, in line with the decision of the AGM.

Cash and cash equivalents totalled SEK 2,264 million (2,273).

Group financial results and positionInvestments

Investments in tangible assets totalled SEK 162 million (174),

while investments in intangible assets amounted to SEK 35

million (29). Investments in financial assets totalled SEK 2,097

million (848), with disposals amounting to SEK 1,584 (381).

Financial position

Equity at 31 December 2011 was SEK 5,007 million, or SEK 240

million higher than the corresponding date a year earlier. The

equity/assets ratio was 61.8% (63.7).

segment reporting 2011

Svenska Spel’s Group executive management monitors oper-

ations using segments based on Svenska Spel’s offering of

games.

The group’s operational segmentation corresponds to the

organisation’s division into business areas, namely, Gaming &

Lotteries, Vegas and Casino Cosmopol, see page 14. A minor

redistribution of joint costs was conducted in 2011 and the

Company’s figures have been adjusted according to the new

distribution model.

Parent Company

The Parent Company includes all gaming activities except

the casino operations. Net gaming revenue in the Parent

Company in 2011 totalled SEK 8,484 million (8,434). The

Parent Company’s share of the total net gaming revenue in

the Group was 87.6% (87.6). Net sales from gaming operations,

etc. amounted to SEK 6,636 million (6,614). Operating profit

was SEK 4,384 million (4,257), up 3.0%.

Investments in tangible and intangible fixed assets totalled

SEK 160 million (165). Investments in financial assets

amounted to SEK 2,096 million (848).

The average number of employees was 755 (744), whereof

63% are men.


svenska spel’s business areasSvenska Spel’s organisation 2011 consisted of three business areas: Gaming & lotteries, vegas and Casino Cosmopol.

Net gaming revenue by business area in 2011

net gaming revenue, Sek million 2011 2010

Change, Sek million

Change, %

Gaming & Lotteries 6,401 6,395 6 0.1

Vegas 2,083 2,039 44 2.2

Casino Cosmopol 1,203 1,190 13 1.1

Svenska Spel total 9,687 9,624 63 0.7


Gaming & lotteries business area

The Gaming & Lotteries business area accounts for a sub-

stantial share of Svenska Spel’s net gaming revenue. In 2011,

this amounted to SEK 6,401 million (6,395), representing

some 66% (67) of Svenska Spel’s total net gaming revenue.

Net sales from gaming operations, etc. accounted for SEK

5,399 million (5,400). Operating profit in 2011 was SEK 3,607

million (3,547).

The business area is responsible for the sales, marketing and

development of all gaming and lotteries at retailers, arenas, on

svenskaspel.se, via mobile telephone, corporate customers and

subscriptions. The Spelkortet customer loyalty card is also part

of this business area.

Gaming & Lotteries is subject to stif f competition in a

market in which the player base is shrinking, customers are

aging and game evolution is moving faster. The business

area focuses on strengthening its relationship with existing

customers and channelling potential customers to Svenska

Spel through attractive games, high accessibility, advanced

responsible gaming programmes, and service.

Gaming via stores

As of 31 December 2011, Svenska Spel had 6,209 (6,604)

retailers: retail stores, food stores, department stores, betting

stores, tobacco shops and petrol stations. They accounted for

SEK 5,055 million (5,143) in net gaming revenue, a decline of

2.3%. The Company’s nationwide distribution network remains

unique despite the emergence of new and more modern dis-

tribution channels, and represents the Company’s key success

factor in addition to its strong brands.

2,580 retailers (2,674) carry the full range of Svenska Spel’s

sports betting, number games and lotteries. 3,540 (3,834)

lottery retailers sell only lottery tickets.

In addition, Svenska Spel has 89 (96) “checkout” retailers

at the ICA chain and Reitan (Pressbyrån and 7-Eleven), where

lotteries, Lotto and Joker are sold at the checkout.


Events 2011 Priorities 2012

• Triss won two Silver Lions at the Cannes Lions Advertising film Festival for the commercial “The Proposal”.

• Identity checks in stores were introduced for payment of winnings exceeding SEK 1,000.

• Record winnings on Stryktipset amounted to SEK 20 million.

• Launch of new games for mobile phones – Tipsen, Powerplay, Lotto and Bomben – as well as a goal service app for Android.

• Internet-based gaming reversed from nega-tive to positive growth.

• Svenska Spel turned around the negative trend for Bingo and increased the number of players, despite a declining market.

• Svenska Spel’s poker on svenskaspel.se won market share in a downward market.

• Launch of the Triss Gift Code for corporate and private customers.

• Sharp growth for the football pools as a result of the increased reimbursement introduced in 2010.

• Continuing high level of approved results from test purchases at retailers, 84% for 2011.

• Further develop the Company’s strongest product brand, Triss.

• Major focus on the Ice-Hockey World Cup, European Football Championship and the Olympic Games.

• Increase the awareness of Oddset in mobile phones and develop more games.

• Increase the involvement in and support for syndicate-based gaming at retailers.

• Increase customer awareness by synchronising Svenska Spel’s various sales channels.

>>


Responsible gaming at retailers

The retailers have an age limit of 18 for the purchase of lottery

tickets and payment of winnings for all Svenska Spel’s games.

During 2011, customer security was improved with the intro-

duction of identity requirement for the payout of winnings

exceeding SEK 1,000. Also, the blocking of retail terminals was

introduced for the payment of winnings of SEK 20,000 and

more. Information on winnings shown on the customer display

was made clearer, and tickets submitted after using the

Spelkortet customer card now carry the customer’s name

printed on them. These measures ensure that customers are

made aware about their winnings and that prize money fall

into the right hands.

Svenska Spel regularly makes test purchases in order to

control how the retailers handle the age limits. The results

have steadily improved and the handling of identity require-

ments among gaming retailers is now very good in general.

ID control is a new routine for lottery retailers and therefore

their results have not yet reached the same levels.

A test purchase means that a young person 18–19 years

of age – who looks younger, and whose identification the

re tailer should check according to the rules – visits the retailer,

buys a ticket and notes whether the retailer asks for identifica-

tion. The rule is that retailers must check the identity of people

under the age of 25. The proportion of approved test pur-

chases is now 84% (86), which clearly shows that re tailers are

satisfactorily managing their age limit controls. Among lottery

retailers, where ID checks have been routine for more than

a year, 59% of the tests were approved. A two-week ban is

imposed on retailers who fail two consecutive tests, which

affected 97 lottery retailers and 14 (10) gaming agents. Two

lottery retailers lost their sales permit after having failed four

consecutive tests. An additional 18 retailers (12) lost their con-

tract with Svenska Spel due to serious breaches of contracts.

8 (9) of them had illegal gaming machines in their stores.

Spelkortet – a component in responsible gaming

Following its decade-long use, the Spelkortet customer card

programme has now been developed to form a key feature of

Svenska Spel’s brand and responsible gaming. The card is per-

sonal and free of cost, and application can be made at retailers

or on svenskaspel.se by customers who have turned 18 and are

registered residents in Sweden. The Spelkortet card is obliga-

tory for gaming on svenskaspel.se. Some 1.2 million customers

have acquired the card. Spelkortet provides automatic

monitoring of winnings, permits gaming on svenskaspel.se,

where players can also control their gaming behaviour via the

PlayscanTM tool and receive offers of discounts and competi-

tions, etc.

Svenska Spel continues to develop the Spelkortet customer

card as part of efforts to create added value for customers.

Currently, the card cannot be used for buying lottery tickets

at retailers, neither on Vegas or in the casinos.

Dialogue with retailers

Svenska Spel cooperates with retailers in order to optimise the

in-store customer service.

The business area has a special section for training retailers.

The Retailer School has its training premises at Svenska Spel’s

Sundbyberg office, where retailers – especially recently estab-

lished ones – receive training in responsible gaming, games,

retailer terminal know-how, customer service, and so forth. The

school also offers open courses in various subjects nationwide.

In 2011, 359 people (387) attended the Retailer School and

2,079 (1,872) participated in training courses.

Retailers also have their own Svenska Spel website at their

disposal, with access to training, information, campaign news,

and so forth. In addition, a weekly newsletter, “Spelveckan”, is

sent to gaming agents, while the monthly “Spelnytt” magazine

is mailed to all retailers.

Svenska Spel has its own betting store – known as “The Lab”

– in its offices in Sundbyberg. It also serves as a café and a test

environment where Svenska Spel can test new games and

concepts and pursue direct dialogue with customers and

retailers.

Once annually, Svenska Spel arranges the much-appreciated

“Ombudsgalan” (Retailers’ Gala). Selected retailers are acclaimed

for their exceptional input in a number of categories such as

“Retailer of the Year”, “Climber of the Year” and so forth. The

retailers’ gala event in 2011 was held at the Ericsson Globe

Arena in Stockholm, to which a few hundred retailers were

invited to attend exhibitions, information, have dinner and

enjoy the entertainment.

Internet gaming

Svenska Spel estimates that in 2011 the net gaming revenue

via the Internet from the Swedish market totalled some

SEK 4,900 million (about 4,400) up 11% from 2010. On the

DIRECTORS’ REPORT / GAMING & LOTTERIES BUSINESS AREA


Internet, Svenska Spel has a market share of approximately

25% (27).

Total net gaming revenue at svenskaspel.se in 2011 in -

creased to SEK 1,188 million (1,152). Sports games, number

games and Bingo increased, while poker and lotteries

decreased.

The single most popular game on svenskaspel.se is Lotto,

followed by poker. Despite its decline, poker reported net

gaming revenue (referred to as the rake) of SEK 214 million

(231) and raised its market share in 2011. For the fifth conse-

cutive year, a Swedish Poker Championship was arranged

online, with a record participation level of some 6,000 players.

Responsible gaming on svenskaspel.se

In contrast to the gaming market as a whole, with less players,

the number of players on svenskaspel.se has increased. In brief,

more people are playing but their stakes are smaller. This is a

positive development as svenskaspel.se is to channel players

from foreign gaming sites. Playscan™ and the Spelkortet cus-

tomer card help players to be aware of their gaming behaviour.

An upgraded version of the responsible gaming tool was

launched in 2011. Before playing, all players on svenskaspel.se

must indicate the size of the stake they wish to play for, and

poker players must also indicate how long they intend to play.

Mobile gaming and services

Mobile phones, smartphones and tablet computers are now

distribution channels with sub stantial growth and a high

development rate of new services. Svenska Spel Mål och

Resultatservice (scores and results service) is an app designed

for the iPhone and Android handsets. Customers can monitor

particular games played via svenskaspel.se, mobile phone or

submitted at a retailer using the Spelkortet customer card.

One selects the sport, leagues and matches that are to be

monitored and can see on-going and completed matches, get

forecasts, view live score checking, and check the timing and

channels for live TV broadcasts of selected matches.

During 2011, Svenska Spel also further enhanced the poten-

tial to play via smartphones and the mobile offering currently

encompasses gaming on Oddset, the football pools and Lotto.

The very first ”mobile millionaire” won some SEK 1.3 million on

Lotto in November 2011.

Those gaming via a mobile phone gain automatic access to

the same responsible gaming tools as Internet players.

Arena sales

The opportunity to play on-site in connection with matches

is much appreciated, and currently covers 26 football and ice

hockey arenas. On-site arena gaming is a result of a coopera-

tion between Svenska Spel, Arenabolaget (the Arena com-

pany), local retailers and sports associations.

subscription sales

Subscription is a rapidly growing venture. Net gaming revenue

in 2011 totalled some SEK 101 million, up 94% from the previ-

ous year. At present, Svenska Spel has more than 130,000 sub-

scribers (approx. 100,000). It is currently possible to subscribe

to Triss and Lotto with Joker.

Corporate sales

The Corporate Sales unit focuses on companies buying games

and lottery tickets as prizes in competitions, or as gifts and so

forth. 2011 saw the launch of Triss Gift Code that customers

– both private and corporate – can order via an account at

svenskaspel.se and then forward to the intended recipient. The

recipient presents the gift code at a retailer or on svenskaspel.se

and receives the gift of Triss. This innovation instantly had a

customer acceptance exceeding all expectations.

successful ventures

Sports games have a committed and knowledgeable customer

base that imposes high demands in terms of the gaming

experience and prefers fast games with a high reimbursement.

Last year’s increase of the reimbursement of Stryktipset and

Europa tipset resulted in an almost 20% increase in gross reve-

nue thereby levelling out a declining trend.

In 2011, the business area focused on a broader offering for

the Oddset Powerplay, which more than doubled its net gam-

ing revenue.

The business area and the O’Leary’s sports pub chain

commen ced a cooperative venture, which has made the pubs

a venue for all those who love football and the Stryktipset foot-

ball pools.

In connection with the 25th anniversary of Triss, a major

campaign was launched featuring higher winnings. In 2011,

a commercial for Lotto was nominated for the Swedish

Guldägget (Golden Egg) award, and Triss was awarded two

Silver Lions at the advertising film festival in Cannes.


Vegas business area

The business area is responsible for Vegas Video Lottery

Terminals (VLTs), which have been installed in 2,254 (2,230)

restaurants and bingo halls nationwide that have concluded

partnership agreements with Svenska Spel. Overall, 6,588

VLTs (6,563) have been installed in the premises of these

business partners.

Net gaming revenue increased in 2011 to its highest ever

amount, SEK 2,083 million (2,039), corresponding to about

22% (21) of Svenska Spel‘s total of SEK 9,687 million (9,624).

Vegas remains Sweden’s single largest game in terms of net

gaming revenue.

Net sales from gaming operations, etc. totalled SEK 1,222

million (1,198). Operating profit was SEK 893 million (835).

Debate during 2011

Gaming on VLTs is questioned because there is a relatively

high risk of developing problem gambling.

15 years ago, the Swedish Government and Parliament

approved a permit for a new game, video lottery terminals

(VLTs). Svenska Spel gained the commission, which was sub-

ject to clear re stric tions in terms of their location, number

of VLTs in any gaming facility, and limits on winnings and

stakes, for example.

The first VLTs were installed in 1996 in restaurants under

the name Jack Vegas. The Lottery Act stated that VLTs may

only be placed in restaurants with an alcohol license and in

bingo halls, i.e. in envir on ments that are already subject to

age restrictions with age limits.

According to Svenska Spel’s mandate, the Company shall

serve as a credible alternative to illegal gaming machines.

Private gaming machines are illegal

The Supreme Court rules that, in principle, Vegas are the

only VLTs permitted in Sweden. Private gaming machines

Vegas business area


• Completion of a pilot test and commence-ment of the rollout of a new gaming system.

• An agreement covering the purchase of responsible gaming tools was signed. Tests will commence at the end of 2012 and the responsible gaming tools are expected to be available to all Vegas customers in the summer of 2013.

• Launch of four new games.

• Investment made in 270 new VLTs.

• Training of more than 2,000 business part-ners through a new responsible gaming programme.

• Government granted Svenska Spel a con-cession for VLTs for the next two years.

• Net gaming revenue in 2011 represented an all-time record.

• The Supreme Court established that private gaming machines linked to servers abroad are illegal.

• Launch of six new games during the year.

• Invest in 360 new VLTs.

• Conduct an information campaign aimed at increasing insight into the Vegas gaming form.

• At year-end 2012, tests will commence on the responsible gaming tools in Vegas VLTs.

>>

DIRECTORS’ REPORT / VEGAS BUSINESS AREA


Vegas turned 15

In 1995, new lottery legislation came into effect that, among other things, meant that VLTs could be introduced as a new game in Sweden. The Government decided that AB Tipstjänst (Swedish Pools) would have a monopoly on the modern VLTs and that the surplus would accrue to the Swedish Sports Confederation and the Swedish National Board for Youth Affairs.

1996 In May 1996 Tipstjänst installed the first VLTs – under the name Jack Vegas – in restaurants with alcohol permits. The surplus accrued to the Swedish Sports Confederation and the Swedish National Board for Youth. A minimum age limit of 18 applied from the start. Winnings were paid in the form of gift vouchers with a maximum value of SEK 1,000.

1997 Tipstjänst was merged with Penninglotteriet to form Svenska Spel. In subsequent years, revenue increased substantially and Jack Vegas became an established game.

1999 Svenska Spel received a permit to arrange gaming on VLTs also for bingo halls, and Miss Vegas was launched. Gift vouchers were replaced by cash winnings. Meanwhile, maximum winnings were reduced from SEK 1,000 to SEK 500.

2001 In terms of revenue, Jack Vegas became the single largest game in Sweden, generating substantial earnings for restaurants, bingo halls and Swedish sporting associations. An adverse result of this was the emergence of a growing gaming problem. Thus, responsible gaming became an increasingly important feature of Jack Vegas operations.

2005 The Winwave VLT was launched. Winwave was the result of a com pe-tition arranged by Svenska Spel to develop VLTs for the future.

2006 Vegas turned 10. A limit rule was introduced for business partners. Vegas was not allowed to dominate their business, but be a complement to the restaurant’s or bingo hall’s regular business.

2007When Svenska Spel’s logotype, the winner symbol, was integrated in all product logotypes, the names Jack Vegas and Miss Vegas were removed and replaced by the simpler product name, Vegas.

2008 Age verification was introduced in the VLTs in order to highlight the minimum age of 18 for playing on Vegas.

2009 The special ring-fencing of Vegas’ surplus for sports ceased after a Government decision.

2010 An energy-saving function was introduced in Vegas VLTs, which decreased energy consumption. During the autumn, a new responsible gaming campaign was conducted featuring the elite ice-hockey goal-keeper, Henrik Lundqvist.

2011 Vegas turned 15. A new gaming system was introduced in a number of restaurants, and in 2012 all business partners will have it. Over a ten-year period, in terms of net gaming revenue, Vegas has been Sweden’s single most profitable game. Net gaming revenue in 2011 reached SEK 2.1 billion – an all-time high.

>>


linked to servers abroad are operating in Sweden. The

Supreme Court has examined whether these gaming

machines were in accordance with the Swedish Lottery

Act that solely applies to gaming arranged in Sweden.

In December 2011, the Supreme Court decided that this

gaming was deemed as being arranged in Sweden, and

thus private gaming machines to be viewed as illegal.

Education and information prioritised

The Vegas business area constantly strengthens responsible

gaming programmes in a bid to provide customers with

means to control their gaming.

Vegas is marketed only in a very limited degree to avoid

the emergence of problem gaming with greater efforts

devoted to information and training. In 2011, more than

2,000 business partners underwent new responsible gaming

training. Information regarding Vegas and where customers

and relatives can turn to in the event of problems is to be

found in all venues.

Each year the business area arranges the Vegas Gala,

when business partners are celebrated for their excellence

in different fields, for example, “Vegas Best Responsible

Gaming of the Year”, “The Vegas Pub of the Year”, or

“The Vegas Bingo Hall of the Year”. The Vegas Gala in 2011

was held at Cirkus in Stockholm and hundreds of partners

were invited to an exhibition, for information and dinner

with entertainment.

Controlled responsible gaming

The minimum age for playing Vegas games is 18. Customers

must register their date of birth before they can begin to play

and if the player is under 18, gaming cannot commence. In

the event of a win, the date of birth is printed on the winning

ticket, which must match the ID card before the winning is

paid out.

During 2011, the Vegas business area conducted 2,473

(2,485) test purchases among business partners to ensure

that minors could not play on the Vegas VLTs. 85% of the

test purchases were approved.

Svenska Spel also checks if there are any illegal gaming

machines at the restaurants. In relevant cases, the Swedish

Gaming Board is informed and the business partner is

requested to remove the machines. If they don’t, Svenska

Spel terminates the partnership.

New central system with responsible gaming tool

The introduction of a new central system commenced

during the year. The system will permit business operations

to be more f lexible, and it will allow for example new

games and responsible gaming tools for the benefit of the

customers.

An agreement for the purchase of responsible gaming

tools was signed. They will be available via the Spelkortet

customer card during the summer of 2013 permitting the

customers to voluntarily set gaming limits in terms of time

and money, as well as excluding themselves from playing on

Vegas VLTs.

New developments in 2011

During 2011, the business area invested in 270 new Vegas

VLTs. In addition, four new games were launched.

VlTs in the Nordic regionSvenska Spel’s permit covers 7,500 Vegas VLTs, and 6,588 are actually installed. Norway has issued permits covering 10,000 VLTs, while there are 20,000 VLTs in the Finnish market and 27,000 in Denmark.

DIRECTORS’ REPORT / VEGAS BUSINESS AREA


Casino Cosmopol business area

Svenska Spel’s subsidiary Casino Cosmopol AB has operated

four international casinos since 2001, and thus celebrated its

10th anniversary during 2011. The casinos are located in

carefully renovated, cultural-historic premises in Stockholm,

Gothenburg, Malmö and Sundsvall and offer classic and new,

international casino games, restaurants, bars and live enter-

tainment.

Net gaming revenue rose in 2011 to SEK 1,203 million

(1,190), accounting for some 12% (12) of Svenska Spel’s total

net gaming revenue. Net sales from gaming operations, etc.

totalled SEK 1,291 million (1,277). Operating profit for 2011

totalled SEK 494 million (469).

Casino Cosmopol has an age limit of 20. Casino employ-

ees may not play at the casinos.

For the tenth consecutive year, the number of casino

visitors increased. During 2011, the number of visits to the

four casinos totalled 1,231,845 (1,218,851) distributed as

follows: 453,230 in Stockholm (439,340); 361,434 in Gothen-

burg (354,480); 244,321 in Malmö (246,852); and 172,860

in Sundsvall (178,179).

Hospitality and responsibility

The Casino Cosmopol has an extensive training programme

for personnel and executives. Responsible gaming training is

obligatory for employees who, among other things, conduct

outreach dialogues with guests showing signs of excessive

gaming. Special priority is given to young guests in the 20–24

age group. According to the National Institute of Public

Health’s report from 2010, men in the 18–24 age group repre-

sent a risk group.

During 2011, a total of 4,151 dialogues (3,923) were made

with guests regarding their gaming behaviour and the risks

of excessive gaming. The casino informs guests of the possi-

bility to voluntary limit the number of visits or a complete

ban. During the year, 2,350 guests (2,282) chose to conclude

such an agreement.

Marketing of the casinos is relatively restricted, and TV is

never used for advertising.

Casino Cosmopol business area


• Casino Cosmopol celebrated its 10th anniversary.

• A new poker booking system was launched in May for simpler and secure booking via the website casinocosmopol.se.

• Completion of systems for guest registration and incident management.

• The Swedish Competition Authority dismissed a case against Casino Cosmopol regarding its alleged distortion of the restaurant market.

• More effective camera monitoring of casino operations.

• Public awareness of Casino Cosmopol will be increased and the image enhanced.

• Continuing focus on responsible gaming programmes.

• The sense of enjoyment will be further enhanced through the development of competency, personnel and leadership.

• The game offering will be strengthened with new slot machines replacing old ones.

• Continuing focus on identifying and reporting alleged money laundering.

>>


Unique brand

A new brand strategy will enhance the casino experience

making the primary attraction – gaming – more known and

more enjoyable to each guest.

The casinos have a joint objective for entertainment, gam-

ing and restaurants. Casino Cosmopol utilises the combined

know-how of the casinos to ensure that guests enjoy them-

selves and are content with their visits. The Sundsvall casino

was redecorated in connection with its 10th anniversary.

smoother procedures for poker players

Poker tournaments at the casinos are very popular and well

attended, why Casino Cosmopol has focused on implement-

ing a new e-trading system for poker tournaments and pack-

aged offerings. Poker players can now smoothly apply to

tournaments via a new booking system on the website,

casinocosmopol.se.

The casino in Stockholm added five poker tables, a new

poker bar and renovated the high-stake venue. All casinos

have also got more modern gaming tables.

Technology, security and control

Technology, security and control at casinos are advanced and

subject to regular reviews. During 2011, camera surveillance

of casinos was made more effective.

A new guest registration system is to be installed during

2012, as well as a system for handling incidents and registring

money laundring. The work aimed at counteracting money

laundering is a high-focus area. In 2011, 284 (311) suspected

incidents of money laundering were reported to the Swedish

Financial Police.

In November 2011, following a decision of the public pros-

ecutor, eight people were arrested and detained on suspi-

cion of grand embezzlement. Seven of the detainees were

employees of Casino Cosmopol in Gothenburg. The casino’s

surveillance unit discovered irregularities and observed the

suspects over a period of time before calling the police. No

guests were harmed by the alleged crime.

For Casino Cosmopol, close cooperation with the Swedish

Gaming Board, the Financial Police and other authorities is

important in an effort to counteract crime at the casinos.

Casino Cosmopol is refining its methods and training and is

develops new, upgraded support systems and procedures

after the directives from the Swedish Gaming Board. All

casino guests are identified, registered and supervised

by camera.

Completion of competition matter

During 2010, following a report from the Swedish Hotel and

Restaurant Association, the Swedish Competition Authority

reviewed Casino Cosmopol’s restaurant offering and adver-

tising in order to ascertain that they were in compliance

with the new amendments of the Competition Act. Casino

Cosmopol had already contacted the Competition Authority

concerning the amended legislation. Casino Cosmopol

adjusted the restaurant prices and the advertising. The

Competition Authority dismissed the case in January 2011.

International award for the sundsvall casinoIn January 2012, Casino Cosmopol in Sundsvall was ranked the “Land-based Casino of the Year” at the Totally Gaming Awards gala in London. The jury pointed out the Sundsvall casino’s adapting the offering and decor to various demands of the guests, and the good results of the ambition of a world-class hospitality.

DIRECTORS’ REPORT / CASINO COSMOPOL BUSINESS AREA


There were several reasons for the Social Democratic Government in the late 1990s to propose the launch of state-run international casinos in Sweden. It could reduce illegal gaming and increase the state income. Another reason was that casinos locally created more jobs. They would also have a positive impact on Sweden as a tourist destination.

The proposal was initially met with considerable resistance, particu-larly internally from several Social Democratic members of Parliament, who feared that the casinos would increase gambling addiction, attract criminal elements and cause serious social disorder.

1999 On 1 June 1999, the Swedish parliament decided on allowing up to six casinos in Sweden. The Government granted licenses to start four casinos. Six months later, Svenska Spel’s subsidiary Casino Cosmopol was formed. By the autumn of 1999, 24 municipalities had submitted applications for casinos.

2001 Among other rules, the Swedish Casino Act stipulated an age limit of 20. On 1 July 2001, Sweden’s first international casino opened in Sundsvall. A few months later, on 8 December 2001, the casino in Malmö was opened.

2002 In Gothenburg, the casino premiered on 31 August 2002.

2003 The casino in Stockholm opened on 14 March 2003 in the same building that once housed Stockholm’s first movie theatre, the Palladium on Kungsgatan. Within a short period, Svenska Spel had opened not less than four casinos.

2005Since 2005, all four casinos have generated a profit.

2011 In ten years, more than ten million visitors have been registered at Svenska Spel’s four casinos. In 2011, Casino Cosmopol reported net gaming revenue of about SEK 1.2 billion and the highest number of visitors ever.

Casino Cosmopol celebrates its tenth anniversary


svenska spel’s business areas in brief

number of retailers number of retailers 2011 2010

Gaming retailers (providing all games and lotteries) 1,758 1,826

Gaming retailers in rural areas and lone retailers in small towns 822 848

number of gaming retailers, total 2,580 2,674

number of lottery retailers, total 3,540 3,834

number of check-out retailers, total 89 96

number of retailers, total 6,210 6,604

1107 08 09 10

SEK million

7,000

6,000

5,000

4,000

3,000

2,000

1,000

Net gaming revenueGaming & Lotteries business areas 2007–2011

Retailers 79%

svenskaspel.se 18.5%

Subscription 1.6%

Mobile 0.4%

Corporate customers 0.3%

Associations 0.2%

Gaming & Lotteries business areaDistribution by sales channel

net gaming revenue Change

Sek million 2011 2010 Sek million %

Sports betting

Oddset 813 790 23 2.9

Stryktipset1 310 324 –13 –4.1

Europatipset1 140 128 12 9.0

Måltipset 100 110 –10 –9.3

Topptipset 92 87 5 5.8

number games

Lotto 1,625 1,610 16 1.0

Keno and KenoXpress 585 603 –18 –3.0

Joker 513 496 17 3.4

Viking Lotto 43 45 –2 –4.2

Bingo and Pick’n’Click on svenskaspel.se 126 125 1 0.9

lotteries

Triss 1,640 1,621 19 1.2

Tia 65 88 –22 –25.5

Skrap-Spel 104 99 5 5.0

Penninglotten 8 9 –1 –13.2

Lottpaketet 21 29 –8 –27.0

poker

Poker at svenskaspel.se 214 231 –17 –7.2

net gaming revenue, total 6,401 6,395 6 0.1

Gross gaming revenue, total 13,620 13,240 380 2.9

1. 2010 figures include Dubbelvinsten (double winnings).As figures are rounded to SEK million, the amounts in the tables do not always tally.


DIRECTORS’ REPORT / BUSINESS AREAS


number of visits to Casino Cosmopol 2011 2010

Stockholm 453,230 439,340

Gothenburg 361,434 354,480

Malmö 244,321 246,852

Sundsvall 172,860 178,179

number of visits, total 1,231,845 1,218,851

Casino Cosmopol business area net gaming revenue Change


Stockholm 516 506 10 2.0

Gothenburg 354 350 4 1.2

Malmö 240 245 –5 –2.0

Sundsvall 93 90 4 4.0


1107 08 09 10

SEK million

Net gaming revenueCasino Cosmopol business area 2007–2011

1,250

1,000

750

500

250

net gaming revenue Change


Vegas in restaurants 1,859 1,812 48 2.6

Vegas in bingo halls 224 228 –4 –1.5


Gross gaming revenue, total 7,461 7,321 139 1.9

Since amounts are rounded to MSEK, the amounts in the table do not always tally.

Vegas business area

number of business partners and installed vegas vlTs 2011 2010

Restaurants 2,179 2,148

Vegas in restaurants 6,298 6,251

Bingo halls 75 82

Vegas in bingo halls 290 312

1107 08 09 10

SEK million

2,500

2,000

1,500

1,000

500

Net gaming revenueVegas business area 2007–2011

Stockholm 42.8%

Gothenburg 29.4%

Malmö 20.0%

Sundsvall 7.8%

Casino Cosmopol business areaDistribution by casino

Restaurants 89.2%

Bingo halls 10.8%

Vegas business areaDistribution by business area


DIRECTORS’ REPORT / CORPORATE GOVERNANCE REPORT

Corporate Governance Report

tate-owned companies are subject to the

same legislation as private companies, such

as the Swedish Companies Act, the Annual

Accounts Act and the Bookkeeping Act.

Companies active in certain industries may

also be subject to special legislation. In the

State ownership policy, the Government sets forth key

issues of principle regarding corporate governance of all

State-owned companies.

The decisions regarding licences that the Government

grants for Svenska Spel’s operations are outlined on page 15.

The decisions are available from Svenska Spel’s Legal Staff

and on the Company’s website svenskaspel.se.

Principles underlying corporate governance

In addition to what accrues from legislation or other ordi-

nance, the following principles apply to corporate govern-

ance at Svenska Spel:

State ownership policy

Svenska Spel observes the State ownership policy (“owner-

ship policy”). The ownership policy is available at the Govern-

ment’s website, regeringen.se.

Corporate governance of state-owned companies is stated

in the ownership policy. A key aspect of governance is the

Swedish Code of Corporate Governance (“The Code”) shall

be applied in State majority-owned companies. In certain

issues, the Government justifies deviations from the Code, in

compliance with the Code’s principle of “comply or explain”.

Examples of such deviations are the Code’s provisions re gar-

ding the preparation of decisions concerning the nomination

of the Board and auditors.

The Code is available at the Swedish Corporate Govern-

ance Board, bolagsstyrning.se.

Guidelines for remuneration of senior executives

Part of the ownership policy deals with guidelines underlying

the terms and conditions of employment of senior execu-

tives in State-owned companies, which the Government set

on 20 April 2009. According to the State ownership policy,

the Board of Directors in State-owned companies, just as in

listed companies, shall propose guidelines for the remunera-

tion of senior executives for approval, which shall be compat-

ible with Government guidelines.

On 19 April 2011, Svenska Spel’s AGM approved the guide-

lines for the remuneration of senior executives. Svenska Spel

applies these guidelines, which are available at Svenska Spel’s

website svenskaspel.se.

Owner’s mandate

In conjunction with the AGM on 19 April 2011, the share-

holder submitted information to the Board, which included

the owner’s mandate for the Company.

Information on the content of the shareholder’s mandate

for Svenska Spel is available at Svenska Spel’s website

svenskaspel.se.

Svenska Spel is a Swedish limited liability company owned by the Swedish State. The administration of Svenska Spel is handled by the Unit for State Ownership within the Ministry of Finance.

S


Board nomination process

The nomination of the Board members of State-owned

companies is conducted in line with the principles described

in the State ownership policy. These principles replace the

Code’s rules and a nomination committee, as provided in

the Code, does not exist.

Instead, according to the State’s ownership policy, the

following apply:

• The nomination process for Board members is run by

and coordinated by the Unit for State Ownership at the

Govern ment Offices.

• A team analysis the competency requirement based on

the composition of the Board and the Company’s opera-

tions and situation.

• Subsequently, any recruitment requirement is set and

the recruitment process commences.

• The selection of directors is made from a broad-based

recruitment base.

• When the process is finalised, the nominations are pub-

lished in line with the rules of the Code.

Annual General Meeting (AGM)

In accordance with the Articles of Association, Members of

Parliament are entitled to attend the AGM. The ownership

policy states that the public should be invited to attend the

AGM and all State-owned companies should make some

form of arrangement that offers the public the opportunity

to present questions to the executive management. Accord-

ing to the ownership policy, the report that the Board sub-

mits at the AGM regarding the application of previously

decided guidelines for the remuneration of senior executives

should also encompass subsidiaries.

The 2011 AGM was attended by six of the Board’s nine

members plus two employee representatives.

Code regulation Deviation explanation/comment

section 1.3 At the AGM, the Board Chairman and as many of the other Board members present shall ensure that it is competent to make decisions. The CEO shall be present. At the AGM, at least one of members of the Nomination Committee and at least one of the auditors in the Company and all of the Board members shall be present if possible.

Six of the Board’s nine members participated at the AGM. A Nomination Committee pursuant to the Code has not been established.

Three Board members were unable to attend the AGM. The Board nomination process is run and coordinated by the Unit for State Ownership within the Ministry of Finance.

section 2.1–2.7 The Company shall have a Nomination Committee that represents the Company’s shareholders.

A Nomination Committee per section 2.1–2.7 of the Code has not been established.

The Board nomination process is run and coordinated by the Unit for State Ownership within the Ministry of Finance.

section 10.2 The corporate governance report must include information on whether or not the Board members are independent in their relationship with major share-holders.

The dependency relationship to major shareholders is not reported.

The ownership policy of the State specifies that the relevant provisions in the Code primarily aim to protect minority shareholders in companies with broad-based ownership. It is not necessary for companies that are wholly owned by the State to declare inde-pendence in this manner.

Deviations from the CodeSvenska Spel applies the Code with the deviations listed below.

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Board

Size and composition of the Board

The Articles of Association specify that the Board is to com-

prise not less than three and not more than ten directors

appointed by the AGM. Also, pursuant to the Swedish Act on

Board Representation (1987:1245) employees in the private

sector are entitled to appoint three Board members and

three deputies.

According to State ownership policy, the number of Board

members should normally be 6 to 8 persons, with a desired

gender distribution of at least 40%.

Up to the 2011 AGM, the Board consisted of seven Board

members elected by the AGM, including the Chairman.

Of these members, four were women and three men. In

addition, the Board had two members and two deputies

appointed by the employee organisations. Following the

2011 AGM, the Board consists of eight members elected by

the AGM. Of these, four are women and four are men. In

addition, the Board has three members with three deputy

members appointed by the employee organisations.

None of the Board members elected by the AGM work

as executives in the Company or as executives in the

Company’s subsidiaries. The CEO is not a Board member,

but attends Board meetings. All Board members elected

by the AGM are independent in relation to the Company

and executive management. The Unit for State Ownership

at the Government Offices makes the assessment of inde-

pendence.

Board members

Pages 54–55 present each Board member’s age, education,

primary occupational experience, and other significant

appointments outside the Company and when the member

was elected to the Board of Svenska Spel.

The Board’s work procedures

The work of the Board is documented in the Board’s rules of

procedure, which are reviewed and set at least once annually.

The division of competencies among Board members, Board

committees, Chairman of the Board, CEO and internal revision

structure for governance at svenska spel

Board of Directors

AGM

Owner

CEO

RemunerationCommittee

RecruitmentCommittee

Executive management

Nomination process.State ownership policy

AuditCommittee

Internal audit

External audit


are expressed in the Board’s rules of procedure and in the

Board’s instructions to the CEO and to the head of internal

revision.

Board committees

The Board has set up two permanent committees among

its members: a Remuneration Committee, and an Audit

Committee. There was also a temporary Recruitment

Committee in early 2011.

audit Committee

The Audit Committee consists of three members elected by

the Board annually. Since the statutory meeting in April 2011,

they have been Catarina Fritz, (Chairman), Hans Bergenheim

and Eva-Britt Gustafsson. In addition, one of the employee

representatives is entitled to attend and participate in the

Committee meetings.

Without affecting the Board’s responsibility and tasks in

general, the Audit Committee’s task includes monitoring the

Company’s financial reporting, monitoring the effectiveness

of the Company’s internal control, internal auditing and risk

management in respect of financial reporting, and to keep

itself informed of the audit of the annual report and consoli-

dated accounting.

The complete tasks of the Audit Committee are shown in

Chap. 8, Section 49 of the Swedish Companies Act (2005:551).

The Board has delegated its right of decision to the Audit

Committee for the focus of internal auditing, in part through

preparation of annual internal auditing plans, including the

budget, as well as guidelines for the non-auditing assign-

ments that the Group may purchase from the Company’s

auditors, and the appointment of internal auditors.

Internal and external auditors take part in meetings of the

Audit Committee, thus enabling information to be shared on

a regular basis and for coordination between the internal and

external auditing work. The Company’s CFO also attends the

committee’s meetings to present reports.

The Audit Committee reports after each meeting to the

entire Board. During 2011, the Audit Committee held seven

meetings. Attendance of the members at the committee’s

meetings is shown on pages 54–55.

Remuneration Committee

The Remuneration Committee consists of three members

elected annually by the Board. The members of the Remu-

neration Committee since the statutory Board meeting in

April 2011 are Anitra Steen (Chairman), Michael Thorén and

Christer Åberg. The CEO, HR Manager and Chief Legal Counsel

also attend. In addition, one of the employee representatives

is entitled to be present and participate in the Committee

meetings.

In line with the Board’s work procedures, the main tasks

of the Remuneration Committee comply with the Code.

The Board has not delegated any right of decision to the

Remuneration Committee.

In 2011, the Remuneration Committee met on four

occasions. Attendance of members at Committee meetings

is presented on pages 54–55.

Recruitment Committee

The Recruitment Committee, established in September 2010,

was of a temporary nature. The committee’s main task was

to prepare questions ahead of the recruitment of a new

CEO, which commenced during the autumn of 2010. The

committee’s work was concluded in the spring of 2011.

The Committee consisted of four members selected by the

Board, namely, Margareta Winberg, Chairman; Björn Fries,

Lena Melinder and Martina Ravn.

In 2011 the Remuneration Committee held three meetings.

Attendance of members at Committee meetings is presented

on pages 55–55.

Work of the Board in 2011

Apart from the statutory meeting, the Board held ten meet-

ings and three per capsulam meetings. The Board’s work

focused on such matters as applications to the Government

for operational licenses, the Company’s future goals and

strategies, and the recruitment of a new CEO. The Board was

assisted by the Board Secretary, Bengt Palmgren, who is the

company’s Chief Legal Counsel.

Attendance at Board meetings is shown in the presentation

on pages 54–55.

>>



CEo

The presentation on page 56 shows the CEO’s age, main

education, work experience, important commissions outside

the company and significant holdings in companies with

which Svenska Spel has major business relations.

Internal control

Pursuant to the Swedish Companies Act and the Code, the

Board is responsible for internal control, which means the

Company shall have favourable internal control and formal

routines that ensure that the set principles for financial

reporting and internal control are observed. Responsibility

also includes ensuring that the Company’s financial reports

are drawn up in compliance with legislation, applicable

accounting standards and other external requirements.

According to the Code, the Board’s description of internal

controls is limited to the financial reporting.

Svenska Spel uses COSO’s framework in drawing up and

describing the structure of internal control. The framework

comprises the following components: control environment,

risk assessment, control activities, information and communi-

cations, as well as follow up.

Control environment

The basis for internal control consists of the control environ-

ment with organisation, decision-making channels, authori-

sation and responsibility, which are documented and com-

municated in governance documents.

Each year, the Board sets up the following documents that

combine with legislation and other external regulations to

form the framework that sets the platform of the Group’s

processes for good internal control in respect of financial

reporting.

• Work procedures for the Board

• Work procedures for the Audit Committee

• The Board’s instructions for the CEO

• Instructions for internal auditing

• Policies for risk management and financial management.

• Guidelines for attestation and for attestation and payment

instructions.

Guidelines, instructions and work routines for on-going

accounting, closing accounts and financial reporting are

otherwise documented at the detailed level.

Risk assessment

The group’s processes for risk assessment and risk manage-

ment, as well as the current risk status, are dealt with each

year by the Board. The Board assesses and monitors risks and

the quality of financial reporting via the Audit Committee.

The Audit Committee maintains contact with the Group’s

internal and external auditors to discuss risks in financial

reporting.

Svenska Spel has a process for identifying, valuing and

managing risks and uncertainty factors on a regular basis.

Reviews are currently in progress to efficiency-enhance risk

management.

The Group’s risks are compiled and valued each quarter

and, effective 2011, the on-going risk assessment is integrated

into the Group’s internal financial monitoring. The goal of

reporting is to raise the focus on on-going risk analysis and

catch significant changes in the risk profile. Reporting is to

the Group senior executive management.

Risk analysis as regards risks that lead to shortcomings in

financial reporting are updated. On the basis of the risk

assessment, decisions are made as regards substantial risks

and the controls and routines that need to be strengthened

to ensure favourable control so that significant shortcomings

do not extend to the annual report.

The largest and most considerable risks for the Group’s

financial reporting are linked to the process for accounting

for gaming-related transactions. The process is highly trans-

action-intensive and requires a high level of appropriate

controls in the gaming system.

Control activities

Svenska Spel’s process descriptions for financial reporting

include a risk assessment and the controls established for

identifying risks. The process is assessed and adjusted in an

effort to ensure that it complies with applicable regulations

in the form of good accounting practices, applicable legis-

lation and ordinance, as well as with other requirements.


The Group’s control function is based on an overarching

staff function but each controller works close to operations

and is included in the executive management groups in each

business and operating area and staff. The function is respon-

sible for ensuring that follow-up is conducted towards goals,

forecasts and earlier accounting periods. Key data are studied

and calculations tested and checked. Detailed analyses are

made of reported data and results and are delivered in a

compiled monthly report that is broken down by unit, with

comments. The report is delivered to senior management

and operations managers and, in selected parts, to the Board.

The joint group accounting function draws up consolidated

accounting and financial reporting in close cooperation with

the controller function and operational managers. The work

includes built-in control activities to manage the risk of incor-

rect accounting of income statement and balance sheet items.

Compliance with policies, guidelines and instructions that

affect financial reporting is examined and any deviations are

reported to the manager in charge.

information and communications

Governance documents in the form of policies, guidelines

and significant instructions for financial reporting are pre-

sented on Svenska Spel’s intranet and updated. All employ-

ees have access to the intranet and employees directly

involved are informed separately of any changes. Within the

framework of the annual employee dialogue, each manager

checks that the employee is updated in respect of the rele-

vant governance documents.

Training courses are conducted a few times annually as

required with new managers to ensure that information has

been distributed and received in the appropriate manner.

Svenska Spel is certified according to the security standard

of the WLA (World Lottery Association). The security standard

also includes meeting the requirements in terms of manage-

ment systems or information security in ISO/IEC 27001:2006.

The standard includes requirements to ensure confidentiality,

accuracy and traceability for all business-critical information.

During the year, Svenska Spel focused on the goal of receiving

certification according to the Payment Card Industry (PCI),

which are the regulations of VISA and Master Card. PCI certifi-

cation is a security and quality certification aimed at increas-

ing data security among all parties who store, process or

transfer card data. Svenska Spel received certification in line

with PCI during 2011.

Follow up

The Board receives the financial information that the Group

executive management provides ahead of each regular

Board meeting. The Board also has access to monthly finan-

cial reporting.

Follow-up and control of the Company’s operations and

financial status are conducted at the Group level and for each

area of responsibility. Application of Group policies is followed

up annually and reported to the Board. The unit responsible

for a policy is also responsible for checking that it is observed.

Reporting should indicate the emergence of any deviations.

At the statutory Board meeting of the Board in connection

with the AGM, the CEO must show written proof that an

examination has been made of the Group’s policies during

the preceding year.

Svenska Spel has an internal audit function that reports

directly to the Board’s Audit Committee. The internal audit

assists the Board and CEO with independent and objective

surveys aimed at proposing actions and improvement

programmes. The function supports the Group’s other units

in attaining their goals by evaluating process effectiveness

for control, risk identification and risk control.

During autumn 2011, the Board also decided to set up

a Group-wide compliance function for control in the areas

of licences, personal data, marketing, gifts and benefits, as

well as the prevention of money laundering and financing

of terrorism.



name Anitra steenChairman

Hans BergenheimBoard member

Björn FriesBoard member

Catarina FritzBoard member

Eva-Britt GustafssonBoard member

position Head of Corporate market in the Baltic States, Swedbank

Self-employed, lecturer, moderator, teacher

CFO Frösunda LSS AB CEO Apoteksgruppen i Sverige AB

education BSc in behavioural and social sciences.

Economist, University of Gothenburg School of Business, Economics and Law.

Economist. MSc (Econ). MSc (Econ).

elected 2011 2010 2007 2011 2008

Born 1949 1960 1951 1963 1950

Other commissions

Board Chairman at Telge Inköp: Board member of Läntmännen, IVA, Member of SNS’ Governing Council, Drivhuset Sverige.

Chairman of STF Ingenjörs-utbildning and Lateus AB, Board member of Human Life, White Arkitekter AB and AB White-Intressenter, Deputy member of AB Hemfliten.

Board member: DnB Nor, Carlsson Fonder AB, Forsaprojekt AB.

Chairman of Akademiska Hus AB.

Background CEO, Systembolaget. Director General of the Swedish Tax Authority; State Secretary Ministry of Finance; Director General, Swedish Agency for Higher Education Services; State Secretary, Ministry of Education; Director, Ministry of Finance.

CEO Lateus AB, CEO AB Previa,Market Director, Alecta Pension Insurance,CEO, Ikanobanken.

Manager of Prevention Centre Stockholm, Representative of the Workers’ EducationalAssociation (ABF), Represen-tative of the Swedish Social Democratic Party, Local gov-ernment commissioner in Karlskrona, National narcotics coordinator and coordinator of the Swedish Social Demo-cratic Party’s programme against youth violence. Hon. Doctorate in medical science.

CFO Frösundakoncernen,CFO Addici Group, CFO Personec; Group Controller OMX Group; CFO Stockholm Stock Exchange, Accounting Manager, Investor; Authorised Public Accountant, PwC.

President Venantius AB. Bank director Nordbanken (Nordea); CEO, Securum Finans AB.

attendance

Recruitment Committee 2/3

Audit Committee 6/7 5/5 7/7

Remuneration Committee

4/4 2/2

Board meetings 7/7 11/11 9/11 6/7 10/11

Dependent /independent

Independent Independent Independent Independent Independent

Boar

d of

D

irec

tors

Svenska Spel’s employees can exert influence via their employee representatives on the Board.


Närvaro uppdateras

Peter Cernvall born 1970Employee representative (deputy) since 2009. Project manager Vegas business area.

Patrik lindellborn 1968Employee representative (deputy) since 2011.Shift Manager & Poker Manager Casino Cosmopol Stockholm.

loi Diepborn 1977Employee representative (deputy) since 2011. Inspector/dealer Casino Cosmopol Gothenburg.

lena JönssonBoard member

Michael ThorénBoard member

Christer ÅbergBoard member

Anders AnderssonEmployee representative (Board member)

Martina RavnEmployee representative (Board member)

Jenny BengtssonEmployee representative (Board member)

Former General Director of the National FortificationsAdministration

Deputy Under-Secretary Ministry of Finance

CEO Arla Sverige Systems developer and systems architect

Acting Risk Manager Casino Host Casino Cosmopol Stockholm

Master of Laws and graduate in administrative social work.

Graduate in Business Administration.

Economist IHM Stockholm.

Studies in mathematics and mathematical statistics Uppsala University.

Master’s degree (IT Economics), Gotland University.

Communications and learning, StockholmUniversity and Stockholm College of Teaching.

2007 2011 2011 2007 2009 2011

1958 1969 1966 1954 1972 1983

Director of the inspection council of the Swedish Defence Recruitment agency and the inspection council of the Energy Markets Inspectorate.

Board member, Infranord AB,Samhall AB.

Chairman SIK – Institutetför Livsmedel och Bioteknik AB, Board member DLF, Board member RynkebyFoods A/S,Board Board member, The Swedish Food Industry (Li).

Director General, Swedish Gaming Board.

Analyst ABN AmroBank; Project Manager, Retriva Kredit AB.

Managing DirectorScandinavia, Various positions in Unilever.

Systems engineer, Postgirot and Tipstjänst/Svenska Spel.

Process Manager Poker, Svenska Spel 2008–2010; Poker operator, Svenska Spel 2006–2008.

Secretary, Hotel and Restaurant Union Stockholm-Gotland, Board member, Left Party Trade Union- Political Coordination Group; Chairman, Consultation Unit, Casino Cosmopol.

3/3

2/2 4/4 4/4

6/11 7/7 5/7 11/11 11/11 4/7

Independent Independent Independent Dependent Dependent Dependent

Deputy members



name lennart KällCEO and President

Marie AvanderManager, Vegas result area

Anna BjörklundHuman Resources Director

Annika FermCommunication Manager

Per JaldungManager, Casino Cosmopol result area

education Graduate in Business Administration,Karlstadt University.

Marketing economy DIHM, IHM Business School.

BSc in (Human Resources and Labour Relations) with advanced studies in Person-nel Management, 40 credits in English, Stockholm University.

Marketing economy DIHM, IHM Business School.

Police senior management education. Swedish Police College Legal studies atUniversity of Uppsala).

employed 2011 2006 2008 2011 2002

Born 1958 1963 1964 1968 1967

Other commissions

— — — — —

Background CEO, Wasa Kredit2009–2011, CEO and President, Ticket Travel Group 2003–2009, CEO, ICA Banken 2001–2003, CEO, SEB Finans(TryggFinans) 1995–2001.

Business area manager Restaurant Gaming & Bingo Halls,Svenska Spel 2008–2009; Purchasing Manager, Svenska Spel, 2006–2008; Purchasing manager Reitan Handel (Pressbyrån, 7-Eleven) 2001–2006; Sales, marketing, purchasing Reitan Service-handel 1993–2000.

Project Manager Change Management, SEB 2005–2008; President Stensnäs Kurs & Konferens 2004–2005; President Pengar i Sverige AB 2003–2004, ProductionManager, Pengar i Sverige AB2002–2003; HR manager, Pengar i Sverige AB 2000–2002; Various HR Positions, SEB, 1988–1999.

In charge of CRS, Carlsberg Sweden 2010. Information Manager, Cision AB 2008 –2009. Market Manager OMX Nordic Exchange. Communications Manager, Tradimus AB, 20005–2007; Communications Manager, Q-Med 2003–2005, Communications Manager DHL International 1997–2003.

Casino manager Casino Cosmopol Gothenburg 2005–2008, Security manager Casino Cosmopol Stockholm2002–2005, Swedish Criminal Investigation Department1995–2002, Stockholm County Police Authority1991–1995.

Exec

utiv

e m

anag

emen

t


Johan lindvallManager, Parent Brand

Marie loobChief Financial Officer and Vice President

Jörgen olofssonIT Manager

Bengt PalmgrenChief Legal Counsel

Peter ZällManager, Sports games & Lotteries result area

Journalist, Executive MBA, Master of Strategy.

BSc (Economics),örebro University. Master Leadership, Mgruppen.

Graduate engineer, Royal Institute of Technology, Management education,Swedish Tax Agency.

Master of Laws, Stockholm University.

IHR 60 credits, Market Economy Berghs School of Communication.

2003 1997 2007 2000 2012

1971 1963 1965 1952 1961

— — — — Board assignment for MoeJoe’s AB.

Positions at Svenska SpelSponsorship Manager 2005–2012, sports editor svenskaspel.se 2003–2005. Journalist Swedish Radio 1994–2004, presenter/reporter Canal Plus, Kanal 5 1994–2004.

Positions at Svenska SpelSales Manager, Internet Svenska Spel 2009–2010,Manager Associations business area Svenska Spel, CFO Svenska Spel 2005–2006, Accounting Manager and teacher at Humanus Utbild-ning AB, Administrative Manager/controller, Visby Hospital, 1987–1997.

Positions at Svenska Spel Head of Production operations area 2009–2011, IT operations manager Svenska Spel 2007–2009, Development manager Swedish Tax Authority 2005–2007, various manage-ment positions Swedish TaxAgency IT 1998–2004.

Company Solicitor, Akza Nobel 1997–2000; Corporate Lawyer, Posten 1990–1997; Chief Legal Officer Banco Finans 1983–1989.

Consultant 2011–2012, CEO Illum 2006–2010, CEO and Marketing Director NK 2002–2006, Europe Manager Nike Golf 1999–2001, Marketing Director Nike Europe & Nordics 1993–1999.


he distribution of available funds is based

on the 2010/11 budget proposal. The

Swedish Parliament resolved on 20 Decem-

ber 2011 to approve the Government’s

budget bill 2012 (2011/12:1), which, among

other points, means that Parliament author-

ises the Govern ment to table a motion at the Svenska Spel

2012 AGM for a contribution corresponding to 1/26 of the

Company’s surplus in 2011 from Penninglotten to be made

to art, theatre and other cultural purposes.

Non-restricted equity in the Parent Company amounted to

SEK 5,018,180,579 (4,776,432,955), of which SEK 5,008,205,081

(4,770,490,120) represent net profit for the year and SEK

9,975,498 (5,942,835) are retained earnings.

Distribution is to take place following the adoption of the

minutes of the AGM with dividends to the State made by

30 June 2012. Distribution for cultural purposes is to be made

after requisition.

Non-restricted equity in the Parent Company

Sek

Retained earnings 9,975,498

Net profit for the year 5,008,205,081

Total 5,018,180,579

The Board of Directors and the CEO propose that the above

amount be distributed as follows:

Sek propexpenditure

area

For cultural* purposes 501,909 2011/12 17

To be paid to the Swedish State 5,006,022,985

Carried forward 11,655,685

Total 5,018,180,579

* SEK 178,554 pertains to payment for the year; the remaining amount has been adjusted for inaccurate calculation from previous years.

Proposed distribution of profits

T

Svenska Spel’s articles of association stipulate that the Group’s available profits are to be distributed as prescribed by the Government.



Events after balance sheet dateEffective January 2012, the Production and Development

operating areas were merged to form a single IT unit.

The Sundsvall Casino was awarded the “Land-based Casino

of the Year” at the Totally Gaming Awards gala held in London

on 23 January 2012.

Marie Loob was appointed Vice President of Svenska Spel.

This new role is added to Marie Loob’s assignment as head of

Group staff Finance & Security.

Johan Lindvall, formerly head of sponsorship at Svenska

Spel, was appointed head of the Parent Brand. Johan Lindvall

reports to the CEO and is a member of Executive management.

Peter Zäll takes over the position of head of the Sports

games & Lotteries result area as of 3 April 2012, succeeding

Mattias Mildeborn. Peter Zäll will be a member of Executive

management and will report to the CEO.

statement of the Board on proposed

distribution of profits

Statement of the Board of AB Svenska Spel in accordance

with Chapter 18 section 4 of the Annual Accounts Act

(2005:551) with reference to the Board’s proposed distribu-

tion of profits prior to the Company’s AGM on 24 April 2012:

The Board has proposed that AB Svenska Spel’s profit avail-

able for distribution for the 2011 financial year be distributed

in accordance with the motion made to the AGM.

The proposed profit distribution does not affect AB Svenska

Spel’s restricted equity as shown in the latest balance sheet.

After payment in accordance with the profit distribution, AB

Svenska Spel will have non-restricted equity of SEK 11,655,685

(9,975,498) and total equity of SEK 11,895,685 (10,215,498), not

including changes that occurred after the balance sheet date.

If changes after the balance sheet date are also included,

non-restricted equity is affected by profit for a period of at

least four months before payment of the proposed profit

distribution. This means an increase in non-restricted equity

of approximately SEK 1.5 billion (1.5).

The Parent Company’s and the Group’s equity ratio and

liquidity will increase over time but are nevertheless consid-

ered secure because of the nature of the market in which the

Company operates and the extremely strong cash flow it

generates. The Parent Company and the Group will thus be

able to comfortably meet their short and long-term obliga-

tions, even after the proposed profit distribution.

Even taking into account the proposed distribution of

profits, the Parent Company and the Group will be able to

make the necessary investments required for the Group’s

development and continued success.

Accordingly, the proposed profit distribution is also justifiable

with respect to the demands imposed by the nature, scope

and risks on equity in the Parent Company and Group, as well

as with respect to the Parent Company and Group’s consoli-

dation requirements, liquidity and general position.


FöRVALTNINGSBERäTTELSE / BOLAGSSTYRNINGSRAPPORT


Financial statements 61GROUp Consolidated statement of comprehensive income 62 Consolidated balance sheet 63 Consolidated statements of cash flows 64 Consolidated statement of changes in equity 64

paRenT COMpanY income statement 65 Consolidated statement of comprehensive income 65Balance sheet 66 Statement of cash flows 68 Statement of changes in equity 68

nOTeS 69

Board signatures 92 auditors’ report 93Five-year summary 94

Financial statements61–94


Financial statements

Consolidated statement of comprehensive income1 January–31 DecemberSek million note 2011 2010

Net sales from gaming operations, etc. 2, 3 7,919 7,885

Capitalised work for own account 28 3

Employee expenses 5 –1,011 –989Other external expenses 6, 25 –1,710 –1,758Amortisation, depreciation and impairment of intangible assets and property, plant and equipment 9, 10 –286 –346Operating profit 4,940 4,795

profit on financial investments

Interest and other finance income 7 204 86Interest expenses and other finance costs 7 –138 –113Total financial items 66 –27

profit after financial items 5,007 4,768Tax 8 0 –2

InCOMe FOR THe YeaR 5,007 4,766

Other comprehensive income — —

TOTal COMpReHenSIve InCOMe 5,007 4,766

Attributable to equity holders of the Parent Company 5,007 4,766

earnings per share 18Number of shares, 000s 2,000 2,000Earnings per share, SEK thousand 2,503 2,383


Sek million note 31 December 2011 31 December 2011

aSSeTSnon-current assetsIntangible assets 4, 9 209 228Property, plant and equipment 10 923 996Financial assets 11, 12 1,493 1,525Total non-current assets 2,624 2,749

Current assetsTrade and other receivables 12, 13, 16 538 495Set off National Debt Office 11, 12, 27 1,200 1,200Prepaid expenses 11, 14 143 116Current investments 11, 12, 16 1,337 654Cash and cash equivalents 11, 12, 15, 16 2,264 2,273Total current assets 5,483 4,737TOTal aSSeTS 8,107 7,486

TOTal eQUITY anD lIaBIlITIeSequity 17Share capital 0 0Reserves 0 0Retained earnings 5,007 4,766Total equity 5,007 4,766

non-current liabilitiesUnpaid winnings 19, 23 1,419 1,293Other non-current liabilities 20, 23 36 40Total non-current liabilities 1,455 1,333

Current liabilitiesTrade payables and other liabilities 12, 21, 23 625 568Unpaid winnings 12, 19, 23 501 395Deferred income 12, 24 99 156Settlement funds 12, 22, 23 136 125Funded winnings 12, 22, 23 285 143Total current liabilities 1,645 1,386

Total liabilities 3,100 2,719TOTal eQUITY anD lIaBIlITIeS 8,107 7,486

Consolidated balance sheet



Consolidated statements of cash flows1 January–31 December Sek million note 2011 2010

Operating activities 16Income for the year 5,007 4,766Adjustments for items not included in cash flow Amortisation, depreciation and impairment of

intangible assets and property, plant and equipment 9, 10 286 346 Proceeds from the disposal of non-current assets 0 1 Change in pension provision 20 –1 –1 Other adjustments –3 35Cash flow from operating activities before changes in operating assets and liabilities 5,289 5,148Cash flow from changes in operating assets and liabilitiesChange in trade and other receivables –44 –2Change in other current assets –27 –8Change in trade payables and other liabilities –31 –8Change in other operating liabilities 413 –294Cash flow from operating activities 5,600 4,836

Investing activities 16Investments in intangible assets 9 –35 –29Purchases of property, plant and equipment 10 –162 –174Disposals of property, plant and equipment 4 5Investments in financial assets –2,097 –848Divestment of financial assets 1,584 381Net change in investments for Triss Månadsklöver –135 –69Cash flow from investing activities –842 –735

Financing activitiesDistribution of previous year’s profit 17 –4,766 –4,877Cash flow from financing activities –4,766 –4,877

Cash flow for the year –9 –776Cash and cash equivalents at beginning of the year 15 2,273 3,049Cash and cash equivalents at end of the year 15 2,264 2,273

Consolidated statement of changes in equitySek million note Share capital Reserves

Retained earnings

Total equity attributable to equity holders of the parent Company

Balance 1 January 2010 0,2 0,1 4,977 4,977Comprehensive incomeIncome for the year 4,766 4,766Other comprehensive income — —Total comprehensive income 9,743 9,743

Transactions with equity holdersDividends pertaining to 2009 –4,977 –4,977Total transactions with equity holders –4,977 –4,977

Balance 1 January 2010 0,2 0,1 4,766 4,766

Comprehensive incomeIncome for the year 5,007 5,007Other comprehensive income — —Total comprehensive income 9,773 9,773

Transactions with equity holdersDividends pertaining to 2010 –4,766 –4,766Total transactions with equity holders –4,766 –4,766Balance at 31 December 2011 17 0,2 0,1 5,007 5,007


Income statement, Parent Company

The Parent Company had no items recognised in other comprehensive income in 2011 or 2010. Thus the Parent Company’s income

for the year is also the total comprehensive income for the year. Accordingly, the Parent Company does not present a Statement of

Comprehensive Income.

1 January–31 December Sek million note 2011 2010

Net sales from gaming operations, etc. 2 6,636 6,614

Capitalised work for own account 28 3

Employee expenses 5 –558 –550Other external expenses 6, 25 –1,500 –1,551Amortisation, depreciation and impairment of intangible assets and plant and equipment 9, 10 –221 –259Operating profit 4,384 4,257

profit on financial investments Profit from participations in Group companies 28, 29 554 536Interest and other finance income 7 206 90Interest expenses and other finance expense 7 –136 –113Total financial items 624 514

profit after financial items 5,008 4,770Tax 8 — —

InCOMe FOR THe YeaR 5,008 4,770




aSSeTSnon-current assetsIntangible assets 9 185 201Property, plant and equipment 10 Buildings and land 22 22 Construction and extension 19 24 Construction in progress 0 0 Equipment and computers 363 406Financial assets Participations in Group companies 28 71 71 Non-current receivables, Group companies 472 505 Other holdings of non-current securities 11, 12 1,493 1,525Total non-current assets 2,626 2,756

Current assetsCurrent receivables Trade receivables 13 358 327 Receivables from Group companies 557 539 Set off National Debt Office 11, 12, 27 1,200 1,200 Other receivables 13, 16 166 153 Prepaid expenses and accrued income 14 114 87Current investments 11, 12, 16 1,337 654Cash and bank 15, 16 2,023 2,185Total current assets 5,754 5,144

TOTal aSSeTS 8,380 7,900

Balance sheet, Parent CompanyAssets



TOTal eQUITY anD lIaBIlITIeS

equity 17Restricted equity Share capital 0 0 Statutory reserve 0 0Non-restricted equity Retained earnings 10 6 Income for the year 5,008 4,770Total equity 5,018 4,776

non-current liabilities Liabilities to Group companies 0 0 Unpaid winnings 19 1,419 1,293 Other non-current liabilities 20 34 39Total non-current liabilities 1,454 1,331

Current liabilities Trade payables 21 224 225 Unpaid winnings 19 501 395 Liabilities to Group companies 417 552 Settlement funds 22 136 125 Funded winnings 22 227 95 Other current liabilities 21 218 184 Accrued expenses and deferred income 24 185 216Total current liabilities 1,908 1,792

TOTal eQUITY anD lIaBIlITIeS 8,380 7,900

MeMORanDUM ITeMS Pledged assets 26 1 1Contingent liabilities 26 — —

Balance sheet, Parent CompanyEquity and liabilities



Statements of cash flows, Parent Company1 January–31 December Sek million note 2011 2010

Operating activities 16Income for the year 5,008 4,770Adjustments for non-cash items Amortisation, depreciation and impairment of

intangible assets and property, plant and equipment 9, 10 221 259 Proceeds from disposal of non-current assets 0 1 Anticipated dividend Casino Cosmopol AB 29 –554 –536 Change in pension provision 20 –2 0 Other adjustments –3 35Cash flow from operating activities before changes in operating assets and liabilities 4,671 4,529

Cash flow from changes in operating assets and liabilitiesChange in trade receivables –31 –1Change in other current assets –39 11Change in trade payables –14 19Change in other operating liabilities 253 –317Cash flow from operating activities 4,840 4,241

Investing activities 16Purchases of intangible assets 9 –35 –9Purchases of property, plant and equipment 10 –125 –156Disposal of property, plant and equipment 3 5Purchases of financial assets –2,097 –848Disposal of financial assets 1,584 381Net change in investments for Triss Månadsklöver –135 –69Net change in long-term receivable to subsidiaries 33 57Cash flow from investing activities –772 –639

Financing activitiesDividends received from subsidiaries 17 536 540Payment to the owner, Swedish State 17 –4,766 –4,877Cash flow from financing activities –4,230 –4,337

Cash flow for the year –162 –735Cash and cash equivalents at beginning of the year 15 2,185 2,920Cash and cash equivalents at end of the year 15 2,023 2,185

Statement of changes in equity, Parent CompanyRestricted equity non-restricted equity

Sek million note Share capitalStatutory

reserveRetained earnings

Income for the year Total equity

equity, 31 December 2009 0,2 0,1 13 4,970 4,983Income for the year — 4,770 4,770Total comprehensive income 13 9,740 9,753Dividends pertaining to 2009 –7 –4,970 –4,977equity, 31 December 2010 0,2 0,1 6 4,770 4,776

Income for the year — 5,008 5,008Total comprehensive income 6 9,778 9,778Dividends pertaining to 2010 4 –4,770 –4,766

equity, 31 December 2011 17 0,2 0,1 10 5,008 5,018 The number of shares outstanding is 2,000, and has not changed during the financial year.


Page

note 17 Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

note 18 Earnings per share. . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

note 19 Unpaid winnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

note 20 Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . 88

note 21 Trade payables and other liabilities . . . . . . . . . . . . . . . . . 88

note 22 Settlement funds and funded winnings . . . . . . . . . . . . . . 88

note 23 Maturity structure for liabilities . . . . . . . . . . . . . . . . . . . . 89

note 24 Deferred income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

note 25 Leasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

note 26 Contingent liabilities, pledged assets and

future obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

note 27 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

note 28 Participating in Group companies. . . . . . . . . . . . . . . . . . 91

note 29 Profit from participating in Group companies . . . . . . . . . . 91

note 30 Uncertainty in estimates and assessments . . . . . . . . . . . . 91

note 31 Information about the Parent Company . . . . . . . . . . . . . . 91

Note 1 accounting and valuation policies

Conformity with standards and legislationThe consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) published by the International Accounting Standards Board (IASB) and interpretations by the International Financial Reporting Interpretations Committee (IFRIC) as endorsed by the European Union (EU) for application within the EU, subject to the exceptions indicated below. Also, the Annual Accounts Act and the recommendations of the Swedish Financial Reporting Board enti-tled RFR 1 “Additional Accounting Regulations for Groups”, have been applied. The Parent Company applies RFR 2 “Accounting for Legal Entities”, and applies the same accounting policies as the Group except as specified under “Parent Company’s accounting policies”.

Assumptions underlying preparation of the Parent Company and consolidated financial statementsThe reporting currency of the Group and the functional currency of the Parent Company is SEK. All amounts, unless otherwise stated, are rounded to the nearest million.

Preparing the financial statements in conformity with IFRS requires executive management to make estimates, judgements and assumptions affecting the application of accounting policies and reported amounts. Estimates and assessments are based on past experience and reasonable expectations regarding future events. The outcome may diverge from these estimates and assessments. Estimates are regularly reviewed. Estimates that have an impact on the financial statements are described in Note 30.

Amendments to accounting policiesThere have been no changes to accounting policies compared with the preceding financial year.

new and amended standards and interpretations, 2011The following new and amended standards became statutory for the first time as of the financial year commencing 1 January 2011.

IAS 24 Related Party DisclosuresThis reworked standard clarifies and simplifies the definition of related parties and eliminates the requirement for companies related to the State to provide details of all transactions with the State and other companies related to the State. The amendment does not give rise to any significant changes for Group disclosures.

IAS 32 – Financial instruments presentationThe amendment pertains to the classification of subscription rights, options and warrants in other functional currencies. As the Group does not hold any of these instruments, the amendment does not give rise to any change for the Group.

Upgrades of IFRS standardsUpgrades pertain to the following standards: IFRS 1, Initial application of IFRS; IFRS 3, Business Combinations; IFRS 7 Financial Instruments: Disclo-sures; IAS 1, Presentation of Financial Statements, IAS 27 Consolidated accounting and separate financial reports; IAS 34, Interim Financial Reporting; and IFRIC 13 Customer Loyalty Programmes. The amendments have no material effect on the consolidated financial statements.

Amendments to IFRICThe amendments to IFRIC 14 – The Limit on a Defined Benefit Asset, Mini-mum Funding Requirements and their Interaction” a IFRIC 19 – Extinguishing Financial Liabilities with Equity Instruments, do not affect the Group.

Notes

Page

note 1 Accounting and valuation policies . . . . . . . . . . . . . . . . . 69

note 2 Revenue per key category. . . . . . . . . . . . . . . . . . . . . . . 74

note 3 Segment reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

note 4 Acquisition of operations . . . . . . . . . . . . . . . . . . . . . . . 75

note 5 Employees, employee costs and benefits . . . . . . . . . . . . . 75

note 6 Auditors’ fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

note 7 Financial income and expenses . . . . . . . . . . . . . . . . . . . 79

note 8 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

note 9 Intangible assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

note 10 Property, plant and equipment . . . . . . . . . . . . . . . . . . . 81

note 11 Financial risk management . . . . . . . . . . . . . . . . . . . . . . 82

note 12 Financial instruments. . . . . . . . . . . . . . . . . . . . . . . . . . 84

note 13 Trade and other receivables . . . . . . . . . . . . . . . . . . . . . 86

note 14 Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

note 15 Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . 86

note 16 Reclassification of cash and cash equivalents. . . . . . . . . . . 86

List of notes


notes

new and amended standards and interpretations that have not yet become effective but which may eventually affect the Group

IFRS 7 Financial Instruments: DisclosuresThe amendments to IFRS 7 increase disclosure requirements in conjunction with the transfers of financial assets and apply to financial years commenc-ing 1 July 2011 or later. The Group management has not yet conducted a detailed analysis of the effects of application and is thus unable to quantify the effects.

IFRS 7 Financial Instruments: Disclosures; and IAS 32 Financial instruments, ClassificationThe amendments to IFRS 7, which gain force as of 1 January 2013 or later, extend the disclosure requirements for the netting of financial assets and liabilities. Amendments to IAS 32, which gain effect as of 1 January 2014 or later, in respect of the netting of financial assets and liabilities clarify how netting rules are to be applied. Group executive management is of the opinion that the amendments of IAS 32 and IFRS 7 will not have any mate-rial effect on the Group.

IFRS 9, Financial InstrumentsThe amendment to IFRS 9 issued in December 2011 implies that IFRS 9 will apply to financial years commencing on 1 January 2015 or later. The most significant impact of IFRS 9 in terms of the classification and valuation of financial liabilities is related to changes in fair value attributable to changes in the credit risk of a financial liability (recognized at fair value in the income statement).

In the case of financial liabilities classified at fair value via the income statement, it applies that the change in the amount in fair value terms that is due to the change in credit risk for the liability shall, according to IFRS 9, be presented in other comprehensive income. Group executive manage-ment has not yet conducted a detailed analysis on the effects of the appli-cation of the amendments and is thus unable to quantify any such effects.

IFRS 13, Fair value measurementThe new standard, which is to be applied in a forwarding-looking manner as of 1 January 2013, deals with accounting and disclosure in respect of fair value. The standard clarifies how fair value is determined and the disclosures required. Group executive management has not yet conducted a detailed analysis on the effects of the application of the amendments to IFRS 13 and is thus unable to quantify any such effects.

IAS 1, Presentation of Financial Statements The amendment, which comes into effect as of 1 July 2012, relates to how items are presented in the report for other comprehensive income. The Group will implement the changes required by the amendment.

new and amended standards and interpretations that have not become effective and which currently are not viewed as affecting the Group:

Standard effective

IAS 12, Income Taxes 1 January 2012

IFRS 10, Consolidated Financial Statements 1 January 2013

IFRS 11, Joint arrangements 1 January 2013

IFRS 12, Disclosures of Interests in Other Entities 1 January 2013

IAS 19, Employee Benefits 1 January 2013

IAS 27, Investments in Associates 1 January 2013

IAS 28, Consolidated Accounting and Separate Financial Reports 1 January 2013

ClassificationNon-current assets and non-current liabilities consist substantially of the amounts expected to be recovered or paid more than 12 months after the balance sheet date. Current assets and current liabilities consist purely of amounts expected to be recovered or paid less than 12 months from the balance sheet date.

Assets and liabilities are recognised at cost, with the exception of certain financial assets and liabilities measured at fair value.

Consolidated financial statementsThe consolidated financial statements comprise the Parent Company AB Svenska Spel and all companies in which the Parent Company directly or indirectly holds more than 50 per cent of the voting rights, or otherwise exercises controlling influence. Controlling influence entails the right to develop the financial and operative strategies of a company with a view to gaining economic benefit.

A subsidiary’s income and expenses and its assets and liabilities are consolidated in the consolidated financial statements as of the date when the Parent Company gains a controlling influence over the Company until the time that the controlling influence ceases. The consolidated financial statements have been prepared in accordance with the purchase method and with IFRS 3 (revised).

All Group companies have a calendar-based financial year and apply uniform accounting policies. Inter-company receivables and liabilities, inter-company transactions and related profits are eliminated in their entirety in the consolidated financial statements. Losses are eliminated in the same way as profits, provided there are no indications of impairment.

The delivery of services and products among companies in the Group are subject to commercial terms and market pricing.

Segment reportingSvenska Spel’s segment reporting is based on the same division of business areas that Group executive management uses to monitor operations. The Group executive management is also recognised as Svenska Spel’s supreme decision-making body. The segments are based on Svenska Spel’s offering of various forms of gaming and are divided into the following three operating segments: Gaming & Lotteries, Vegas and Casino Cosmopol, which also correspond to the Group’s business areas.

Minor redistributions of joint costs were completed during the year. The figures for last year have been adjusted to reflect the new distribution model.

Transactions in foreign currenciesForeign currency transactions are translated using the exchange rates prevailing on the transaction dates. At the end of the month, assets and liabilities in foreign currency are translated at the closing exchange rate. Foreign exchange gains and losses on current receivables and liabilities are included in operating profit, but foreign exchange gains and losses on financial assets and liabilities are recognized among financial items. Payment flows in foreign currencies are limited.

Over the course of the year, exchange-rate differences are continuously recognized via the income statement. Over the year-end period, the Group had a minor option contract to purchase currencies at a price that is within a moving interval with a maximum value. The value on the closing date is affected by the relationship between the highest value and the daily value. The difference is recognized via the income statement.

exchange rates

CurrencyClosing rate

31 December 2011Closing rate

31 December 2010

USD 6.9484 6.8275

EUR 8.9697 9.0270

GBP 10.7068 10.5775

CHF 7.3656 7.2455

cont. note 1


Revenue recognitionRevenue from gaming operations is recognised net, meaning gross revenue less deductions for winners’ shares and retailer commissions. In the income statement, the net amount is called “Net revenue from gaming operations, etc.”

This method of recognition is used because Svenska Spel’s operations are predominantly based on the allocation of received funds among gaming and lottery participants.

The timing of when the Group’s various forms of gaming, lotteries, casinos and VLT products generate revenue varies. Revenue from gaming and VLTs is generated virtually at the time the stakes are paid, while revenue from lottery tickets arises when a retailer activates tickets for sale, which in principle represents the time of sale. In certain cases, multi-week gaming occurs, whereby the revenue is allocated to the week to which it pertains. Casino revenue arises when gaming tables or slot machines are closed.

All gaming, lottery and casino revenue is recognised on a daily basis. VLT revenue is recognised weekly, which means that when a week straddles the end of a month, the week is attributed to the month to which the greater part belongs. Poker revenue comprises the percentage share of the stakes credited to Svenska Spel, known as the rake, which is also recognised on a daily basis.

Since the Oddset betting games (Lången, Matchen, Bomben, Mixen and Powerplay) fulfil the definition of derivatives, they must be revalued regularly and recognised at fair value. However, since the Company lacks system support for such revaluation, settlement is made when the bet closes and is thus realised. The duration of the bet is short, which is why unsettled bets at the end of the period are immaterial in scope.

Other revenue consists mainly of sales revenue from restaurants, leasing income from retail terminals and premises, revenues for the responsible gaming tool PlayscanTM, registration fees and casino entrance fees. These revenues are recognised in the period to which they pertain.

Note 2 includes the distribution of net gaming revenue, commission paid and other revenues, which jointly constitute the item net revenue from gaming operations, etc.

Intangible assetsCosts that lead to improved gaming products or processes are recognised as assets in the balance sheet if the product or process is technology based and can be used commercially, and there are sufficient resources to complete development and then use and sell the intangible asset. The carrying amount includes material costs, direct salary costs and indirect costs that can be attributed to the asset in a reasonable and consistent manner. Other development costs are expensed against profit/loss as incurred. Development costs recognised in the balance sheet are charged at cost less accumulated amortisation and impairment.

The Group’s intangible assets consist primarily of capitalised develop-ment costs for new gaming products and new gaming systems that are considered to be of material economic value for the business in coming years. Activities during feasibility study phases, as well as entertainment and education initiatives, are expensed on an ongoing basis, as is devel-opment work to enhance existing gaming and lottery products. Other intangible assets pertain to licences and goodwill.

Licenses are reported at their cost less deductions for depreciation/amortisation and impairment. Goodwill is reported at the purchase value with deductions for accumulated impairment.

principles underlying depreciation, amortization and impairmentAmortisation is applied on a straight-line basis over the expected useful life of the asset, starting from the date the asset is first put to use. The useful life and any residual value of assets are tested at each balance sheet date to establish whether there are any indications of impairment. If such indi-cation arises, the asset’s recoverable amount is calculated. The recoverable amounts for intangible assets with an indefinite useful life and intangible

assets not ready for use are tested annually. Impairment is recognised when the carrying amount of an asset exceeds the recoverable amount. Impairment losses are charged to profit or loss. Impairment is reversed if there has been a change in the assumptions underlying determination of the recoverable amount.

Depreciation periods number of years

New applications for gaming products 3 (3)

System platforms for new gaming products 5–10 (5–10)

Licences 5 (5)

Goodwill annual review

Annual testing of the recoverable amount of intangible assetsOn an annual basis, intangible assets are tested for impairment and the recoverable amount of individual assets is estimated. If the carrying amount of the asset exceeds the calculated recoverable value, the asset is impaired to this value. The recoverable amount represents value in use and is calculated by discounting future estimated cash flows pertaining to individual intangible assets. The recoverable amount of non cash- generating assets that are substantially independent of other assets is calculated for the cash-generating unit to which the asset belongs.

Property, plant and equipmentThe item property, plant and equipment is recognised as an asset in the balance sheet insofar as it is probable that future financial benefits will accrue to the Group and that the cost of the asset can be calculated reliably. Property, plant and equipment is recognised in the Group at cost with deductions for accumulated depreciation as well as any impairment loss. The cost includes the purchase price and any costs directly attributable to getting the asset to the appropriate place in the appropriate condition for its intended use.

Additional costs are added to the carrying amount of the asset or rec-ognised as a separate asset, whichever is most appropriate. If an additional cost pertains to payment for an already existing component, the recognised amount for the replaced components is derecognised from the balance sheet. Repairs and maintenance, plus any borrowing costs, are recognised as costs in in the income statement for the period to which they pertain.

Property, plant and equipment comprising parts with different useful lives are treated as separate components of property, plant and equipment.

The carrying amount for an item of property, plant and equipment is derecognised on disposal or sale, or when no future economic benefits are expected to arise from use of the asset. Profit or loss arising from the sale or disposal of an asset represents the difference between the selling price and the carrying amount of the asset, less direct selling costs.

Depreciation periods number of years

Buildings 50 (50)

Construction and extension, own property 5–50 (5–50)

Construction and extension, property held under lease 5–30 (5–30)

Land No depreciation

Land improvements 20 (20)

Retailer terminals 5 (5)

Equipment 3–5 (3–5)

Computers 3–5 (3–5)

Depreciation, amortisation and impairment policiesAmortisation is applied on a straight-line basis over the expected useful life of the asset, starting from the date the asset is first put to use. The carry-ing amounts and useful life of the Group’s assets are tested at each balance sheet date to establish whether there are any indications of impairment. If such indication arises, the asset’s recoverable amount is calculated.

cont. note 1


notes

Impairment is reported via the income statement hen an asset’s reported value exceeds the recoverable value. In the event of any change in the assumptions underlying the calculation of the recoverable value is reversed.

Corporate acquisitions The acquisition of subsidiaries is reported according to the purchase method. The purchase price for the acquired operation is value at fair value on the acquisition date. Acquisition-related expenses are reported in the income statement as they arise. In conjunction with corporate acquisitions in which the purchase price exceeds the fair value on the acquisition date for identified, acquired net assets, the difference is reported as goodwill in the financial status report.

Leased assetsLeasing is classified in the consolidated financial statements as operating or finance. Finance leasing occurs when the economic risks and rewards of ownership are materially transferred to the lessee. Leasing fees related to operating leasing agreements are recognised as income/expense in the income statement in the period to which they belong.

All leasing agreements entered into by the Svenska Spel Group have been analysed and deemed to be operating leases. Leasing agreements under which the Group is the lessee relate essentially to leased premises. Leasing agreements under which the Group is the lessor relate primarily to leasing of retailer and lottery terminals.

Financial instrumentsFinancial instruments are every form of contract that causes a financial asset or liability to arise. Financial instruments recognised on the asset side of the balance sheet include cash and cash equivalents, trade receivables, shares and loan receivables.

Liabilities and equity mainly comprise trade payables and winnings-related liabilities.

Recognition and classification of financial instrumentsFinancial instruments are initially carried at cost, representing the fair value of the instrument, with transaction costs added for all financial instruments except those defined as a financial instrument recognised at fair value in the income statement, with transaction costs recognised in the income statement.

A financial asset or financial liability is recognised in the balance sheet when the Company becomes party to the contractual conditions of the instrument. Financial assets are derecognised when the right to receive cash flow from the instrument has expired or been transferred and the Group has transferred essentially all the risks and benefits associated with ownership. A financial liability is derecognised when the contractual undertakings have been fulfilled or are otherwise extinguished.

Financial instruments are classified in categories. Classification is based on the purpose for which the financial instrument was acquired. Classifica-tion of the instrument is determined by executive management on initial recognition and retested on each reporting date. The categories are as follows:

1) Financial assets and financial liabilities measured at fair valuethrough the income statement.This category consists of two sub-groups:

a) Financial assets and liabilities held for tradingSvenska Spel enters into currency forward contracts in compliance with the Group’s finance policy to hedge the flow of foreign currencies. These derivative instruments also comprise contractual terms and conditions

that are embedded in other contracts. Embedded derivatives must be recognised separately unless they are closely related to the host contract. Svenska Spel mainly employs currency forward contracts to hedge pur-chases denominated in EUR and USD. Svenska Spel does not apply hedge accounting pursuant to IAS 39. Derivative instruments are recognised in the balance sheet on the contract date and are valued at fair value, both initially and in connection with subsequent revaluation. Gains or losses arising from revaluation are recognised in the income statement under financial income or financial expenses, respectively.

b) Financial assets and liabilities that on initial recognition are deemed to belong to this categorySvenska Spel has financial investments in bonds with a real rate of interest intended to provide funds for future payments of winnings in Triss Månads-klöver, these are shown in the balance sheet as “financial assets” and “current investments” respectively. Future payments to winners of Triss Månadsklöver are reported as a non-current and current liability, respectively, under unpaid winnings and belong to this category.

2) loan and trade receivablesTrade and other receivables are classified under this category since they have determined or determinable payments and are not quoted on an active market. Recognition is at amortised cost less any allowance for any value decline. As the expected maturity is short, these assets are valued at the nominal amount expected to occur. Individual testing occurs if there is objective evidence of an impairment requirement. Impairment of trade receivables is recognised under operating costs.

Cash and cash equivalents are classified as loan receivables and consist of cash, immediately accessible bank balances and equivalent institutions and current investments with a maturity from the acquisition date of less three months, which are exposed to an insignificant risk of value changes. Value changes are reported under financial items in the income statement.

3) Investments intended to be held to maturityThis category comprises financial assets with determined or determinable payments and determined maturity, which are held with the intention of being held to maturity.

In accordance with the Group’s current finance policy, surplus liquidity is invested in zero coupon bonds and commercial papers. Investments with an original maturity of less than three months, which are subject to insignificant risk of value fluctuation and can easily be converted to bank funds, are classified and measured as cash and cash equivalents. Other investments with maturity of between three and twelve months are clas-sified under this category in cases where they are intended to be held to maturity.

4) available-for-sale financial assetsAvailable-for-sale financial assets are non-derivative assets. Assets in this category are measured at fair value with changes in value charged to equity. The Group has no financial assets in this category.

5) Other financial liabilities measured at accrued costTrade and other payables have short expected due dates and are measured without discounting at the nominal amount. All Group funds are measured at accrued cost. Funds are accumulated for the jackpots of various types of games. Funded winnings may vary greatly over time depending on when winnings are actually paid.

Svenska Spel’s settlement fund includes lottery and game winnings that are not claimed within the set period and also payment rounding amounts. The redemption period for winnings for the Vegas gaming form is 30 days, for other games 90 days and for lotteries up to 1.5 years. When the redemp-

cont. note 1


tion date has passed, unclaimed winnings are placed in the settlement fund in accordance with the Company’s licence. Paid winnings are rounded down to the nearest SEK and the excess amount transferred to the settle-ment fund. The funds in the settlement fund are used to cover the future payments of winnings for approved claims, and can be used to return funds to winning participants by, for example, increasing the frequency of winnings or topping up certain winning categories during campaigns.

TaxesThe Parent Company, AB Svenska Spel, and its subsidiary, Casino Cosmopol AB, are exempt from liability to pay taxes on income from business opera-tions and are also in principle not required to pay value added taxes. These companies are also exempt from lottery tax. However, all companies in the sub-group Svenska Spels Förvaltnings AB have a tax liability and are also in principle required to pay value added tax.

Income tax consists of current tax and deferred tax. Income taxes are charged directly to the income statement except where the underlying transaction is charged directly to equity, in which case the associated tax effect is recognized in other comprehensive income or equity. Current tax is tax that is to be paid or received pertaining to the current year with appli-cation of the tax rates in effect on the closing date.

Deferred tax is determined using the balance sheet method based on the temporary differences between the carrying amount and the value of assets and liabilities for tax purposes. Deferred income tax is calculated based on application of the tax rates in effect on the balance sheet date. Deferred tax assets relating to tax deductible temporary differences and tax loss carry-forwards are recognised only insofar as it is probable that they will be utilised.

ProvisionsA provision is reported in the balance sheet term the group has an existing legal or informal obligation as a result of the occurrence of an event and it is likely that an outflow of financial resources will be required to settle the obligation and a reliable estimate of the amount can be made. When the effect of the payment timing is significant, provisions are calculated through the discounting of the anticipated future cash flow at a certain interest rate that reflects current market assessments of the time value of money. Most of these provisions are pension provisions.

Employee benefitsEmployees in the Svenska Spel Group receive remuneration in the form of basic salary, benefits and occupational pension. Variable remuneration is paid to employees for work performed during, for example, unsociable working hours. No bonus-based remuneration or remuneration in the form of financial instruments is payable.

In addition to salary, employees receive benefits, which depend to some extent on the position in the Company held by the employee. All employees are entitled to a subsidised lunch and to certain compensation for fitness care and healthcare. Executive management and sales representatives are also entitled to a benefit in the form of access to a company car and subsidised fuel.

pension plansSalaried employees in the Svenska Spel Group are covered by the ITP plan administered by Collectum. Pension obligations after terminated employ-ment are classified as either defined-contribution or defined-benefit plans. According to a statement from the Swedish Financial Reporting Board UFR 3, pension plans secured in accordance with the ITP plan are to be classified as defined-benefit plans. However, Collectum, which insures the ITP plan, has not been able to provide Svenska Spel or other companies with sufficient information to be able to determine the Company’s share of the plan’s total

assets and liabilities. Since these obligations can only be attributed to the insurance beneficiary, they are recognised under UFR 3 as a defined-contri-bution plan.

The Svenska Spel Group’s employees who are collectively covered by agreements in the LO agreement area are affiliated to the defined-contri-bution pension plan named the SAF-LO Pension Agreement, which is administrated by Fora.

Within the Parent Company Svenska Spel, there are a few older pension obligations to former employees. These obligations amount to insignificant sums and are secured in part through allocations to the Company’s pension liability and in part through Svenska Spel’s Pension Foundation. AB Svenska Spel pays ongoing pension payments pursuant to these obligations, whereupon annual crediting from Svenska Spel’s Pension Foundation occurs.

Termination benefitsA provision is recognised in conjunction with termination of employment only if the Company is demonstrably committed to either terminating the employment of an employee before the retirement date or when termina-tion benefits are provided to encourage voluntary redundancy. The provision is recognised when no service is required in return from the employee.

Government grantsSvenska Spel does not receive any Government or other financial grants.

Statement of cash flowsThe statement of cash flows is prepared pursuant to the indirect method. Cash and cash equivalents in the statement of cash flows consist of cash and bank balances and investments with a maturity of less than three months, which are not subject to any material risk of value fluctuation.

Parent Company’s accounting policiesThe Parent Company has prepared its annual financial statements in con-formity with the Annual Accounts Act (1995:1554) and the Recommenda-tions of the standards of the Swedish Financial Reporting Board in RFR 2 Accounting for legal entities. This implies that in the annual financial state-ments of the legal entity, the Parent Company is to apply all EU-approved IFRSs and statements from IFRIC to the extent possible within the framework of the Annual Accounts Act and the Pension Obligations Vesting Act, and in consideration of the relationship between accounting and taxation. The recommendations state the exceptions to be made from, and supplements to, IFRS. The Parent Company applies the same accounting policies as the Group except as specified below.

DividendsDividends to the shareholders of the Parent Company are recognised as a liability in the financial reports of the Parent Company and the Group when the shareholders of the Parent Company adopt the distribution. The Parent Company anticipates dividends from subsidiaries. The Articles of Association state that all funds available for distribution as dividends shall be disposed of in the manner prescribed by the Government.

participations in subsidiariesParticipations in subsidiaries are reported at cost in the Parent Company’s financial reporting. Acquisition-related costs for subsidiaries, which are charged in the consolidated accounting, are included as part of the cost of participations in subsidiaries.

cont. note 1


notes

Operating segment

Sek million

Gaming & lotteries vegas

Casino Cosmopol

Other operations

elimination of internal items

Group Svenska Spel

2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010

Income statement

Net gaming revenue 6,401 6,395 2,083 2,039 1,203 1,190 — — — — 9,687 9,624

Commissions –1,111 –1,106 –861 –842 — — — — — — –1,973 –1,949

Other revenue 110 111 — 1 88 86 59 59 –52 –47 205 209

net sales from gaming operations, etc. 5,399 5,400 1,222 1,198 1,291 1,277 59 59 –52 –47 7,919 7,885

Costs (incl. capitalised work) –1,792 –1,853 –329 –363 –797 –807 –9 –20 –52 –47 –2,979 –3,090

Operating profit 3,607 3,547 893 835 494 469 50 39 –105 –95 4,940 4,795

Financial income — — — — — — 204 86 — — 204 86

Financial expense — — — — — — –138 –113 — — –138 –113

profit after financial items 3,607 3,547 893 835 494 469 117 12 –105 –95 5,007 4,768

Balance sheet

Investments 30 29 23 100 36 15 108 40 — — 198 184

Other assets 783 756 224 221 830 849 7,601 7,152 –1,527 –1,676 7,909 7,302

Total assets 812 785 247 321 866 863 7,709 7,192 –1,527 –1,676 8,107 7,486

Amortisation, depreciation and impairment 82 98 100 116 57 80 47 52 — — 286 346

Liabilities 2,582 2,233 — — 859 862 1,186 1,301 –1,527 –1,676 3,100 2,719

Total liabilities 2,582 2,233 — — 859 862 1,186 1,301 –1,527 –1,676 3,100 2,719

Note 3 Reporting per segment

The Group’s classification of segments, which correspond to the new organisation’s division of business areas, is based on the executive man-agement’s monitoring of operations based on Svenska Spel’s range of gaming form offerings.

The delivery of services and products among Group companies is subject to commercial terms and conditions and market pricing. Accounting reflects the distribution of revenues and costs, as well as assets and liabilities, for each operating segment.

The Parent Company, AB Svenska Spel, operates the business segments of Gaming & Lotteries, and Vegas. Two legal companies operate the business segment Casino Cosmopol.

Gaming & Lotteries operations comprise the gaming categories of number games, lotteries, sports games and Poker. The Vegas business area’s revenue derives from VLT gaming pursued under the name Vegas.

Revenue in Casino Cosmopol consists of revenue from table games such as roulette, dice and card games as well as slot machines.

Other operations include non-distributed income statement and balance sheet items in the Parent Company , Svenska Spel, as well as operations that are pursued in the Group’s small subsidiaries. Playscan AB, conducts the sale of the PlayscanTM responsible gaming tool, while Casino Cosmopols Fastighets AB owns the casino buildings in Stockholm, which are leased to another Group company. Other companies have highly limited operations or none at all.

Directly comparable income statement and balance sheet items are reported under each operating segment, other items have been distributed.

All revenue below and the reported results are attributable in their entirety to operations in Sweden.

Consolidation is pursuant to the same principles as those for the Group.

Note 2 Revenue per key category

Group parent Company

Sek million 2011 2010 2011 2010

Sale of services

Net revenue from gaming 9,687 9,624 8,484 8,434

Commissions –1,973 –1,949 –1,973 –1,949

Sale of goods

Revenue from restaurant operations 101 100 — —

Cost of sales –40 –41 –2 —

Leasing income

Leasing of retailer terminals 48 49 48 49

Other 96 101 79 79

Total net revenue from gaming operations, etc. 7,919 7,885 6,636 6,614


Note 4 acquisition of operations

On 12 March 2010, Svenska Spel acquired all the shares of the newly formed company Playscan AB. The company is a subsidiary of Svenska Spels Förvaltnings AB and is run as an operationally active company with both internal and external customers. At the time of acquisition, the company’s total assets amounted to SEK 1.1 million and mostly pertained to develop-ment costs for PlayscanTM. The purchase price was SEK 21.2 million, of which SEK 100,000 pertained to share capital. Following the implementa-tion of an acquisitions analysis, the remainder of the purchase sum was classified as follows:

GoodwillSEK 19.1 million pertained primarily to potential future sales and thus con-stituted goodwill. Since the period of use is indeterminable, assessments of the recoverable amount will be performed annually.

Employee expensesThe remaining portion of the purchase price of SEK 2 million pertained to sales-based employee expenses and will be paid out following the close of the 2012 financial year. Following a new assessment in 2011, the addi-tional purchase consideration was impaired by SEK 0.6 million and employee expenses now amount to SEK 1.4 million. Shares and participations in Svenska Spels Förvaltnings AB were impaired by an equivalent amount.

Note 5 employees, employee expenses and benefits

2011 2010

average number of employeesnumber of employees

of whom men, %

number of employees

of whom men, %

Parent Company 755 63 744 62

Other Group companies 1,019 52 1,021 51

Total 1,774 57 1,764 56

2011 2010

Board of Directors, CeO and Group management number of whom men number of whom men

Board of Directors 11 5 11 6

CEO 1 1 1 1

Group management, excluding CEO 9 5 9 6

2011 2010

pay, remuneration, and social security expenses, Sek 000sBoard, CeO and

Group managementOther

employeesBoard, CeO and

Group managementOther

employees

parent Company

Pay and remuneration 16,468 331,736 24,270 322,498

Social security expenses 6,844 115,772 9,135 110,753

Pension costs 6,881 46,592 6,223 41,303

Total 30,193 494,100 39,628 474,554

Other Group companies*


Social security expenses 959 92,704 649 88,992

Pension costs 676 17,202 489 15,441

Total 4,164 434,680 2,825 423,543

* No special remuneration is paid for Board assignments in subsidiaries

Group


Social security expenses 7,803 208,476 9,784 199,745

Pension costs 7,557 63,794 6,712 56,744

Total 34,357 928,780 42,453 898,097


notes

Board fees audit CommitteeRemuneration

Committee Total

Fees and other remuneration paid to the Board, Sek 000s 2011 2010 2011 2010 2011 2010 2011 2010

Anitra Steen, Board Chairman, from 19/4, 2011 167 — — — 10 — 177 —

Margareta Winberg, Board Chairman, to 18/4 83 250 — — 5 15 88 265

Hans Bergenheim, Board member from 20/4 93 62 10 7 — — 103 69

Stefan Borg, Board member from 18/4 31 93 — — — — 31 93

Lena Borgström-Melinder, Board member to 18/4, 2011 31 93 7 20 — — 38 113

Björn Fries, Board member 93 93 — 3 3 5 96 101

Catarina Fritz, Board member from 19/4, 2011 62 — 13 — — — 75 —

Eva-Britt Gustafsson, Board member 93 93 10 10 — — 103 103

Lena Jönsson, Board member 93 93 — — 3 8 96 101

Lars Otterbeck, Board member to 20/4, 2010 — 31 — — — 3 — 34

Michael Thorén, Board member from 19/4, 2011 — — — — — — — —

Christer Åberg, Board member 19/4, 2011 62 — — — 5 — 67 —

Anders Andersson, Board member, employee rep. — 7 — — — — — 7

Jenny Bengtsson, Board member, employee rep. from 19/4, 2011 — — — — — — — —

Peter Cernvall, Deputy Board member, employee rep. — 8 — — — — — 8

Loi Diep, Deputy Board member, employee rep. from 19/4, 2011 — — — — — — — —

Patrik Lindell, Deputy Board member, employee rep. from 20/4, 2011 — — — — — — — —

Roland Norbäck, Deputy Board member, employee rep. to 20/4, 2011 — 4 — — — — — 4

Martina Ravn, Board member, employee rep. — 8 — — — — — 8

Total 808 835 40 40 26 31 874 906

cont. note 5

Board feesThe Chairman and Directors of the Board receive fees in accordance with the resolution by the AGM. The same applies to the Chairman and Directors in the Audit Committee and the Remuneration Committee.

Board members who are employed by the Government Offices of Swe-den and employee representatives are not paid Board or committee fees.

The remuneration presented above pertains to the Parent Company AB Svenska Spel. No fees were paid to the Directors of subsidiaries and sub-subsidiaries, since all Directors are employed in companies in the Svenska Spel Group.

The changes to the composition of Directors and employees on the Board are presented in the above table/compilation.


cont. note 5

SalaryOther

benefitsOther

remunerationTotal salary and

remunerationpensions

costs

Salary and other remuneration to senior executives, Sek 000s 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010

Lennart Käll, CEO and President, from. 12/9 2011 1,089 — 2 — — — 1,091 — 343 —

Anders Hägg, interim CEO and President, from 23/6 2010–11/9 2011 2,436 1,251 65 32 — — 2,501 1,283 3,264 1,518

Meta Persdotter, CEO and President, 1/2 2009–22/6 2010 — 2,643 — 71 — 3,600 — 6,314 — 859

Total 3,525 3,894 67 103 — 3,600 3,592 7,597 3,607 2,377

Other senior executives in Group management

Marie Avander, Manager, Vegas business area 1,319 1,267 73 76 — — 1,392 1,343 446 376

Anna Björklund, HR Manager 1,355 1,329 62 62 — — 1,417 1,391 422 448

Annika Ferm, Communication Manager from 1/2 2011 1,062 — 39 — — — 1,101 — 274 —

Anders Granvald, Manager Development operating area 1,364 1,307 4 4 — — 1,368 1,311 376 413

Anders Hägg, CFO through 22/6 2010 — 677 — 32 — — — 709 — 347

Per Jaldung, Manager, Casino Cosmopol business area 1,338 1,214 74 66 — — 1,412 1,280 359 342

Marie Loob, CFO from 1/9 2010 1,280 424 5 2 — — 1,285 426 347 84

Mattias Mildemborn, Interim Manager, Gaming & Lotteries business area from 11/5 2011 864 — 50 — — — 914 — 187 —

Jörgen Olofsson, Manager, Production operating area 1,207 1,125 8 8 — — 1,215 1,133 310 280

Bengt Palmgren, Senior Legal Counsel 1,532 1,486 63 63 — — 1,595 1,549 621 669

Håkan Sjöstrand, Manager, Gaming & Lotteries business area to 9/5 2011 1,554 1,380 87 86 — — 1,641 1,466 270 305

Johan Tisell, Interim Information Manager from 15/3 2010–31/1 2011 74 707 1 5 — — 75 712 21 144

Thomas Agrell, Marketing Manager from 1/9 2009 to 10/6 2010 — 1,337 — 26 — 600 — 1,963 — 368

Mikael Franzén, Manager, Internet business area to 26/10 2009 — 1,060 — 7 — 1,980 — 3,047 — 261

Andreas Jansson, Information Manager through 30/10 2009 — 717 — — — — — 717 — 151

Total 12,949 14,031 466 436 — 2,580 13,415 17,047 3,633 4,189

Other senior executives

Peter Jannerö, Interim Market Manager, from 14/6 2010 to 31/8 2010 — 275 — 1 — 0 — 276 — 60

Ann-Sofie Olsson, Interim Information Manager to 10/3 2010 — 325 — 1 — 0 — 326 83

Ann-Sofie Olsson, CEO, Playscan AB from 15/3 2010 1 109 407 8 1 — 960 1,117 408 317 147

Total 1,109 1,008 8 3 — 960 1,117 1,011 317 289

Remuneration of senior executivesSenior executivesThose who at anytime are part of the team of “senior executives” are determined by the Remuneration Committee under the application of the provisions stipulated in Chapter 8, Section 51 of the Swedish Compa-nies Act (2005:551). Senior executives at the Svenska Spel Group are the President of the Parent Company and all members of Group manage-ment, any managers who are not members of Group management yet directly subordinate to the President of the Parent Company, the presi-dents of the subsidiaries and the members of the subsidiaries’ manage-ment teams.

Remuneration of senior executives – guidelines,nomination process, decisions and monitoring The guidelines that apply to the remuneration of senior executives were adopted at the AGM on 19 April 2011 and apply to the entire Group. These guidelines are based on the guidelines issued by the Government on 20 April 2009 regarding employment terms for senior executives in State-owned companies. The policies specify that total benefits to senior execu-tives are to be reasonable and well balanced. Remuneration should be competitive, have a ceiling, be appropriate and contribute to sound ethi-cal and corporate culture. Remunerations should not be leading in rela-tion to comparable companies but embody moderation. The decision on employment terms for the CEO is prepared by the Remuneration Com-mittee and decided by the Board. Employment terms for other executives

are decided on by the CEO after the customary consultation with the Company’s Remuneration Committee. The outcome of agreements reached is reported to the Board. Before decisions are made regarding individual remuneration, written documentation is to be presented show-ing the Company’s overall costs. The Board ensures that remuneration follows the guidelines by comparing remuneration for equivalent roles in other comparable State-owned and private companies operate only in Sweden in terms of parameters such as size, complexity, and revenue.

Remuneration of the CEO and the Company’s senior executives con-sists of fixed basic salaries, benefits and pensions. Svenska Spel does not compensate senior executives with variable or bonus-based remunera-tion or any remuneration in the form of financial instruments.

Decisions concerning employment terms and conditions for senior executives of subsidiaries are made by the presidents of the subsidiaries following consultations with the subsidiaries’ Boards. Remuneration to senior executives of the subsidiaries is recognized in the annual reports for the subsidiaries.

Changes in the executive management team and other senior executivesEffective 12 September 2011, Lennar Käll was appointed CEO and Presi-dent of AB Svenska Spel. In conjunction with Lennart Käll assuming his position, Ander Hägg stepped down from his position as Interim President and CEO of AB Svenska Spel and made his services available to the Company through 31 December 2011 when he resigned from AB Svenska Spel.


notes

forts. not 5

salary supplement of SEK 80,000 per month, as well as extra pension pre-miums for the salary supplement of SEK 24,000 per month.

Remunerations and terms for other senior executives in Group executive management For other senior executives within executive management, pensions are paid in accordance with the ITP plan, with the age of retirement at 65. On notice of termination, a mutual notice of six months applies. In the event that notice is given from the Company’s side, severance pay is paid out for a maximum of 18 months, corresponding to the monthly salary with no supplement for benefits. When new employment has been secured or on receipt of income from business activities, severance pay from the com-pany that initiated the termination will be reduced in the amount of the new income during the period in which severance pay is paid.

Remunerations and terms for other senior executivesFor other senior executives, remuneration is paid in the form of basic sala-ries, benefits and pension under collective agreement in accordance with the ITP plan, with retirement at the age of 65.

Remuneration of other employees Employees of the AB Svenska Spel Group receive remuneration in the form of basic salaries, benefits and pension under collective agreement. Variable remuneration is provided to employees for work during incon-venient working hours. Bonus-based remuneration or remuneration in the form of financial instruments is not paid.

Annika Ferm assumed her position as Communication Manager on 1 February 2011. In conjunction with Annika Ferm assuming her position as Communication Manager, Johan Tisell’s assignment as Interim Commu-nication Manager concluded on 31 January 2011.

On 29 April 2011, Håkan Sjöstrand, Manager of the Gaming & Lotteries business area, announced that he would be stepping down from his posi-tion at the company as of 30 September 2011. Mattias Mildenborn assumed the position of Interim Manager of the Gaming & Lotteries busi-ness area on 10 May 2011.

Remunerations and terms for senior executives within executive managementCeOLennart Käll, the President and CEO of AB Svenska Spel, received salary and benefits of SEK 1,091,000 in 2011. Lennart Käll’s pension premiums amounted to SEK 343,000 in 2011. Lennart Käll is not part of the ITP plan and is entitled to pension premiums corresponding to 30% of his pensionable monthly salary in accordance with his agreement.

During 2010, Anders Hägg, in his role as interim CEO as well as interim President for AB Svenska Spel, received salary and remuneration totalling SEK 2,501,000 in 2011. Costs for standard pension contributions in accord-ance with the ITP plan totalled SEK 943,000 for Anders Hägg during 2011. Anders Hägg is entitled to ITP pension as of the age of 65. Anders Hägg is entitled to extra retirement pension from 1 January 2010 until the age of 65. During 2011, the Company recognised an accrued cost of SEK 2,321,000 for this commitment. In addition to a fixed monthly salary from his position as CFO, in his capacity as Interim CEO, Anders Hägg received a

Note 6 auditors’ fees


auditors’ fees, Sek 000 2011 2010 2011 2010

auditing assignments

Deloitte AB 1,489 — 1,085 —

PwC AB — 1,690 — 1,007

Swedish National Audit Office — 281 — 281

auditing activities other than auditing assignments

Deloitte AB 682 364 682 364

PwC AB 217 205 217 205

Tax consultation

Deloitte AB 103 — 103 —

PwC AB — 388 — —

Other services

Deloitte AB 53 — 53 —

PwC AB 872 1,478 872 1,432

Total 3,417 4,405 3,012 3,289

Audit assignments pertain to auditing of the annual report and accounts as well as the administration of the Board and CEO.


Note 7 Financial income and expenses


Financial income, Sek million 2011 2010 2011 2010

Interest income from bank balances 36 11 40 15

Exchange-rate gains on futures contracts 8 39 7 39

Change in value of assets, Triss Månadsklöver 138 35 138 35

Other financial income 21 2 21 2

Total 204 86 206 90


Financial expenses, Sek million 2011 2010 2011 2010

Interest expenses –0 –0 –0 –0

Exchange-rate losses on futures contracts –2 –43 –0 –43

Change in value of liabilities, Triss Månadsklöver –136 –69 –136 –69

Total –138 –113 –136 –113


net gains/losses, Sek million 2011 2010 2011 2010

Result from futures contracts 7 –5 6 –5

Triss Månadsklöver, financial assets and liabilities valued at fair value via the income statement 3 –35 3 –35

Investments held to maturity 21 2 21 2

Loan and trade receivables 0 1 0 1

Other financial liabilities 0 0 0 0

Total 31 –37 30 –37

The Parent Company’s interest income includes intra-Group income in the amount of SEK 12.9 million (6.5).

Note 8 taxes


Reported in the income statement, Sek million 2011 2010 2011 2010

Current tax expense (–)/tax income

Tax expense for the period — — — —

Adjustment of tax attributable to previous years — –1 — —

Deferred tax (–)/tax income — —

Deferred tax pertaining to temporary differences 0 –1 — —

Total reported tax charge 0 –2 — —

The Svenska Spel Group has tax loss carry-forwards in the amount of SEK 176 million (167). Deferred tax assets have not been reported in cases where it is unlikely the Group will utilise them to offset future taxable winnings.


notes

Capitalised development projectsIntangible assets primarily comprise capitalised development expen-ditures, where the following represent the major items:

GeMGEM is a gaming platform for the Gaming & Lotteries business area. Thecarrying amount of GEM is SEK 109.4 million (136.1). The estimated depre-ciation period is ten years and the investment will be completely depreci-ated in 2016. The ten-year depreciation period is applied since IT platforms of the type represented by GEM are typically utilised over a period of at least ten years.

vegas central systemDuring 2010, a new central system for Svenska Spel’s Vegas VLTs began to be commissioned. The carrying value for the central system amounts to SEK 12.9 million (14.1). The depreciation period is estimated at five years.

Online productsIn 2009, Svenska Spel developed a new service that enables subscription to the Lotto product. The service has been available as of 1 January 2010 and the carrying amount at year-end was SEK 2.6 million (5.1). The depre-ciation period for the asset is deemed to be three years.

svenskaspel.seSvenska Spel launched a new website on 15 September 2008. The chan-ges involve a new appearance, improved overview, more interactivity and compulsory weekly budget. The carrying amount of the asset is SEK 0.0 million (5.7). The depreciation period for the asset is deemed to be three years.

DatawarehouseA new datawarehouse was created and commissioned during 2010. Its carrying amount was SEK 21.7 million (36.2) and it is estimated to have a depreciation period of three years.

Mobile webCapitalised projects pertain to the development of games and services and for smart phones. The carrying amount totals SEK 14.0 million (0.0) and have an estimated depreciation period of three years.

Gift codes2011 saw the launch of digital gift codes for Triss for Svenska Spel’s corpo-rate customers. The carrying value totals SEK 14.5 million (4.1) and the depreciation period is deemed to be three years.

Costs for capitalised development projectsThe total amount of development project costs that have been expensed during the year is SEK 40 million (70) and relates to Parent Company and Group projects. Capitalised development projects consist primarily of cost for feasibility studies and projects that do not meet the criteria for an intangible asset.

OtherOther intangible assets comprise corporate acquisitions of the seven bingo halls that Svenska Spel acquired in 2007. The acquisition was fully amortised during 2009 and divested in 2010.

Note 9 intangible assets

Group, Sek million

Capitalised development-

costs OtherOngoing projects

Total, parent Company Goodwill licenses Other

Total Group

accumulated cost

Opening balance, 1 January 2010 447 19 60 526 — 18 — 544

Acquisitions 5 — 4 9 19 — 1 29

Conversions 46 — –46 0 — 1 — 1

Disposals –51 –19 — –70 — — — –70

Closing balance, 31 December 2010 447 — 18 465 19 19 1 504

Opening balance 1 January 2011 447 — 18 465 19 19 1 504

Acquisitions 25 — 10 35 — — — 35

Conversions 18 — –18 0 — — — 0

Disposals –3 — — –3 — — — –3

Closing balance 31 December 2011 488 — 10 498 19 19 1 537

accumulated depreciation, amortisation and impairment

Opening balance, 1 January 2010 –271 –19 — –289 — –8 — –297

Depreciation for the year –45 — — –45 — –4 –0 –49

Impairment for the year — — — — — — — —

Disposals 51 19 — 70 — — — 70

Closing balance 31 December 2010 –264 — — –264 — –12 –0 –276

Opening balance, 1 January 2011 –264 — — –264 — –12 –0 –276

Depreciation for the year –51 — — –51 — –3 –0 –54

Impairment for the year — — — — — — — —

Disposals 3 — — 3 — — — 3

Closing balance 31 December 2011 –313 — — –313 — –15 –1 –328

Carrying amount 31 December 2010 183 — 18 201 19 7 1 228

Carrying amount 31 December 2011 175 — 10 185 19 4 0 209


Ongoing projectsSEK 9.8 million pertains to development projects designed to create a platform for managing sports and gaming information.

For the preceding year, ongoing projects referred to a new central system for Vegas, in the amount of SEK 14.1 million, while SEK 4.1 million pertained to the development project for the launch of gift codes. Both of these projects were capitalised during 2011.

GoodwillOn 12 March 2010, the Svenska Spel Group acquired shares of the com-pany Playscan AB, whose operations comprise the development, main-tenance and sale of the responsible gaming tool, PlayscanTM. The total purchase consideration of the acquisition was SEK 21.2 million. Based on an acquisition analysis, SEK 19.1 million was classified as goodwill.

In the case of intangible assets whose useful life is indeterminable, assessments of the recoverable amount are performed annually. Impair-ment is reported when an asset’s carrying value exceeds the recoverable value. The impairment is charged to the income statement. The impair-ment is reversed when there are changes in the assumptions underlying the estimate of the recoverable value.

LicensesLicences reported in the balance sheet pertain to system licences for Casino Cosmopol. The carrying amount is SEK 4.2 million (7.0) and the amortisation period is five years.

AssessmentsThe significant assessments underlying the estimated cash flows are primarily estimated sales for each IT platform and a calculated margin based on experience.

The sales assessment has been completed by means of internal analy-ses of the available market and the attained market penetration for the games and lotteries from the particular systems platforms.

Testing shows that no impairment requirement exists : the recoverable value exceeds by an ample margin the reported value for all tested cash-generating units. Sensitivity analyses completed show that considerable changes in the cost of capital, for example, also take into account the risk-free rate of interest and market risks.

The cost of capital calculated by the company takes the risk free inte-rest rate and market risks into account. In addition to these, there are a number of operationally specific risks; risks of variations in future cash flows, liquidity risk and company size. For 2011, the cost of capital was 8.8 per cent (8.8), based on the aforementioned factors.

cont. note 9

Note 10 Property, plant and equipment

Group, Sek millionBuildings and land

Construction and extensions,

own property

Construction and extensions, property

held under leaseConstruction in

progressequipment

and computers Total

accumulated cost

Opening balance, 1 January 2010 244 227 264 8 1,730 2,474

Acquisitions — 4 2 — 169 174

Reversals — — 8 –8 –1 –1

Disposals — — –1 — –192 –193

Closing balance, 31 December 2010 244 231 273 0 1,706 2,455

Opening balance, 1 January 2011 244 231 273 0 1,706 2,455

Acquisitions 1 0 1 — 160 162

Reversals — — –1 0 0 –1

Disposals — –1 0 — –83 –84



Opening balance, depreciation, 1 January 2010 –26 –46 –73 — –1,128 –1,272

Depreciation for the year –2 –9 –12 — –274 –298

Disposals — — 0 — 185 186

Closing balance, 31 December 2010 –28 –55 –85 — –1,217 –1,384

Opening balance, impairment, 1 January 2010 — — –68 — –7 –75

Impairment for the year — — — — — —

Disposals — — 0 — 0 0

Closing balance, 31 December 2010 — — –68 — –6 –74

Opening balance depreciation, 1 January 2010 –28 –55 –85 — –1,217 –1,384


Disposals — 1 0 — 79 80

Closing balance, 31 December 2011 –31 –63 –97 — –1,345 –1,536

Opening balance, impairment, 1 January 2011 — — –68 — –6 –74


Disposals — — 1 — — 1

Closing balance, 31 December 2011 — — –67 — –6 –73

Carrying value, 31 December 2010 216 176 120 0 484 996



notes

Group, Sek millionBuildings and land

Construction and extensions,

own property

Construction and extensions, property

held under leaseConstruction in

progressequipment

and computers Total

accumulated cost

Opening balance, 1 January 2010 36 45 6 — 1,314 1,402

Acquisitions — 0 0 — 155 156

Reversals — — — — — —

Disposals — — — — –178 –178

Closing balance, 31 December 2010 36 46 6 — 1,292 1,380

Opening balance, 1 January 2011 36 46 6 — 1,292 1,380

Acquisitions 1 0 — 0 124 125

Reversals — — — — — —

Disposals — — — — –71 –71



Opening balance, depreciation, 1 January 2010 –13 –20 –2 — –850 –885


Disposals — — — — 172 172

Closing balance, 31 December 2010 –14 –24 –3 — –886 –927

Opening balance, impairment, 1 January 2010 — — — — — —


Disposals — — — — — —

Closing balance, 31 December 2010 — — — — — —

Opening balance, impairment, 1 January 2011 –14 –24 –3 — –886 –927


Disposals — — — — 67 67

Closing balance, 31 December 2011 –14 –28 –5 — –982 –1,029

Opening balance, impairment, 1 January 2011 — — — — — —


Disposals — — — — — —

Closing balance, 31 December 2011 — — — — — —

Carrying value, 31 December 2010 22 21 3 — 406 453


cont. note 10

Note 11 Financial risk management

Financial risk managementThe Group is exposed to various financial risks through its operations: cur-rency risk, interest risk, credit risk and liquidity risk. Ongoing risk manage-ment is managed by a central finance department pursuant to adopted policies and guidelines. The finance department evaluates and hedges financial and other risks in collaboration with other Group operating units. The Board has prepared policies for overall risk management and financial management.

Currency riskThe Group is active only in Sweden but is exposed to currency risks that arise from currency exposures pertaining to the purchasing of specialised equipment and printing of lottery tickets, as well as the sale of licenses for the

responsible gaming tool PlayscanTM. The exposure is to EUR, USD, as well as CHF and GBP. Currency risk arises only through future business transactions when the Group does not have any assets or liabilities in currencies other than SEK nor any net investments in foreign operations.

The Group’s finance policy requires that it handle currency risk against the functional currency by using currency futures. This means that 100 per cent of the contracted currency flows is to be hedged when the contract is sig-ned. Moreover, contractual flows are hedged when the exact magnitude of the future payment flow is not set in conjunction with the hedging occasion, but can be forecast with considerable certainty. Planned investments that involve significant insecurity, such as with regard to the currency and size of the flow, are not to be hedged before the contract is signed.


cont. note 11

The Group’s transaction exposure expressed in the equivalent amounts inSEK million is allocated among the following currencies:

Currency 2011 2010

EUR 109.0 132.3

USD 12.6 8.8

CHF 1.1 1.0

GBP 6.3 1.5

Total 129.0 143.6

As more or less all consolidated revenue and expenses consist of payments in SEK and the currency risk pertaining to future business transactions is covered by futures, the remaining currency risk is negligible. Changes in the value of the Group’s functional currency in relation to other currencies have thus not had any short-term impact on the Group’s earnings.

The Group gauges and follows up currency risks through the control and reporting of net exposure in each currency.

A sensitivity analysis of a momentary change in exchange rates by ± 10% vis-á-vis SEK would entail a momentary negative impact on profit of SEK 14 million.

Currencynet position 31 Dec. 2011

value change –10 %

value change +10 %

EUR 109.0 98.1 119.9

USD 12.6 11.3 13.9

CHF 1.1 1.0 1.2

GBP 6.3 5.7 6.9

Total 129.0 116.1 141.9

Interest-rate riskThe Group’s interest risks pertain to interest rate fluctuations related investments in index-linked treasury bonds and surplus liquidity invest-ments. Index-linked treasury bonds are used to hedge the Group’s com-mitments to winners in the Triss Månadsklöver lottery. Svenska Spel pays a nonrecurring amount to an independent administrator for every win. This payment is based on a present value calculation of future winnings payments at the current rate of interest on the Swedish index-linked trea-sury bond market. The payment is adjusted to cover future payments to the winner. The liability to winners is upwardly adjusted annually accor-ding to the Consumer Price Index, CPI, trend. To manage interest rate risk relating to index-linked treasury bonds, it is the responsibility of the mana-ger to ensure that the interest rate sensitivity of an investment in the asset, index-linked treasury bonds, is the same as the liability to the winner, and that the portfolio’s interest rate sensitivity to index-linked treasury bonds corresponds to that of the liability as far as possible. The Group’s overall interest risk associated with assets and liabilities in index-linked treasury bonds is deemed to be negligible.

A small portion of the Group’s cash and cash equivalents is invested in financial instruments that largely comprise zero-coupon bonds and prime commercial paper, which are held to maturity.

Credit riskCredit risk refers to the risk that business partners cannot meet their finan-cial obligations.

As gaming may not be pursued using credit, which means consolidated revenue consists exclusively of cash transactions, credit risk in Group ope-rations is limited. Exposure to credit risk arises in funds generated on an ongoing basis at retailers, associations and restaurants who sell the Group’s range of games and lotteries on an assignment basis. credit risk also arises

in the investment of the Group’s surplus liquidity in bank accounts or in the purchase of interest-bearing securities. Exposure to the Swedish State arises in conjunction wit the value hedging of future winnings for the Triss Månadsklöver lottery as a result of the holding of Swedish index-linked treasury bonds and in connection with advance payment of forecast annual dividends to the Swedish National Debt Office.

There are detailed procedures for the approval of gaming retailers and restaurants, and they are based on stringent requirements for and the risk assessment of retailers. Funds are collected weekly by autogiro. Svenska Spel also has a well-developed system for controlling abnormal cash flows among retailers. In the case of retailers who do not pay on time, measures are taken to hedge payment flows by requesting collateral during the period of the retailer agreement and imposing short invoice-to-payment periods on the retailer. There is a set limit structure for the investment of surplus liquidity that entails that investment may be made with counter-parties with a credit rating equal to or higher than A according to Standard & Poor’s credit rating. Instructions also limit the size of the investment with each institution.

Maximum credit exposure 31 Dec. 2011 31 Dec. 2010

Index-linked treasury bonds, Swedish State 1,685 1,525

Lending to credit institutions 2,264 2,273

Bonds and commercial paper 1,146 654

Accounts receivable and other receivables 681 611

Set-off, Swedish National Debt Office 1,200 1,200

Total 6,976 6,262

liquidity riskLiquidity risk is defined as the risk that the Group will not have access to cash and cash equivalents to be able to make timely payments of foreseen and unforeseen commitments or that financing can only be gained at considerable cost. Liquidity risk has historically been low and each year the Group accumulates substantial amounts of cash and cash equivalents and non-restricted equity that is paid annually in its entirety to the owner.

Financial liabilities consist of unpaid profits, funded winnings and supp-lier liabilities. The liquidity risk in financial liabilities pertains to the Group having insufficient cash and cash equivalents to be able to pay unpaid winnings due to winners. This risk is considered negligible as most games and lotteries are based on an allocation of funds among participants in the game. As gaming may not be pursued using credit, the funds to be alloca-ted among participants in the game or lottery are available in the form of cash at the time the game or lottery closes. Winnings in the Triss Månads-klöver are paid for up to 25 years, apart from certain campaigns that may lead to winnings being paid out for up to 50 years. This lottery is adminis-trated by a third party and based on funds being paid for each win to the administrator to cover future payments to the winner.

To minimise liquidity risk, the Group works proactively in matching asset maturities with anticipated payout dates.

The table below shows the maturity structure for Group liabilities for the Triss Månadsklöver lottery winnings and currency futures. The amounts shown in the table are the contractual, undiscounted cash flows.

31 Dec. 2011Within 3 months

Within 3 months

–1 yearWithin

1–5 yearslater than

5 years

Liabilities, Triss Månadsklöver 39 118 560 855

Currency futures — 1 — —


notes

Financial liabilities, GroupFinancial assets valued at fair

valued via the income statement

Sek million, 31 Dec. 2011Holdings for

tradingClassified on the initial

reporting dateOther financial

liabilitiesTotal fair

value

Accounts payable and other liabilities — — 625 625

Unpaid winnings, Triss Månadsklöver — 1,572 — 1,572

Other current and non-current, non-interest bearing liabilities — — 903 903

Total 3,100

Financial assets valued at fair valued via the income statement


tradingClassified on the initial

reporting dateOther financial

liabilitiesTotal fair

value

Accounts payable and other liabilities — — 568 568

Unpaid winnings, Triss Månadsklöver — 1,437 — 1,437

Other current and non-current, non-interest bearing liabilities — — 714 714

Total 2,719

Note 12 Financial instruments

The following table shows the allocation of financial instruments based on the following categories in accordance with IFRS 7: Financial assets at

fair value through the income statement, investment held to maturity, loan trade receivables, and available-for-sale financial assets.

Financial assets, Group Financial assets valued at fair valued via the income statement


tradingClassified on the

initial reporting dateInvestments

held to maturityloan and trade

receivablesFinancial assets

available for saleTotal fair

value

Index-linked treasury bonds — 1,685 — — — 1,685

Investments in zero-coupon bonds and commercial papers — — 1,145 — — 1,145

Currency futures 1 — — — — 1

Accounts receivable and other receivables — — — 537 — 537

Set-off, National Debt Office — — — 1,200 — 1,200

Cash and cash equivalents — — — 2,264 — 2,264

Total 6,832

Financial assets valued at fair valued via the income statement


tradingClassified on the

initial reporting dateInvestments

held to maturityloan and trade

receivablesFinancial assets

available for saleTotal fair

value

Index-linked treasury bonds — 1,525 — — — 1,525

Investments in zero-coupon bonds and commercial papers — — 654 — — 654

Currency futures — — — — — —

Accounts receivable and other receivables — — — 495 — 495

Set-off, National Debt Office — — — 1,200 — 1,200

Cash and cash equivalents — — — 2,273 — 2,273

Total 6,146

For financial investments in the categories investments held to maturity, loan receivables and accounts receivable, as well as financial assets available for sale, the fair value is deemed to match the carrying value.


cont. note 12

assets, Sek million level 1 level 2 level 3 Total

Real interest-rate bonds 1,684 — — 1,684

Currency futures — 1 — 1

Cash and cash equivalents 2,264 — — 2,264

assets, Sek million level 1 level 2 level 3 Total

Unpaid winnings Triss Månadsklöver — 1,572 — 1,572

Interest risk Instruments (measurement principle nominal value Maturity date Coupon rate, %

Real interest-rate bonds

Swedish Government’s real interest-rate bonds

1572 39 2012-03-21 6.00

3106 133 2012-04-01 1.00

3001 78 2014-04-01 0.00

3105 241 2015-12-01 3.50

3107 286 2017-06-01 0.50

3102 151 2020-12-01 4.00

3108 248 2022-06-01 0.25

3104 128 2028-12-01 3.50

Interest risk Instruments (measurement principle) nominal value Maturity date Coupon rate, %

Investments in zero-coupon bonds, commercial papers and deposits

Within 180 interest days 447 2012-01-11 2.38

46 2012-01-23 2.68

54 2012-01-26 2.69

100 2012-02-01 2.55

48 2012-02-28Variable (Stibor,

3 months)

450 2012-05-02 2.41

Total 1,145

Cash and cash equivalents 2,264 1.94

Interest risk Instruments (measurement principle) nominal value

present value weighted real

discount rate, %

Winnings fund for Triss Månadsklöver lottery

Within 1 year 158 0.133

Between 1 and 5 years 561 0.072

More than 5 years 866 0.043

Total 1,585

Financial instruments recognised at fair valueSvenska Spel measures its real interest-rate bonds and currency futures at fair value in profit or loss. Under IFRS 7, real interest-rate bonds are classified in the

value hierarchy 1 since they are measured at market prices, and currency futu-res are classified in the value hierarchy 2 since they are measured at observable market data.

Security holdings, Triss MånadsklöverTotal security holdings concerning Triss Månadsklöver amounted to SEK 1,684,000 (1,546,000), of which SEK 1,493,000 (1,525,000) comprises the non-current portion and SEK 191 million (21) the current portion. Acquisitions

and sales, as well as net realised and unrealised value changes for Triss Månads-klöver amounted to a loss of SEK 15 million (gain: 6) and the value change of the asset was SEK 138 million (62).


notes

Note 14 Prepaid expenses


Sek million 2011 2010 2011 2010

Prepaid retailer commissions 7 13 7 13

Other interim receivables 136 103 107 74

Total 143 116 114 87

Note 15 cash and cash equivalents


Cash and cash equivalents, Sek million 2011 2010 2011 2010

Cash and cash equivalents/cash and bank 2,264 2,273 2,023 2,185

of which collateral on deposit from retailers 9 12 9 12

31 December 2010 1 January 2010

Sek million

amount reported in 2010

annual report


annual report Reclassification


annual report


annual report Reclassification

Group

Current receivables 1,664 1,811 147 1,754 1,901 147

Current investments 107 654 547 953 208 –745

Cash and cash equivalents 2,966 2,273 –693 2,451 3,049 598

parent Company

Current receivables 2,159 2,306 147 2,273 2,419 146

Current investments 1,153 654 –499 980 208 –772

Cash and cash equivalents 1,832 2,185 353 2,294 2,920 626

Changes have occurred in respect of the Company’s classification of cash and cash equivalents, which have entailed reclassification for the Group and Parent Company.

Current investments with a maturity of less than three months, which are subject to insignificant risk of value fluctuations and can easily be converted

into bank funds re now reported ads cash and cash equivalents. The funds on gaming accounts that Svenska Spel’s customers hold are reported as a current receivable. As a result of the changes in classification, adjustments have been made for previous periods in the table below.

Reclassification has also been conducted in respect of funds loaned to the State, which have been reclassified from current operations to financing

operations in the amount of SEK 100 million for the period 1 January–13 December, 2010.

Note 16 Reclassification of cash and cash equivalents

Note 13 trade and other receivables


Sek million 2011 2010 2011 2010

Trade receivables

Receivables, gaming and lottery retailers 321 293 321 293

Receivables, restaurants 27 27 27 27

Other trade receivables 14 15 10 7

Total 362 334 358 327

Other receivables

Other current receivables 176 161 166 153

Total 176 161 166 153

Total trade and other receivables 538 495 524 479

All trade receivables are due within 30 days. Doubtful trade receivables amount to SEK 1.7 million (2.1); costs for losses on trade receivables amounted to SEK 1.0 million (1.0).

Stock is reported at the lower of cost and net sales value. Cost is deter-

mined through the application of the first in, first out (FIFO) method. This consists almost exclusively of foodstuffs for restaurant operations conducted in the Group. Stock is reported in the balance sheet among trade receivables and other receivables.


GroupShare capitalThe registered share capital was 2,000 ordinary shares at 31 December 2010, at a par value of SEK 100 per share. Holders of ordinary shares are entitled to dividends that are retrospectively determined.

Statutory reserveThe Group has statutory reserves amounting to SEK 82,000 (82), of which SEK 40,000 (40) pertains to the Parent Company.

accrued earningsRetained earnings, including profit for the year, include profit in the Parent Company and its subsidiaries.

Distribution of surplusThe Government disposes of the Parent Company’s profit after tax. The Company’s profit for the financial year is loaned interest-free to the Swedish State.

Payments are made on a quarterly basis: 30 April, 31 July, 31 October and 15 February. Funds loaned are deducted from the dividend flowing a decision of the Company’s AGM. For the 2010 profit, SEK 4,766 million (4,977) was paid to the owner, the Swedish State, following the decision of the 2011 AGM. In conjunction with payment, advances paid to the owner during 2010, amounting to SEK 1,200 million (1,300) were deducted. Over the course of 2011, SEK 1,200 million, relating to the profit for 2011, was loaned to the State.

Parent CompanyAB Svenska Spel is 100-per cent owned by the Swedish State and is under the administration of the Ministry of Finance.

non-restricted equityThis consists of non-restricted equity from the preceding year after anyprovisions are made to statutory reserves and profit distribution. Non-res-tricted equity is the amount available for distribution to shareholders.

Note 17 equity

Note 18 earnings per share

The calculation of earnings per share for 2011 is based on profit for the year attributable to equity holders of the Parent Company in the amount of SEK 5,007 (4,766) divided by the average number of shares outstanding. Earnings

per share for 2011 totalled SEK 2,503 (2,383) The number of shares outstan-ding did not change during the year. No equity instruments have been issued that could cause dilution of equity.

Svenska Spel’s liabilities consist of current and non-current winnings in accordance with an established prize scheme. Winnings that are due within 1 year are current and consist of Triss Månadsklöver and Tia Kalas-vinsten, which are paid during the year on an ongoing basis, as well as winnings in other games and lotteries.

Non-current liabilities comprise unpaid winnings that belong to the winners of Triss Månadsklöver that are paid out for up to 25 years in accor-dance with the standard prize scheme, and with certain campaign winnings may be paid out for up to 50 years. Tia Kalas was discontinued during the year, but there are payments to be made to winners for up to 10 years.

Note 19 Unpaid winnings


Sek million 2011 2010 2011 2010

Current liabilities

Unpaid winnings, traditional games and lotteries 344 245 344 245

Unpaid winnings, Triss Månadsklöver <1 year 157 149 157 149

Total 501 395 501 395

non-current liabilities

Unpaid winnings, Triss Månadsklöver 1–5 years 560 526 560 526

Unpaid winnings, Triss Månadsklöver >5 years 855 762 855 762

Unpaid winnings, Tia Kalas 1–5 years 4 5 4 5

Total 1,419 1,293 1,419 1,293


notes


Sek million 2011 2010 2011 2010

Settlement funds

Provision at the beginning of the year 125 160 125 160

Change for the year 11 –35 11 –35

provision at the end of the year 136 125 136 125

Funded winnings

Provision at the beginning of the year 143 415 95 381

Change for the year 142 –272 132 –286

provision at the end of the year 285 143 227 95

Note 22 settlement funds and funded winnings

Unclaimed winnings and payment rounding amounts are placed in the settlement fund for games and lotteries. Withdrawals from the settlement fund are used for payment of claimed winnings (claims), repayment to winning participants in various games and to increase winnings frequency

in lotteries. Funded winnings consist of current winnings per product and game. In the case of games, profits are allocated to the fund after the completion of games and series; while in the case of lotteries, profit is allo-cated when the lottery ticket is activated, meaning when the lottery starts.

Subordinated loan consists of funds provided by the owner in conjun-ction with the construction of the Company’s property in Visby. There is no specified settlement date for the settlement of the liability.

In certain cases, AB Svenska Spel requires retailer collateral based on individual assessment of each retailer which is held for the duration the retailer is active, hence making it noncurrent liability.

pension provisionPension provisions are calculated in the Parent Company according to the Pension Obligations Vesting Act and reported in the balance sheet as a non-current liability.

Alecta manages large portions of the ITP plans, which are insured via Collectum. Alecta’s consolidation level was 113% (146) on 31 December 2011. The consolidation level is determined as the fair value of managed assets as a percentage of liabilities based on Alecta’s actuarial assumptions. Alecta’s calculation does not currently conform with the basis of calculation in IAS 19. In 2011, costs for the Group’s pension insurance amounted to SEK 76.6 million (66.3), of which those taken out with Alecta amounted to SEK 34.6 million (38.5).

The funds at the disposal of Svenska Spel’s Pension Fund do not fully cover Svenska Spel’s pension commitments. The difference is recognised as a non-current liability in the balance sheet.

Note 20 other non-current liabilities


Sek million 2011 2010 2011 2010

Provisions for pensions 11 12 10 12

Subordinated debentures 15 15 15 15

Retailer collateral 9 12 9 12

Other non-current liabilities 1 1 — —

Total 36 40 34 39

Note 21 trade payables and other current liabilities


Sek million 2011 2010 2011 2010

Trade payables 295 276 224 225

Other liabilities 246 209 218 184

Employee-related expenses 85 83 — —

Total 625 568 442 409

Accrued costs for the Parent Company are presented in Note 24.


Note 25 leasing

Operating lease agreements Group/Parent Company as lesseeAll leasing agreements entered into by Svenska Spel are of an operational nature. Leasing agreements mainly relate to rent of office and casino pre-mises. The Group’s rental costs amount to SEK 78.4 million (68.4), of which SEK 71.5 million (61.0) pertains to rent on premises. The Parent Company’s leasing costs for 2011 amounted to SEK 42.3 million (42.1), of which SEK 35.3 million (34.6) pertains to rent on premises. The Parent Company’s ren-tal costs for 2011 are SEK 42.3 million (42.1), of which SEK 35 million (34.6) pertains to rent of premises.

The casino in Sundsvall has a 30-year lease, while the leases for the casi-nos in Gothenburg and Malmö extend over 20 years. The leases contain an indexing clause for the annual calculation of rental payments. The Parent Company’s rental costs pertain to office premises in Sundbyberg. The rental period is 10 years.


Operating lease agreements – Group/parent Company as lessee, Sek million 2011 2010 2011 2010

Within 1 year 58 60 31 33

Within 1–5 years 235 239 122 130

More than 5 years 283 306 35 68

Total 577 606 188 231

Note 23 maturity structure for liabilities

Maturity dates, Sek millionUnpaid

winningsTrade

payablesSettlement

fundsFunded

winnings

Other non- current

liabilities Total

Within 1 year 501 625 136 285 — 1,547

Within 1–5 years 560 — — — 21 581

More than 5 years 859 — — — 15 874

Total 1,920 625 136 285 36 3,001

Index-linked treasury bonds Maturity date

Within 1 year 172

Within 1–5 years 319

More than 5 years 812


Operating lease agreements – Group/parent Company as lessee, Sek million 2011 2010 2011 2010

Within 1 year 48 49 48 49

Within 1–5 years 192 197 192 197

Total 240 247 240 247

Operating lease agreements Group/Parent Company as lesseeThese agreements relate to the renting out of gaming and lottery termi-nals to retailers. After 5 years, the annual revenue from operational leasing

agreements, pertaining to the renting out of terminals to gaming and lot-tery agents, is assessed as amounting to about SEK 50 million annually.

Note 24 Deferred income


Sek million 2011 2010 2011 2010

Prepaid stakes for multiple-week games 99 156 99 156

Other items — — 37 14

Employee-related expenses — — 48 47

Total 99 156 185 216 The Group’s expenses for salaries, social security expenses and changes in holiday pay liability, etc. are recognised under Other liabilities, see Note 21.


notes

Note 27 affiliates

Group companiesInternal pricing is implemented in accordance with the fundamental principle that prices are to be set as if the transactions were carried out between two independent companies. In 2011, the Parent Company purchased services from other companies in the Group at a value of SEK 0.0 million (0.0) and sold services to other companies in the Group at a value of SEK 7.2 million (7.5).

State-owned companiesDuring the year, the Group purchased services for substantial amounts from the following State-owned companies:

TeliaSonera AB SEK 58.4 million (59.0)

Posten AB SEK 30.6 million (28.5)

Swedish StateAccording to a licence issued by the Government on 22 December 2004 to organise lotteries, under Other provisions, item 8.5, the Company’s profit during the financial year shall be lent to the Swedish State (National Debt Office). Payments are to be made on a quarterly basis on 30 April, 31 July, 31 October and 15 February. Advance funds are deducted from dividends following the resolution of the AGM for the year. On 5 October 1998, Svenska Spel was granted exemption from the provisions in Chapter 21, section 1 of the Swedish Companies Act with respect to the prohibi-tion on loans. At year-end, funds on loan to the National Debt Office total-led SEK 1,200 million (1,200).

Note 26 contingent liabilities, pledged assets and future obligations


Contingent liabilities, Sek million 2011 2010 2011 2010

Guaranteed amount on corporate acquisitions — 4 — —

Total — 4 — —


pledged assets, Sek million 2011 2010 2011 2010

Credit guarantees 1 2 1 1

Total 1 2 1 1

Future obligations concerning purchase of property, plant and equipment and other contracted commitments, Sek million


2011 2010 2011 2010

Within 1 year 285 558 284 538

Within 1–5 years 126 174 126 169

More than 5 years — — — —

Total 410 731 410 707

The contractual commitments relate to sponsoring agreements and other major agreements with business partners.


leased retailer terminals, Sek million 2011 2010 2011 2010

Opening cost 146 146 146 146

Purchases for the year — — — —

Sales for the year –1 — –1 —

Closing cost 145 146 145 146

Opening depreciation –137 –108 –137 –108

Depreciation for the year –8 –29 –8 –29

Sales for the year 1 — 1 —

Closing depreciation –144 –137 –144 –137

Carrying amount 1 9 1 9

cont. note 25


Note 28 Participations in Group companies

parent Company’s participations in Group companies, Sek thousand 2011 2010

Opening cost 141,466 141,466

Sale — —

Returned shareholders’ contributions — —

Closing accumulated cost 141,466 141,466

Opening impairment* –70,000 –70,000

Impairment for the year* — —

Closing accumulated impairment –70,000 –70,000

Carrying amount 71,466 71,466

* Refers to the impairment of shares and participations in Svenska Spels Förvaltnings AB due to the carrying amount exceeding the consolidated net value.

parent Company’s participations in subsidiaries Corp. reg. no. Reg. officeShare of

equity, %number

of sharesCarrying value

Sek 000s 31 Dec. 2011Carrying value

Sek 000s 31 Dec. 2010

Svenska Spels Förvaltnings AB 556597-7278 Visby 100 1 000 71,066 71,066

Keno AB (dormant) 556485-4304 Visby 100 1 000 100 100

Triss AB (dormant) 556485-4312 Visby 100 1 000 100 100

Bellman Casino AB (dormant) 556574-1682 Stockholm 100 1 000 100 100

Casino Cosmopol AB 556485-4296 Stockholm 100 1 000 100 100

parent Company’s participations in indirectly owned subsidiaries Corp. reg. no. Reg. office

Share of equity, %

number of shares

CC Casino Restaurang AB 556586-7016 Stockholm 100 1,000

Casino Cosmopols Fastighets AB 556598-3409 Stockholm 100 1,000

AB Svenska Spels Servicecenter 556240-7881 Visby 100 1,000

AB Svenska Spels Internetservice 556485-4320 Visby 100 1,000

Playscan AB 556801-1935 Göteborg 100 1,000

Note 29 Profit from participations in Group companies


Sek million 2011 2010 2011 2010

Anticipated dividend from Casino Cosmopol AB — — 554 536

Note 30 Uncertainty in estimates and assessments

Note 31 information about the Parent company

Sources of uncertainty in estimatesExecutive management has analysed significant uncertainties for the Group’s development as well as core accounting policies. The following is a list of certain key risk factors that could affect Svenska Spel’s business, financial position and profit.

Recoverability of capitalised development expendituresAt year-end, the Svenska Spel Group had capitalised development expen-ditures totalling SEK 185 million (201). The expenditures pertain to several systems platforms for games operated by Group companies such as restau-rant games of the Vegas type, as well as Triss, Stryktipset, Lotto, and Bingo, etc. Naturally, the ability to recover current capitalised development expen-diture is dependent on future sales prospects for these games associated

AB Svenska Spel is a limited liability company registered in Sweden with Corporate Reg No.: 556460-1812. Its registered office is in Visby, Sweden. The Ministry of Finance manages the shares in the Parent Company.

with particular gaming platforms and the incomes they generate. The carrying amount of the platforms involved may be significantly affected should the income-generating opportunities for these platforms and their lifetime not prove reasonable.

Provision for future profitCertain products such as Lotto and Joker, etc. have winnings schedules based on statistical probability calculations for the payout of winnings. Chance is a factor that affects the actual outcome. The follow up of out-comes is conducted continually and the statistical calculations are scruti-nised in the event of the emergence of major deviations.

The address of the head office is Norra Hansegatan 17, 621 80 Visby, Sweden. Svenska Spel’s 2011 Annual Report was approved for publication by the Board of Directors on 16 March 2012.


Visby 16 March 2012

Anitra Steen


Hans Bergenheim Björn Fries Catarina Fritz

Board member Board member Board member

Eva-Britt Gustafsson Lena Jönsson Michael Thorén


Christer Åberg

Board member

Anders Andersson Jenny Bengtsson Martina Ravn

Board member/ Board member/ Board member/

Employee representative Employee representative Employee representative

Lennart Käll

President and CEO

Our Audit Report relating to this Annual Report was submitted on 16 March 2012

Deloitte AB

Lars Egenäs

Authorised Public Accountant

The Board and CEO affirm that the consolidated accounts have been prepared in accordance with the International Financial

Reporting standards (IFRS) as approved by the EU and, provided an accurate and fair view of the Group’s financial position and

results of operations. The annual financial statements have been prepared in accordance with generally accepted accounting

practices and give a true and fair picture of the Company’s financial position and profit.

The Administrative Report for the Group and Parent Company gives an accurate and fair overview of the Group and Parent

Company’s business, position and profit and describes material risks and uncertainties faced by the Group and its companies.


Auditor’s report

Report on the annual accounts and consolidated

financial statements

We have audited the annual accounts and the consolidated financial

statements of AB Svenska Spel for the financial year from 1 January

2011 to 31 December 2011, with the exception of the Corporate

Governance Report on pages 48–57. The company’s annual accounts

and consolidated financial statements are included in the printed

version of this document on pages 7–92 and page 94.

Responsibilities of the Board of Directors and the CeO for

the annual accounts and consolidated financial statements

The Board of Directors and the CEO are responsible for the prepara-

tion and fair presentation of these annual accounts and consolidated

financial statements in accordance with International Financial

Re porting Standards, as adopted by the EU, and the Annual Accounts

Act, and for the internal control deemed necessary by the Board of

Directors and the CEO for the preparation of annual accounts and

consolidated financial statements that are free from material misstate-

ment, whether such misstatement is due to fraud or error.

auditor’s responsibility

Our responsibility is to express an opinion on the annual accounts

and consolidated financial statements based on our audit. We con-

ducted our audit in accordance with International Standards on

Auditing and generally accepted auditing standards in Sweden. These

standards re quire that we comply with ethical requirements and plan

and perform the audit to obtain reasonable assurance that the annual

accounts and consolidated financial statements are free from material

misstatement.

An audit involves performing procedures to obtain audit evidence

about the amounts and disclosures in the annual accounts and con-

solidated financial statements. The auditor chooses such procedures

based on such assessments as the risk of material misstatement in the

annual accounts and consolidated financial statements, whether such

misstatement is due to fraud or error. In making these risk assess-

ments, the auditor considers internal control measures relevant to the

company’s preparation and fair presentation of the annual accounts

and consolidated financial statements in order to design audit proce-

dures that are appropriate taking the circumstances into account, but

not for the purpose of expressing an opinion on the effectiveness of

the company’s internal control. An audit also includes evaluating the

appropriateness of accounting policies used and the reasonableness

of accounting estimates made by the Board of Directors and the CEO,

as well as evaluating the overall presentation of the annual accounts

and consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient

and appropriate to provide a basis for our audit opinion.

Opinions

In our opinion, the annual accounts have been prepared in accordance

with the Annual Accounts Act and present fairly, in all material respects,

the financial position of the parent company as of 31 December 2011

and its financial performance and cash flows for the year in accordance

with the Annual Accounts Act, and the consolidated financial state-

ments have been prepared in accordance with the Annual Accounts

Act and present fairly, in all material respects, the financial position of

the group as of 31 December 2011 and its financial performance and

cash flows in accordance with International Financial Reporting Stand-

ards, as adopted by the EU, and the Annual Accounts Act. Our opinion

does not encompass the Corporate Governance Report on pages

48–52. The statutory administration report is consistent with the other

parts of the annual accounts and consolidated financial statements.

We therefore recommend that the annual meeting of shareholders

adopt the income statement and balance sheet for the parent com-

pany and the group.

Report on other legal and regulatory requirements

In addition to our audit of the annual accounts and consolidated

financial statements, we have examined the proposed appropriations

of the company’s profit or loss and the administration of the Board of

Directors and the CEO of AB Svenska Spel for the financial year from

1 January 2011 to 31 December 2011. We also performed a statutory

review of the Corporate Governance Report.

Responsibilities of the Board of Directors and the CeO

The Board of Directors is responsible for the proposal concerning

the appropriation of the company’s profit or loss, and the Board of

Directors and the CEO are responsible for administration and that

the Corporate Governance Report on pages 48–57 was prepared

under the Companies Act.

auditor’s responsibility

Our responsibility is to express an opinion with reasonable assurance

on the proposed appropriations of the company’s profit or loss and

on the administration based on our audit. We conducted the audit in

accordance with generally accepted auditing standards in Sweden.

As a basis for our opinion on the Board of Directors’ proposed

appropriations of the company’s profit or loss, we examined the

Board of Directors’ reasoned statement and a selection of supporting

evidence in order to be able to assess whether the proposal complies

with the Companies Act.

As a basis for our opinion concerning discharge from liability, in

addition to our audit of the annual accounts and consolidated finan-

cial statements, we examined significant decisions, actions taken and

circumstances of the company in order to determine whether any

member of the Board of Directors or the CEO is liable to the company.

We also examined whether any member of the Board of Directors or

the CEO has, in any other way, acted in contravention of the Compa-

nies Act, the Annual Accounts Act or the Articles of Association.

To the annual meeting of the shareholders of AB Svenska Spel

Corporate Registration Number 556460-181


Five-yeaR sUmmaRy

Five-year summary, Svenska Spel GroupCondensed income statement, Sek million 2011 2010 2009 2008 2007

Net gaming revenue 9,687 9,624 9,905 9,804 9,598Commissions –1,973 –1,949 –2,020 –1,983 –1,916Other revenue* 205 209 211 250 233net sales from gaming operations, etc. 7,919 7,885 8,096 8,071 7,915

Capitalised work for own account 28 3 15 11 20Employee expenses –1,011 –989 –971 –924 –895Other external expenses –1,710 –1,758 –1,890 –1,853 –1,695Depreciation, amortisation and impairment of intangible assets, property, plant and equipment –286 –346 –329 –320 –309Operating profit 4,940 4,795 4,921 4,985 5,036

Other financial income and expenses — — — — 90Interest and financial income 204 86 137 290 215Interest and finance income and taxes –138 –115 –81 –167 –92Income for the year 5,007 4,766 4,977 5,108 5,247

key indicatorsOperating margin, % 21,9 21,8 21,9 21,9 23,6Earnings per share, SEK million 2,5 2,4 2,5 2,6 2,6Equity ratio, % 61,8 63,7 62,2 64,6 65,9Net revenue per employee, SEK million 4,5 4,5 4,6 4,7 5,0Gaming and lottery retailers, number 6,210 6,604 6,758 6,811 6,385Gaming locations with Vegas 2,254 2,230 2,187 2,229 2,248

Other informationPaid to Swedish Sports Confederation** — — 500 1,338 1,394Paid to Swedish National Board for Youth Affairs** — — — 182 196Proposed payment/Paid to the Swedish State 5,007 4,766 4,477 3,587 3,657 * Includes unclaimed winnings through September 2009.** Svenska Spel’s Articles of Association stipulate that the Group’s unappropriated fund shall be allocated as prescribed by the Government. As of 2010, Svenska Spel’s

proceeds are paid to the Swedish Government and no direct payment has been made to the Swedish Sports Confederation or National Board for Youth Affairs.

Stockholm, 16 March 2012

Deloitte ABLars Egenäs

Authorised Public Accountant

We believe that the audit evidence we have obtained is sufficient

and appropriate to provide a basis for our opinion.

In addition, we have read the corporate governance report and,

based on this reading and our knowledge of the company, we

believe we have sufficient basis for our statement. This means that

our statutory examination of the corporate governance report has

another orientation and a significantly smaller scope compared with

the direction and scope that an audit in accordance with International

Standards on Auditing and good accounting practise in Sweden has.

Statement

We recommend to the annual meeting of shareholders that the profit

of the Parent Company is dealt with in accordance with the proposal

in the administration report and that the members of the Board of

Directors and the CEO are discharged from liability for the financial

year. A corporate governance report has been prepared and its statu-

tory information is compliant with the other sections of the Annual

Report and the consolidated financial accounting.


Corporate Social Responsibility Report 95Comment from the CeO and CSR Manager 96 long-term sustainable development 97 Stakeholders’ expectations 101Social responsibility and responsible gaming 103Responsibility for employees 112economic responsibility 116environmental responsibility 119

Comments on the CSR Report 122Svenska Spel’s GRI-profile 123Board signatures 130auditor’s Combined assurance Report 131

How we report Svenska Spel’s responsibility and sustainabilityFor the fifth consecutive year, svenska spel publishes a csR Report in accordance with the guidelines of the Global Reporting initiative (GRi). Reporting occurs once a year as part of the annual Report. Reporting of svenska spel’s responsibility process is also part of the social responsibility report that the ministry of Finance requests on an annual basis.

the csR Report describes svenska spel’s efforts in the focus areas of business ethics and security, social responsibility and responsible gaming, responsibility for employees, economic responsibility, and environmental responsibility.

svenska spel’s performance in relation to its commercial signifi-cance in the focus areas of business ethics, social responsibility and

environmental responsibility has been evaluated in relation to the company’s key stakeholders. the aim is for svenska spel’s social responsibility priorities to be aligned with the needs and expecta-tions of external stakeholders.

csR data for reporting have been selected through a number of workshops in which key personnel have participated. Data has thereafter been submitted from the operations. svenska spel’s Group c ontrolling support function is responsible for collection and quality assurance.

the csR Report covers the 2011 calendar year and includes the Parent company and subsidiaries. the previous report (csR Report 2010) was issued in april 2011.

CSR Report95–132


csR RePoRt / comments FRom tHe ceo anD tHe csR manaGeR

Responsibility is part of our offering

venska Spel is part of society and customer

care is a key aspect of our mandate. Our

approach is that gaming should be enjoyable

for everybody, but we are keenly aware that

this is not always the case. Each individual

who develops a gambling addiction is a failure for our indus-

try. Consequently, we see it as our ultimate responsibility to

prevent gambling problems and minimise the hazardous

aspects of gaming.

As part of our social responsibility, we also seek to limit the

environmental impact of our operations and products. We also

impose environmental requirements throughout our procure -

ment activities not least in areas that entail substantial environ-

mental impact – such as goods transport – and systematically

monitor our suppliers’ environmental efforts.

Svenska Spel’s responsibility programmes are based on a

recognised global standard, namely, European Lotteries, and

we pursue an exchange with other gaming companies – both

national and international –as regards know-how and positive

experiences. Our objective is to be at the forefront, continually

identifying new paths to superior responsible gaming.

Dialogue with our customers, politicians and other stake-

holders is also a key source of knowledge and, using this

dialogue, we can identify community expectations regarding

our role. We are now working on the development of a model

to estimate Svenska Spel’s social value as a tool for communi-

cations. Among other points, this involves how we contribute

to society in the form of sponsoring, research, salaries, enjoy-

ment and excitement. But we will also show the social costs

arising from our gaming activities.

As we now enter a new year, we view collaboration with

research a significant component in the development of

responsible gaming for the next generation. Among other

insights, we need to know which gaming measures are actu-

ally useful and thus focus resources on in-house development

of the right action programmes. In cooperation with external

gaming companies and our own research council, we aim to

develop new insight and new approaches in 2012.

We view our responsible gaming programmes as a key fea-

ture of our customer offering. We can contribute to positive

social development by enabling customers to gain control of

their gaming.

Lennart Käll, CEO

Zenita Strandänger, CSR Manager

”as we now enter a new

year, we view collaboration with research a significant

c omponent in the development of responsible gaming for the

next generation.

S


This is long-term sustainable development for Svenska SpelFor Svenska Spel, long-term sustainable development involves integrating business operations with social responsibility. Taking social responsibility seriously is fully in line with the company’s vision – gaming shall be enjoyed by all.

venska Spel’s efforts to attain long-term

sustainable development derives from the

mandate to conduct gaming operations in

a responsible manner. Activities must also

be pursued using a business-like approach.

Among other points, this means that:

• Svenska Spel develops and offers games in a responsible

manner to enable customers to experience gaming enjoy-

ment – a sustainable gaming experience, in other words.

• Svenska Spel seeks to minimise the impact that the com-

pany’s production and operations have on third parties.

• Svenska Spel seeks to create value and contribute to posi-

tive social development.

• Svenska Spel seeks good relations with stakeholders and

values their viewpoints, while working to meet stakehold-

ers’ expectations regarding the company.

Svenska Spel describes long-term sustainable development

by means of four key strategic areas: Social responsibility and

responsible gaming, Responsibility for employees, Economic

responsibility and Environmental responsibility. Business

ethics permeate Svenska Spel and provide a platform for

sustainability efforts. The dialogue with stakeholders is crucial

when it comes to defining where Svenska Spel has its impact

and which areas should be a priority for its efforts.

That Svenska Spel is not subject to a profit maximisation

requirement from its owner is a prerequisite in being able to

focus both on responsible gaming and on the other areas of

responsibility.

View our responsibility model and how we define our

strategic areas of responsibility on page 99.

Mandate, mission and values

In line with the mandate from its owner – the Swedish State

– Svenska Spel shall represent a reliable alternative to illegal

gaming activities. The assumption of responsibility shall be

a distinct and natural feature of the gaming experience and

make a difference in the customer’s choice among gaming

alternatives. The company’s mission reads: “We develop

and offer gaming in a responsible manner so that the

many people who use our products experience gaming

pleasure.”

Svenska Spel has entertained Sweden over several decades

and we intend to continue adding a gilt edge to people’s

everyday life. Our vision is that gaming should be enjoyed by

all. Our values are the internal guide that describes how we

behave towards each other and our customers.

S

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csR RePoRt / lonG-teRm sUstainaBle DeveloPment

Overarching sustainability goal

Svenska Spel’s overarching sustainability goal is to implement

and highlight the company’s mandate to provide gaming in

a manner that is responsible, safe and compatible with busi-

ness ethics.

This is aimed at ensuring long-term sustainable operations,

increased trust in Svenska Spel as a responsible company and

creating a sustainable gaming experience.

Strategic target areas

Svenska Spel’s control model encompasses the target areas

of Customers, Responsibility, Business-like approach and

Employees.

• Customers To grow in terms of revenue with a stable mar-

ket share, the Company seeks to channel more customers

from other gaming companies to Svenska Spel’s gaming

environments.

• Responsibility Being perceived as the most responsible

gaming company means that the assumption of responsi-

bility covers everything that Svenska Spel does. Responsible

gaming, business ethics and security are key examples of

always combining gaming experiences with responsibility.

We must channel customers from other gaming companies

by simply being the best alternative in reducing the risk of

unhealthy gaming patterns and providing know-how and

support systems to raise players’ potential to game safely,

soundly and securely. Responsible gaming should be as

much an integral feature in marketing as it is in gaming

operations.

• Business-like approach Increased revenue, tight cost

control, and sustainable earnings, also in the long term,

entail – in line with our mandate – the creation of a con-

siderate and responsible gaming environment. Success in

this respect requires that Svenska Spel continues to have

a high market share.

• Employees Being a long-term profitable company is

possible only if we have committed and motivated

employees.

Responsibility and implementation

Responsibility for sustainability programmes is an integral

component of day-to-day operations. Ultimate responsibility

lies with the Board and Group executive management, with

the primary responsibility resting with the Communication

Manager. The mandate from the owner includes guidelines

on how sustainability programmes should be pursued.

Svenska Spel’s Corporate Social Responsibility (CSR) unit

– part of the Communication & CSR staff – is responsible for

overall policies, strategies, processes, tools and key data in

respect of ethics and responsibility issues. The CSR unit also

has overall responsibility for the annual CSR report and its

follow up throughout the year.

An environmental council and a responsible gaming coun-

cil have been established under the supervision of the CSR

unit, with representatives from various business areas and

staff units. The purpose is to support the implementation of

the overall responsibility goal and key data, in addition to the

monitoring of sustainability programmes.

Overarching challenges

For a long time, Svenska Spel has worked towards long-term

sustainable development and shall be a model in the area.

However, to be a real alternative to illegal gaming operations,

the Company must develop and offer established games

demanded by the customers. This requires licenses.

ValuesOur values describe how we behave towards each other and our customers. We shall be accessible, Considerate and Committed. Read more on page 112.

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Svenska Spel has identified and defined four areas in which stakeholders note a particular performance requirement in terms of responsibility in relation to the commercial significance.

Svenska Spel’s concept of responsibility

Environmental responsibility

Svenska Spel’s responsibility for reducing its environmental

impact by working proactively whenever possible.

Read more on pages 119–121

Financial responsibility

Svenska Spel’s responsibility is to always integrate responsible

gaming with the commercial venture. Svenska Spel seeks to be

the customer’s first choice and a creator of value in society.


Social responsibility and responsible gaming

Svenska Spel’s responsibility is to market gaming in a responsible and secure manner and to

minimise the adverse social implications of the Company’s operations and its products. Svenska

Spel shall contribute to positive community development in all areas in which it is active.


Business ethics and securityThe business ethics responsibility permeates Svenska Spel’s activities

and comprises a platform for sustainability programmes. This is defined as Svenska Spel’s responsibility to ensure that people,

economic resources and the environment are not abused, deceived or exploited by the Company’s operations.

Read more on pages 100 and 106–109


A major challenge is the marketing campaigns by foreign,

Internet-based companies, which have contributed to the

major increase of the total advertising spend by the Swedish

gaming industry in recent years. In certain cases, the installa-

tion of servers outside Sweden, for example, can circumvent

legislation and regulations observed by Swedish gaming

companies. This means that the regulated gaming compa-

nies compete in the same market but on a totally different

basis.

Another challenge is spreading information and know-

ledge regarding the Vegas VLTs, which Svenska Spel offers

by license of the Government. There are strict restrictions in

terms of installation, revenue, stakes and winnings. VLTs are

questioned by many because of the relatively high risk of

leading to gaming problems. Voices have been raised in

favour of an inquiry regarding VLTs some of which support-

ing a complete ban.

Business ethics and security

The responsibility deriving from Svenska Spel’s business

ethics permeates the entire company and offers a platform

for sustainability activities. It is Svenska Spel’s respon sibility to

ensure that people are not abused, deceived or in some

other manner exploited by the company’s operations.

Svenska Spel’s overarching objective in business ethics and

security is to highlight and prevent unethical behaviour, both

internally and externally. Svenska Spel’s activities must never

be utilised for money laundering or other criminal activities.

The development of competitive and popular products as

well as distribution channels – with responsible gaming and

gaming security as integral components – is an important

part of Svenska Spel’s operations.

Svenska Spel’s mandate includes:

• Recognising consumer need of a reliable alternative to

illegal gaming operations.

• Due consideration of the risk of fraud and illegal gaming.

• Seeking maximum security in gaming operations.

New Code of Conduct

Svenska Spel’s Code of Conduct summarises the Company’s

overall approach to responsible conduct. The purpose of the

Code is to describe clearly and concisely how employees and

ambassadors of Svenska Spel are expected to behave towards

each other, customers, suppliers, retailers, business partners

and others. The Code of Conduct is a more detailed descrip-

tion of the Company’s values.

Security and follow-up

The manager of the Group Security & Risk Management

function leads security activities at Svenska Spel. This unit

coordinates the Group’s overall risk management and moni-

tors that security work is conducted in line with Group secu-

rity policies and guidelines. The function is also responsible

for crisis and incident management at Group level and for

handling abnormal gaming activities. This is done in close

cooperation with, for example, the legal authorities concerned

and the police.

Svenska Spel holds a number of international security cer-

tifications. Security programmes are followed up continually

and internal audits are conducted regularly in all business

and operating areas. Reporting unit is the Audit Committee,

which is linked to the Board. There are strict regulations for

dealing with any deviations from corporate policy.

Read more about Svenska Spel’s efforts to counteract

money laundering and illegal gaming in the section entitled

“Social responsibility and responsible gaming”.

csR RePoRt / lonG-teRm sUstainaBle DeveloPment

tive net social result. A net social result is defined as the total

sum of the social costs that arise as a consequence of gaming

operations and the social values generated by the same gam-

ing operations. The social costs are not included neither in

Svenska Spel’s financial operations nor in the Company’s CSR

report based on GRI’s guidelines.

The respondents’ perceptions of Svenska Spel’s net social

result varied widely, from highly positive to highly negative.

Consequently, there is uncertainty regarding the effectiveness

of responsible gaming measures. It was difficult for the

respondents to differ between the effectiveness of the

responsible gaming of a single gaming company and that

of the whole gaming industry.

The conclusion is that Svenska Spel has to clarify the net

social result of its impact on society and the effect of Svenska

Spel’s responsibility measures.

Stakeholders’ expectations on Svenska Spel

Svenska Spel conducts an annual analysis of stakeholders’ views and expectations re garding the Company’s social responsibility. This provides a key platform for the development of operations, as well as for CSR reporting and future relationship with stakeholders.


Stakeholders’ opinionsthe dialogue with stakeholders is crucial for svenska spel’s sustainability programmes. For the csR report a number of stakeholders were asked what they think about svenska spel’s performance and future challenges in the area of responsible gaming. the interviews are a supplement to the interviews reported under the head-ing “stakeholder survey, 2011”.

Hillevi Fällström, Customer page 102Marie Risbeck, Institute of Public Health page 105Håkan Hallstedt, Swedish Gaming Board page 108Therese Lindström, Employee page 113Michael Thorén, Board member page 117

Priority groups, 2011

The selection of stakeholders for in-depth interviews was

based on the criteria, “influence on”, “perceived attitude

towards”, and “perceived interest in Svenska Spel’s responsi-

bility process”.

In spring 2011, Svenska Spel made in-depth interviews

with representatives of those stakeholder groups that have a

major influence on the Company’s long-term responsibility

programmes: the owner, the Board, executive management,

the Swedish Gaming Board and the National Institute of

Public Health.

The objective was to elucidate their perception of Svenska

Spel’s ability to fulfil its mandate.

The survey contained open questions focusing on Svenska

Spel’s impact on society – both positive and negative.

Stakeholder survey, 2011

The interviews indicate that Svenska Spel’s future is viewed

as being highly complex and uncertain. Unclear legal,

political and financial conditions create a complex image

of the reality in which Svenska Spel works. Technological

progress has created problems in the gaming industry,

making current legislation and regulations in sufficient.

The interviews also showed that the perceptions of the

various stakeholder groups differed. According to some of

the respondents, the gaming industry – including Svenska

Spel – generates extensive social costs. However, all inter-

viewees felt that Svenska Spel’s responsible gaming meas-

ures were more far-reaching than those of other gaming

companies. However, they doubted if the responsible gam-

ing programmes were sufficiently effective compared to

legislation and other compulsory measures.

The respondents were asked whether they thought that

Svenska Spel’s overall operations provide a positive or nega-


HÅllBaRHetsReDovisninG / Den

“ I stay away from the unregulated gaming companies”Hillevi Fällström, who has various occupations, has been a customer of Svenska Spel for many years. Bingo online, Texas Hold’em, scratch lotteries online and Vegas are some of her favourite games.

In what way have you noted that Svenska Spel handles its responsibility for Vegas?“in the case of vegas, i’ve noticed that restaurant owners position the machines so as to ensure they have a better oversight of them. on the other hand, they sometimes fail in terms of checking a player’s age. But i’ve frequently seen svenska spel doing random checks. that’s great! there are also signs telling you whom to turn to if you feel you’re losing control of your gaming, though i think compulsive players ignore them.”

Is responsible gaming an important feature when you choose your gaming operator?“Definitely, for me it’s decisive. i stay away from the unregulated companies, as i don’t know if they are dependable and whether they accept their respon-sibility. When i play at svenska spel, i know that everything is handled in the right way, that nothing is rigged and that i’ll get my money if i win. it’s simply safer.”

How do you feel Svenska Spel deals with its responsibility on svenskaspel.se?“i think that many poker players appreciate that they must indicate how much they plan to play for and how long even before the game begins. When the game starts, it’s often such fun that you simply don’t think of the time and money running way.”

S T A K E H O L D E R : C U S T O M E R

Read more about our stakeholder dialogues on page 101.


Social responsibilitySvenska Spel must work actively to minimise the negative social consequences of gaming operations. This endeavour has high priority in all operational decisions and leads to specific measures to develop a strong sense of responsible gaming.

venska Spel’s social responsibility is to pro-

vide gaming in a responsible and secure

manner and minimise the negative conse-

quences of the Company’s operations and

products. Svenska Spel’s mandate includes:

• prioritising social welfare in the development of games

and in the business as a whole,

• adopting a precautionary approach to new games and

markets,

• and having a responsible focus in the Company’s market-

ing that also reflects social commitment to ensure that it

is not perceived as over-assertive.

Svenska Spel’s responsible gaming policy describes the guide-

lines for responsible gaming. The policy states how the Com-

pany shall meet the above requirements. Svenska Spel’s aim is

to pursue responsible gaming programmes through effective,

responsible gaming efforts and thus distinguish itself from

other gaming companies on the Swedish market.

Responsibility is also highlighted in Svenska Spel’s corpo-

rate values, the internal guide that underlines the value of

accessible, considerate and committed employees.

Objectives of responsible gaming

Svenska Spel shall be perceived as a responsible company.

This means that people shall enjoy playing on Svenska Spel’s

games. They shall perceive that Svenska Spel is reliable and

secure, offering them the means to maintain control of their

gaming.

Responsible gaming strategies

• Svenska Spel shall aim at identifying and producing a

net social value that exceeds the costs arised by the

Company’s operations.

• Responsible gaming shall be integrated with the business

and have a distinct and relevant control system.

• Make responsible gaming part of the gaming experience.

• Increase public awareness of Svenska Spel’s mandate and

responsibility.

Responsibility in developing games

The precautionary principle is applied in the development

of new games and in the composition of the overall gaming

offering. The principle entails, for example, that Svenska Spel

does not develop games that are considered risky unless

such games are already available in the market.

S

Help Linesvenska spel marks all its coupons and lottery tickets with the telephone number that offers professional advice and assistance concerning gambling addiction or gaming problems. the number to the Help line is also displayed at all gaming venues.

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Svenska Spel uses the GAM-GaRD tool, which was devel-

oped by researchers and is compulsory in the product devel-

opment process. This tool is used to identify risk components

in a game and to classify and document each product. Games

with higher risk are altered or provided with enhanced con-

sumer protection and/or preventive tools.

Responsible gaming in all channels

Svenska Spel works with responsible gaming programmes

at the overall level and with measures focused on and cus-

tomised for the various sales channels. Examples of this

approach include the outreach dialogues that staff at Casino

Cosmopol have with their guests, and the specific require-

ments that Internet poker players must meet before they can

start playing, as well as the identity requirements imposed

by retailers and business partners.

Responsible gaming – Internet

Svenska Spel utilises the Playscan™ tool on svenskaspel.se,

which draws the attention of the players to potentially risky

changes in behaviour in their gaming. It offers recommen-

dations and tools – such as a gaming budget and time limits

– which can help players to change their behaviour and

maintain their gaming in a sound way. By December 2011,

53,844 customers had activated Playscan™, an increase of

6,800 people compared with 2010.

Responsible gaming – Casino Cosmopol

If they experience their gaming as a problem, Casino Cosmopol’s

guests can sign a voluntary agreement to limit their casino

visits to a maximum of eight per month, or request to be

banned completely for at least six months. These agree-

ments can be signed remotely or on the casino premises.

During 2011, 2,350 players (2,282) chose to sign voluntary

agreements or to be banned from playing at any of Casino

Cosmopol’s casinos. At year-end 2011, 4,149 people had

active agreements.

During 2011, 4,151 (3,923) outreach dialogues were held with

guests who showed signs of unhealthy gaming or belonged

to the 20–24 age group, a group with an increasing share of

gambling problems.

csR RePoRt / social ResPonsiBility anD ResPonsiBle GaminG

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12

345

Risk assessment identify risk using the Gam-GaRD tool

Development of measures if the product is considered to carry a high risk of problem gaming (red level according to the GamGaRD tool), the following areas are to be handled:

a. Market impact – is the product already on the market, is the market share considerable, is the development involving problem gaming and gambling addiction, how many of the existing customers are addicted to gaming?

b. Marketing restrictions – if the proportion of gambling addiction for existing games is considered to be high, restrictions beyond svenska spel’s general marketing guidelines are to be applied?

c. Responsible gaming tools – tools that enable customers to control their gaming will be developed.

Reviews external experts analyse, approve or disapprove the launch.

Launch the product is launched with responsible gaming tools.

Evaluation annual evaluation of the product in which such features as gambling addiction/players at risk are followed up.

Extra caution in high–risk gaming svenska spel’s products are always subjected to a risk assessment before being developed. the process is more extensive in the case of games with a high risk of problem gaming or gambling addiction.


“Svenska Spel could provide more information” The National Institute of Public Health receives an annual grant of SEK 28 million for developing programmes to reduce the negative effects of gaming. Marie Risbeck, acting head of the Drug Prevention and Gaming department, is responsible for coordinating efforts that include dialogues with licensed gaming companies in Sweden.

How big a problem is gaming?“it’s generally said that 2% of the population have gambling problems, while 98% are happy players. But that is not the whole truth. Firstly, the entire population does not gamble. secondly, an additional 5% show a risk of developing a gaming problem and are already aware of some negative consequences of their gaming. We’ve also noted in our regular surveys that there is a redistribution within these 2%, even if the overall percentage level remains the same. some overcome their problems, while others develop problems. However, once you’ve had a problem, there is a major risk of recurrence.”

How do you think that Svenska Spel handles its responsibility?“svenska spel works admirably in this area. they are very conscious and have integrated the social responsibility. they are also pioneers in

programmes involving age limits, guidelines and other measures. But they could improve their information on the relation between a certain share of their customers that provide a certain share of their sales. this is crucial information. they could also improve their information to their customers, for example clarify what it actually costs when you press a button on a gaming machine.” What risks do you see in the future?“increasing gaming problems among young men. currently almost 10% of men between 18 and 24 have a problem with gaming for money. since the access has increased, and fast games with a short intervall between staking and winning are in demand, i see a risk of more prob-lem gaming. as a result, one must be very careful when developing new games. also, one must work more effectively with targeted efforts aimed at young people, such as setting up gaming-free zones in places frequented by youths, such as schools and sport arenas.”

S T A K E H O L D E R : T H E N A T I O N A L I N S T I T U T E O F P U B L I C H E A L T H

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A new guest registration and incident-management

system was procured, in addition to more effective camera

surveillance of casino operations.

Responsible gaming – vegas

Svenska Spel makes efforts in order to strengthen its respon-

sibility for Vegas in making an agreement to purchase

responsible gaming tools. These tools will be available via

the Spelkortet loyalty card and enable the customers to set

volontary gaming limits in terms of time and money spent,

as well as making it possible to ban themselves from Vegas

gaming. The test will commence at the end of 2012 and the

responsible gaming tools are estimated to be available for all

Vegas customers in summer 2013.

By means of test purchases, Svenska Spel continually

ensures that the age limit is observed. In 2011, 2,473 test

purchases were completed. The number of approved test

purchases increased in comparison with 2010. The business

area also trained some 2,000 business partners in a new

responsible gaming training programme.

Responsible Gaming – Retailers

During 2011, customer security at retailers was enhanced

with the introduction of identity controls for payouts over

SEK 1,000. For winnings of SEK 20,000 or more, the retailer

terminal is blocked and the winner must directly contact

Svenska Spel before collecting the winning.

By using test purchases, Svenska Spel ensures that the age

limited is observed at retailers. 84% of the retailers were

approved in test purchases. ID control became a new routine

for lottery retailers just over a year ago, which is why their

results are lower. An average of 73% of all retailers were

approved in test purchases, as shown in the table on page 110.

Training in responsible gaming

Svenska Spel continuously trains employees, retailers and

business partners in responsible gaming. All new retailers

undergo responsible gaming training that, among other things,

includes information on the risks of gaming, available of

responsible gaming tools and the importance of age controls.

2011 Svenska Spel implemented a new responsible gam-

ing training for managers. The purpose was to offer manag-

ers deeper insight into Svenska Spel’s responsible gaming

programmes, thereby improving the integration of responsible

gaming into the company’s entire operations.

Marketing

Svenska Spel has its own marketing guidelines, but also fol-

lows the guidelines from SPER (Ethical council of the Gaming

Industry) and the standard set by European Lotteries. Guide-

lines state that marketing must be responsible and minimise

the risk of excessive gaming. It must not be perceived as too

assertive. Read more about Svenska Spel’s view on responsible

marketing in the interview with Annika Ferm on page 107.

In December 2011, the Government extended Svenska

Spel’s gaming licences, and included in the documents the

age limits and marketing restrictions for the various games.

Security and risk management

Svenska Spel seeks to discover and prevent unethical behav-

iour, both internally and externally. The Company is explicit

that its operations must not be used for money laundering

or other criminal activities. The development of competitive

products and distribution channels with integrated responsible

gaming and gaming security is thus an important part of the

business.

Svenska Spel’s mandate includes:

• Observing consumer interest as a reliable alternative to

illegal gaming operations.

• Taking due consideration of the risk of fraud and illegal

gaming.

• Maximal security in gaming.

During 2011, Svenska Spel conducted its first Group security

conference. Among other things, the aim was to provide a

better overview of the Group’s overall security programmes,

identify future challenges and competency requirements,

and create the conditions for the development of the Group’s

security activities.

Incidents

In November 2011, following a decision of the public prose-

cutor, eight people were arrested and detained on suspicion

of gross embezzlement. Seven of those detained were

employees at Casino Cosmopol in Gothenburg.

csR RePoRt / social ResPonsiBility anD ResPonsiBle GaminG

>>


Annika Ferm took up her position as Communication Manager at Svenska Spel during 2011 and was also appointed Chairman of the Ethical Council of the Gaming Industry (SPER). She emphasizes the fact that Svenska Spel’s mandate includes responsibility and that stakeholders expect this.

What does responsible marketing imply for Svenska Spel? “our mandate is based on social security considerations, namely, that we take a responsible approach in our relations with customers and other stakeholders. an overall principle is that our marketing must not be perceived too assertive. and, needless to say, we don’t focus on young people. moderation is a key component in our advertising, since we wish to encourage customers to play in a healthy way so that they experience the thrill of gaming while avoiding that gaming becomes a problem.”

Can you mention some concrete examples of how you assume responsibility? “We don’t do any direct advertising to customer card holders who may be in a risk zone for problem gaming to judge from their gaming behaviour. also, the chance of winning must not be exaggerated. We are also much more restrictive in our marketing of games with a higher risk of causing problems.”

How do you ensure that guidelines are observed by everybody?“We have strict policies and guidelines in this area. all employees con-cerned are trained and must observe the guidelines – i.e. our own and those of sPeR. if there is any doubt, employees are compelled to seek advice from our csR unit. in order to ensure that we will achieve our goals we will also train the advertising agencies we cooperate with.”

During 2011, the gaming industry increased its advertising spend by about seK 149 million to some seK 1,330 million.

compared with 2010, svenska spel’s gross advertising spend rose by about seK 19 million to a total of about seK 299 million.

since 2004, svenska spel’s share of the total media spend (share of voice) in the known gaming market has decreased from 46% to 22%.

source: svenska spel’s market analysis unit, based on siFo market Reseach advertising ratings.

Share of voice 2011Media spend in the Swedish market

Others 3%

Svenska Spel 22%

ATG Horse racing 9%

NGOs 9%

Foreign gaming companies 49%

PostkodLotteriet 8%

Media spend Share of voice Trend 2007–2011

Annika Ferm, Communication Manager:

“Social security considerations are part of our mandate”

07

TSEK

1,600

1,400

1,200

1,000

800

600

400

200

008 09 10 11


HÅllBaRHetsReDovisninG / Den

“Development is one step ahead of legislation”Håkan Hallstedt is the Director General of the Swedish Gaming Board, the central supervisor of the Swedish gaming market. He believes that the dialogue with Svenska Spel functions well, but that gaming legislation needs to be updated and adjusted to fit reality.

How is your dialogue with Svenska Spel?“our dialogue with svenska spel takes place on many levels and it func-tions very well. our officials are in constant contact with svenska spel for many reasons and have regular briefing meetings. We frequently need to discuss the market status and svenska spel’s observations in respect to illegal gaming machines and technical developments.” How well do you think Svenska Spel fulfils its responsibility?“svenska spel has a difficult role. on one hand, it is supposed to make money. on the other hand, the company has a social responsibility

beyond that of other companies. this is a difficult trade-off, but i think that svenska spel, under the complex circumstances, takes their responsibility. However, they could improve the information about their contribution to society, for example their significance for the sports.”

How do you work to counteract illegal gaming machines? “We’re working intensely with this and have received a special grant from the Government of seK 8 million annually for this work. in particular, it is all about the control of illegal gaming machines, and training police and prosecutors in what is to be viewed as illegal gaming. Unfortunately, we have had protracted, ongoing legal proceedings in order to establish the origin of gaming, for example when a gaming machine is linked to a server abroad. the supreme court has now decided that such gaming machines are illegal. legislation must be adjusted to reality.”

S T A K E H O L D E R : T H E S W E D I S H G A M I N G B O A R D



The casino’s surveillance unit discovered irregularities and

observed the suspects over a period of time before calling

the police. No guests were harmed by the alleged crime.

A labour dispute arose in conjunction with the incident.

Money laundering

The risk of and attempts at money laundering arise in

contexts involving substantial cash flows, such as casinos.

How ever, the measures the casinos take are considered

effective, and the cooperation with the authorities concerned

has been effective.

In 2011, Casino Cosmopol reported 284 incidents (311)

to the Financial Police in accordance with the money laun-

dering law.

Illegal gaming machines

Svenska Spel continuously reports illegal gaming machines,

i.e. machines that do not belong to Svenska Spel. Reporting

is made to the authorities concerned, primarily the Swedish

Gaming Board. Svenska Spel conducts regular controls at

retailers and business partners and, when discovering ille-

gal gaming machines, terminates the contract if they are

not removed. In 2011, eight retailers (nine) were terminated

due to having illegal gaming machines in their venues.

Fraud

Svenska Spel shall counteract fraud and cooperates with

the police, banks and card companies in matters relating to

stolen or counterfeit credit cards at retailers, business partners

and on the Internet. During 2011, Svenska Spel adapted to

the card companies’ PCI certification – an extensive pro-

gramme aimed at increasing data security and which is a

prerequisite for handling card-based transactions. Svenska

Spel strengthened its fraud procedures in 2010 and the banks

improved their routines for card-based payments in 2011.

Therefore, fraud is no longer considered a major problem.

Gaming on credit

Controls are made when something indicates that gaming

on credit may occur at retailers or business partners. Where

there is enough evidence, the contract with the retailer or

business partner is immediately terminated. Contracts with

two retailers (one) were terminated in 2010 as they had

accepted gaming on credit.

“Development is one step ahead of legislation”

Swedish National Audit Office review social consideration

In March 2011, the Swedish National Audit Office decided to

conduct a review of the State’s role on the gaming market.

The review is to be finalised in May 2012. The purpose is to

examine the Government’s adjustment of current gaming

regulations and the organisation of the State undertakings,

so that Parliament’s goal of a sound and secure gaming

market can be reached in an effective way. A review is also

to be made concerning the Government’s control and

monotoring of Svenska Spel’s operations and its work to

ensure a safe and sound gaming market.

Activities and results, 2011

• Stage 2 of the responsible gaming training for managers

was implemented.

• Implementation of a new central system for Vegas VLTs,

permitting the introduction of responsible gaming tools.

• Test purchases at lottery agents were introduced to ensure

observance of the 18-year old age limit on buying and

collecting winnings on lottery tickets.

• Customer security in the payout of winnings was enhanced.

• Launch of a new version of PlayscanTM with a new potential

to monitor and analyse gaming behaviour.

• Launch of new responsible gaming training for Vegas

business partners.

Focus for 2012

• Increase stakeholders’ awareness of Svenska Spel’s sustain-

able development programmes.

• Testing the new responsible gaming tools for Vegas will

start in the end of 2012 and the responsible gaming tools

are supposed to be available for all Vegas customers in

summer 2013.

• Develop responsible gaming for mobile phones and

secure a presence in new, emerging digital platforms.

• Casino Cosmopol will focus on identifying and reporting

suspected cases of money laundering.

• Further integrate security programmes and risk manage-

ment with business operations.

• Training courses to raise the security awareness through-

out the organisation.

>>


svenska spel has worked with key indicators for responsible gaming since 2005. the indicators show the responsibilities of business partners, retailers and employees.

2011 2010 2009

Social responsibility

Players with problems, %1 1–2 1–2 1–2

Number of voluntary agreements with casino guests 2 2,350 2,282 2,098

Number of dialogues with casino guests about their gaming habits 4,151 3,923 3,546

Svenska Spel takes its responsibility for counteracting gambling addiction – is this correct? 3, % 37 42 33

Business partner and retailer responsibility

Certified retailers, % 82 78 74

Certified business partners, % 95 73 73

Test purchases 5,663 5,704 5,945

Approved test purchases, retailers % 73 86 80

Approved test purchases, business partners, % 85 80 81

Observation checks 4 — 1,959 1,950

Suspended as a result of test purchases 5 182 69 63

Employee responsibility6

Employees who think that Svenska Spel accepts its responsibility for counteracting gambling addiction, % 80 79 —

Aware of Svenska Spel’s responsible gaming, % 96 94 —

1. Information from Svenska Spel’s gaming survey. The purpose of the survey is to examine the adult population’s awareness of and attitudes to gaming and gaming behaviour. The sur-vey was conducted via a postal questionnaire to randomly selected Swedish residents between the age of 16 and 75 (address source: DAFA SPAR). The number of filled-in ques-tionnaires amounted to 5,131, which constitutes a represen-tative sample of the Swedish population. The gaming survey shows that gambling problems in recent years are at an unchanged level of 1–2%.

2. Casino guests who consider they have difficulty controlling their gaming are invited to sign an agreement of voluntary suspension or a limit of eight visits per month at all casinos. The period of suspension or restricted visits is no less than six months.

3. New key data for this year, Image Tracking

– Data input via Norstat’s web panel, with 3,000 respondents. Report compiles quarterly by Market Analysis Depart-ment.

– Target group comprises all Swedes aged 16–75 years.

4. In previous years, the Vegas business area applied two methods for age control: observation controls and test purchases. As of 2011, only test purchases were conducted.

5. Includes business partners (restaurants and bingo halls) and retailers.

6. According to Svenska Spel’s employee survey 2011.

Key indicators for responsible gaming


Methods for facilitating responsible gaming

svenska spel is certified in line with the responsible gaming standards of the european lotteries (el) and the World lottery association. standards. the standards are based on a framework comprising ten areas.

area Criteria

1 Research • svenska spel shall help to raise social understanding of gambling problems.• svenska spel shall use research findings in the development and monitoring of responsible gaming measures,

business development and strategies.

2 Responsible gaming training for employees

• svenska spel shall have a responsible gaming message that is regularly communicated to employees, at least once a year.

• svenska spel shall have identified key activities in the field of responsible gaming that require special training to ensure consumer protection.

• svenska spel shall have a method to track levels of understanding for and implementation of responsible gaming.

3 Responsible gamingtraining for businesspartners and retailers

• svenska spel shall highlight responsible gaming for its business partners, and their obligations in terms of responsible gaming measures and requirements.

• svenska spel shall assist with adequate responsible gaming training.• svenska spel shall have an effective method to monitor and evaluate processes/performance of retailers and

business partners.

4 Gaming development • svenska spel shall use reliable tools to evaluate the social implications of the development of products, situations and organisations.

• svenska spel shall develop reliable tools for all games and channels whenever possible and shall behave responsibly by minimising, removing or modifying high-risk products.

5 Remote channels (Internet, gaming via mobile phone and Vegas)

• svenska spel shall have implemented the appropriate preventive measures listed in the european lotteries standard and shall ensure that the above is also observed in new development of these channels.

• svenska spel shall be able to justify reasons for any absence of measures, e.g. self-imposed suspension and Playscantm.

6 Advertising andmarketing

• svenska spel shall meet the requirements of national legislation, regulations and restrictions according to the european lotteries standard.

• svenska spel must have functioning systems to assure ethical marketing

7 Treatment referrals • in line with current directives, svenska spel shall refer players to recommended treatment coordinators (the swedish national institute of Public Health has referred to the Help line).

8 Responsible gamingmeasures for the protection of players and consumers

• svenska spel shall take initiatives for training, communicating to and informing players in the areas identified in the el standard (information on products, age limits, help and responsible gaming tools).

• svenska spel shall have an adequate policy and control to ensure effective implementation and periodic monitoring.

9 Stakeholder dialogues • svenska spel shall have regular formal and informal stakeholder dialogues and include them in its reporting.• svenska spel shall integrate the results of the stakeholder dialogues in strategic decision processes and feedback

mechanisms.

10 Reporting, measure-ment and certification

• svenska spel shall publish a formal report or series of communications that measure the requirements of the european lotteries Responsible Gaming standard.

The auditing company Deloitte AB conducted a verification of Svenska Spel’s responsible gaming programmes in 2011.


csR RePoRt / ResPonsiBility FoR emPloyees

Responsibility for employeesSvenska Spel has a strong brand as an employer. Maintaining the brand requires that corporate values are clearly communicated to all Svenska Spel employees.

S>>

… accessibleWe listen to our customers and each other and develop long-term relations. We make it easy for our customers to select us by deliv-ering the right games, at the right time and through the right channels. We contribute to the customer’s overall experience by com-bining presence, speed and personal service. We offer help when a colleague – irrespective of location or department – needs our compe-tence in solving a task.

… considerateWe care for our customers and work conscien-tiously to offer secure, readily accessed gaming enjoyment. We are proud of our mandate and put responsibility before profit maximisation. We treat our environment – both internally and externally – with openness, respect and trust.

… and committedWe love excitement and dreams, and are pas-sionate about delivering attractive games that offer enjoyment for everyone. to meet future competition and customer requirements, we ensure that innovative thinking, professionalism and effective implementation permeate all our work. We’re generous with our enthusiasm, endurance and driving power – we offer our customers and each other that little extra. We seek inspiring leadership that promotes motivation and personal development.

Our values. We at Svenska Spel are …

Value-based leadership

Svenska Spel’s leaders shall manage operations, people and

themselves. This involves inspiring and developing staff,

colleagues and Svenska Spel. To contribute to the Company’s

development, employees must be aware of what is expected

of them and be given the appropriate conditions and skills

to live up to expectations. Employees shall also receive clear

objectives and individual feedback on their performance.

Svenska Spel’s executives must also promote a working

environment that permits employees to be committed,

contribute ideas to the Company’s development and dare

to make decisions.

venska Spel seeks to establish a strong

common culture throughout the Group,

built on values, solid team spirit and a

distinct, modern leadership.

Revamped corporate values

Svenska Spel’s values are designed to contribute to a common

corporate culture that creates pride within the Company

and attracts new employees. The values were revamped

and simplified during 2011. The basic underlying message

is that we at Svenska Spel shall be accessible, considerate

and committed.


Therese Lindström is sales manager at svenskaspel.se and manages a team of eleven responsible for everything on the site in terms of activities and the customer interface. Their joint ambition is to offer gaming enjoyment in a responsible manner.

What does gaming enjoyment mean to you?“We always try to view gaming enjoyment from the customer’s perspec-tive. it’s not a matter of what is fun to produce but rather what is fun for our customers to experience. in many cases, gaming enjoyment involves accessibility and simplicity, that everything functions smoothly and that the customer feels safe and taken care of. everybody should be able to play and fully enjoy it. We also focus on developing social contact, such as chatting while gaming, and offering a forum through which customers can express their opinions.”

How do you assume responsibility in your everyday work? “Responsibility regarding online gaming, such as poker, is a key issue. Games are moving increasingly fast and the risks are a little higher compared with buying a lottery ticket in a store, for example. customers

appreciate the responsible gaming tools we offer on svenskaspel.se. they have, for example, good control of their stakes and the time they devote to the game.

Working with a campaign or activity involves specific considerations, and the question must be asked whether svenska spel should or should not launch a certain message. Responsibility is to us a matter of differen-tiation – it distinguishes us from our competitors. We who work in this department must understand the brand and what it represents. our customers shall feel safe with svenska spel.”

And the challenges?“the challenges relate to responsibility and gaming pleasure. We must keep the responsibility alive and focus keenly on it. the challenge is that there is no clear template regarding what it is to take responsibility; it varies according to customer and situation. one challenge relating to gaming enjoyment is the rapid technological development, which means that we must be at the forefront in order to offer gaming pleasure in future games and technologies.”

S T A K E H O L D E R : E M P L O Y E E

“ Everyone should be able to play with us and feel good about it“



csR RePoRt / ResPonsiBility FoR emPloyees

Diversity and equality

Work on diversity at Svenska Spel is to promote equal rights

and opportunities for men and women – regardless of sexual

preference, age, ethnic origin, religion or other creed. We be -

lieve that this creates a dynamic and pleasant work environ-

ment hallmarked by a respect for and embrace of everyone’s

differences. But also because it reflects the diversity of our

customers. Our fundamental belief is that diversity contrib-

utes to better business. Read more about our salary survey

and gender distribution for management on page 115.

Develop the employer brand

Svenska Spel has a strong employer brand. Maintaining the

brand requires understandable and distinct corporate values

and priorities. Thus Svenska Spel will attract professionals.

Svenska Spel has defined the following objectives for its

employees:

• The ESI/employee satisfaction index shall be at least 85 on

a scale of 100. The result 2011 was 86.

• The leadership index shall be at least 70 on a scale of 100.

The result 2011 was 73.

Employee survey

Each year, Svenska Spel conducts a major employee survey

that offers employees the opportunity to express their opin-

ions regarding the work environment and make suggestions

how it could be improved. In addition, in 2011 a number of

smaller surveys were made in order to provide operations

with faster feedback on the action plans implemented.


• Introduction of a revamped vision and corporate values.

• As part of the employee dialogues, goals were introduced

at the employee level.

• Roles and responsibility were defined.

• The executive development and leadership training pro-

grammes were completed.

• The planning schedule for casino employees was made

more effective.

Focus for 2012

• Implementation of the corporate values.

• Development of management by objectives in the organi-

sation.

• Focus on executive development, including a manage-

ment audit of the top 50 executives.

• Highlight career paths and develop the ability to identify

talents in the company.

• Increase Svenska Spel’s attractiveness as a an employer.

• Focus on the “Everyday Health” programme through, for

example, new cooperation with the corporate health unit,

management support and targeted activities.


Data on Svenska Spel’s employees

Other dataFulltime, part-time and temporary employees are entitled to the same benefits. svenska spel does not accept any form of infringement of personal integrity, favouritism, discrimination or bullying. no such cases have been brought to the attention of management in 2011. since october 2009, salaries at svenska spel have followed a policy based on governmental guidelines. salaries are individual and differen-tiated. salary and salary development is based on the kind of work, competency and performance. one labour-law dispute arose during 2011, see page 109. svenska spel operates on a national basis and in 2011 the risk of infringement of human rights was esteemed to be low. in 2011, 286 employees (255) in the Parent company took advantage of the keep-fit contribution. in the subsidiaries, 582 (379) employees took up the offer. the number of work-related injuries 2011 in the Parent company was two (four), with 33 (51) accidents in subsidiaries.

Employees by region and form of employment at 31 December 2011

location extras

proba-tionary-

employees

Holiday-replace-

ments FulltimeReplace-

ments

Fixed-term

projekts Total

Visby 3 379 16 3 401

Sundbyberg 3 356 11 5 375

Rest of Sweden 45 45

Sundsvall 20 95 11 51 177

Malmö 4 20 211 15 71 321

Gothenburg 1 49 274 15 94 433

Stockholm 45 2 280 12 108 447

Total 25 120 2 1,640 80 332 2,199

Numbers of employees by location and form of employment at 31 December 2010

location extras

proba-tionary-

employees

Holiday-replace-

ments FulltimeReplace-

ments

Fixed- term

projekts Total

Visby 1 2 1 385 15 5 409

Sundbyberg 4 336 11 11 362

Rest of Sweden 2 42 1 1 46

Sundsvall 73 2 98 9 182

Malmö 92 32 232 5 361

Gothenburg 115 42 288 10 455

Stockholm 126 21 295 6 448

Total 407 105 1 1,676 57 17 2,263

Salary survey 2010, Parent Company

%Manage-

ment

Senior salaried

employees1

Intermediate salaried

employees

Junior salaried

employees

Proportion, men 64.4 72.1 67.3 38.9

Proportion, women 35.6 27.9 32.7 61.1

Share of salaries, men 65.5 71.7 66.0 38.3

Share of salaries, women 34.5 28.3 34.0 61.7

Difference, men 1.1 –0.4 –1.3 –0.6

Difference, women –1.1 0.4 1.3 0.6

1. Senior salaried employees, specialists and team leaders.

Salary survey 2011 Casino Cosmopol

%

Senior manage-

ment

Middle manage-

mentaverage

employeeJunior

employee

Proportion, men 66.7 57.1 57.1 47.9

Proportion, women 33.3 42.9 42.9 52.1

Share of salaries, men 67.4 58.0 57.0 48.2

Share of salaries, women 32.6 42.0 43.0 51.8

Difference, men 0.7 0.9 –0.1 0.3

Difference, women –0.7 –0.9 0.1 –0.3

Employee turnover

% 2011 2010

Parent Company 7 5

Subsidiaries 19 15

Group 14 11

Number of employees that left the Company during the year divided by the average number of employees.

Share of women in leading posts

% 2011 2010

Parent Company 34 33

Subsidiaries 47 49

Group 42 42

Percentage of employees with a trade union agreement

% 2011 2010

Percentage of employees with a collective agreement 100 100


csR RePoRt / economic ResPonsiBility

Economic responsibilityFor Svenska Spel, economic responsibility entails always integrating the Company’s responsibility in its commercial ventures. The ambition to be the customer’s first choice will ensure the company’s long-term profitability.

venska Spel strives to gives its customers

a sustainable experience. This means that

the Company offers games that customer’s

demand, while at the same time integrating

responsible gaming into its commercial

operations.

Corporate responsibility will be an increasingly significant

factor in the future when customers select companies for

their gaming. As a result, responsible gaming is a key feature

of Svenska Spel’s efforts to be the customer’s first choice.

Svenska Spel will continue to strengthen its brand by com-

municating these efforts in all areas of responsibility.

Svenska Spel is not required to maximise profit, thereby

offering good potential to invest resources in responsible

gaming while striving to attain a healthy gaming market.

With a focus on customers’ perspective, offering attractive

games, is essential for the long-term work on the Swedish

gaming market.

Strategies

In 2011, Svenska Spel focused and prioritised work based on

a number of strategies. Within the framework of the strate-

gies, these efforts clarify how commercial operations and

social responsibility are integrated. Read more about Svenska

Spel’s strategies on page 16.

There is a trend in the Swedish gaming market towards

fewer players playing for higher sums, a fact that Svenska

Spel would like to reverse. The Company’s development shall

be based on healthy gaming patterns and a sound gaming

market. This means that success is based on a broad cus-

tomer base – more people playing for moderate amounts.

Economic risks and possibilities

Svenska Spel works proactively in assessing risks that affect

the underlying conditions to compete and work long-term

on the Swedish gaming market.

A challenge for Svenska Spel is the ever-increasing adver-

tising spend by foreign-based Internet companies. Svenska

Spel’s share of the gaming advertising declined from 46%

in 2004 to 22% during 2011. This is despite the fact that the

Lotteries Act does not permit foreign-based gaming compa-

nies to advertise in Swedish media. Svenska Spel needs new

licences in order to compete on the same conditions and

offer the new, fast games demanded by the customers.

Social contribution

Svenska Spel also makes economical contributions to

purposes connected with the Company’s core business

operations.

Sponsorship

Svenska Spel has a long relationship with Swedish sports

that extends all the way back to 1934. The purpose of this

sponsor ship is to strengthen Swedish sports today and

tomorrow. The partnership with sports is a fruitful affair for

both parties: it strengthens Svenska Spel’s corporate brand

S

>>


“Svenska Spel should serve as a model” As a new member of Svenska Spel’s Board, Michael Thorén partici-pates actively in Board activities. He thinks that the Company works well in dealing with the trade-off between responsibility and profit.

How important is it that Svenska Spel works with responsibility issues? “it is very important that svenska spel deals with this issue. an explicit aim of state-owned companies is to serve as a model in terms of sustainability and responsibility. it is also very important for the corporate brand. as a gaming company, the issue of social and ethical responsibility is decisive if the company is to continue to be a credible alternative to unregulated gaming companies.”

How do you think Svenska Spel manages the balance between responsibility and profit? “this is a difficult trade-off and one that easily shifts in favour of one or the other, but i think that svenska spel manages it well. you must remember that svenska spel is a company that competes with other actors on the market. it is crucial that svenska spel is offered the possi-bility to compete under the same conditions as the competitors. as administrator, we want the company to generate value, it is important.”

What would you like to see more or less of in the future? “i think the company should serve as a raw model in everything it does – including sustainability and responsible gaming, but also regarding cost-efficiency and a business-like approach. the new ceo, lennart Käll, has an important job ahead of him.”

S T A K E H O L D E R : B O A R D M E M B E R

>>



and is an object for pride within the organisation. The social

welfare that Svenska Spel generates through its sponsoring is

in line with the expectations of the stakeholders.

Sponsorship covers the Swedish Sports confederation,

football, ice hockey, handball, f loor ball and bandy. Support

is provided both at the elite and national levels, as well as

to youth sports programmes.

Thanks to its sponsorship, Svenska Spel ensures that an

increasing number of children and youths can try their hand

at sports, while it also creates better conditions for a compet-

itive elite.

Svenska Spel also works with values in sports and partici-

pates in the programme aimed at stopping violence in the

arenas.

58% of the population think that Svenska Spel is a key

partner for Swedish sports.

Swedish Brain Foundation

Since 2008, Svenska Spel has cooperated with the Swedish

Brain Foundation. Over a period of five years, through 2012,

the Company pays a total of SEK 25 million to finance impor-

tant research in the area of gambling addiction.

Research council

Svenska Spel has established a research council in an effort

to increase insight into preventive programmes against

gambling problems. In spring 2011, and for the first time,

Svenska Spel’s research council provided funds for research

on gaming and prevention of gaming problems. Three

students were granted funds for their education and research

projects on youth gaming habits, supportive actions for

relatives to problem players, and genetics. In the autumn,

the research council arranged a meeting for researchers and

employees at Svenska Spel to discuss the current research

situation.

Self-help manual and Help line

During 2011, Svenska Spel continued to provide financial

assistance in the amount of SEK 3.8 million to the Help Line

and Self-Help programme, two projects that help people

with gaming problems, and which are run by the Spelinsti-

tutet (a responsible gaming organisation). Both projects were

scheduled for termination back in 2009 due to the lack of

official decisions regarding financing, but support from

Svenska Spel ensured that the programmes could continue

in 2010 and 2011.


• A preliminary study was made to estimate Svenska Spel’s

social results.

• The research council granted funds to three students.

• The research council arranged a seminar for researchers

and Svenska Spel’s employees.

• Svenska Spel signed an agreement with Swedish ice

hockey, which extends over 4+3 years and covers both

elite players and a broad range of ice hockey clubs.

Focus 2012

• Additional funds to be granted by the research council.

• Model for the estimation of Svenska Spel’s net social result.

• Research council follow-up of ongoing projects.

Sek million 2011 2010

a) Revenue 7,977 7,897

b) Operating expenses –1,673 –1,750

c) Remuneration of employees –1,011 –989

d) Payments to financiers2 — —

e) Payments to the State2 –4,766 –4,979

f ) Social investments3 –9 –5

Remaining in the Company 518 174

Economic value generated, according to med GRI 1

1. Indicator protocol EC1. Income statement according to IFRS on page 62.2. Svenska Spel is owned by the Swedish State and the Group’s funds available or dividend

payments is disposed of in the manner prescribed by the Government. 3. 2011 comprises the Swedish Brain Foundation and the Swedish Gaming Institute.

2010 only the Swedish Brain Foundation.

csR RePoRt / economic ResPonsiBility


Environmental responsibilitySvenska Spel consistently strives to improve its performance in the environmentalarea and works actively in the four areas in which it has identified its greatest envi-ronmental impact: business travel, materials/products, energy and goods transport.

venska Spel is a service company and thus

its impact on the environment is limited.

Also, the Company’s stakeholders have

not expressed any specific requirements

in this respect. Nevertheless, as a State-

owned company, Svenska Spel wishes

to reduce its environmental impact and be prominent in

this field.

The Company’s Code of Conduct encompasses Svenska

Spel’s environmental policy. Svenska Spel is an environmen-

tally responsible company. Svenska Spel promotes and con-

tributes to long-term sustainable social development by

reducing the environmental impact of operations. Svenska

Spel achieves this continually by improving its performance

and working proactively whenever possible.

Strategy and objectives

Svenska Spel is aware of its impact on the environment,

directly through the consumption of energy and other

resources used in day-to-day operations, and indirectly via

its suppliers.

Svenska Spel seeks to make a positive contribution to

the environment by promoting eco-products and via

co operative initiatives. Environmental consideration shall

take place in everyday operations, including planning,

investment decisions, purchases and working methods.

Being the market leader, Svenska Spel views environmen-

tal programmes as a key factor in the Company’s long-term,

sustainable development. The environment offers an oppor-

tunity for positive development and potential savings, finan-

cially as well as environmentally.

The overall objective is to transform Svenska Spel into a

climate smart company. In 2011, Svenska Spel’s environmen-

tal council, with representatives from the whole organisation,

reached a consensus on the goals for 2012–2014 for each

focus area:

• Business travel shall be reduced by 20% (domestic) and

by 10% (international) compared with 2010.

• Energy consumption will be reduced by 6% (kWh) com-

pared to 2010.

• Goods transport will not exceed the figure for 2010 during

the period.

• Svenska Spel will identify, measure and see the results of

optimising the amount of advertising materials.

During 2011, the Company – in cooperation with an external

party, Tricorona – conducted a climate calculation for the

four areas of operations. Among other things, the aim was to

re solve on a method of measure that will prove sustainable

in the long term and will make it easy to compare different

periods.

S

>>


csR RePoRt / enviRonmental ResPonsiBility

Four focus areas

As a result of an environmental survey of Svenska Spel, the

Company has identified the most significant environmental

impact and the inputs that make most difference. The

following four focus areas have been identified: business

travel, materials/products, energy and goods transport.

Business travel Offices in two locations and casinos in four

cities make business travel a necessity. However, business

travel is the factor underlying Svenska Spel’s carbon dioxide

emissions. Thus, Svenska Spel’s employees are encouraged

to use video and teleconferencing and to plan their meetings

so as to minimise travel.

Materials/products Svenska Spel is a major consumer of

paper in the form of gaming programmes, ticket rolls,

gaming coupons and so forth. Thus, a reduction in materials

consumption is a focus area.

Energy By means of consistent improvements and energy

saving measures, Svenska Spel attempts to reduce energy

consumption. Renewable energy has been introduced in all

premises since 2011.

Goods transport Each week Svenska Spel dispatches

gaming programmes, coupons, advertising materials and

ticket rolls to retailers nationwide. Transport can be opti-

mised by means of fewer delivery days and smaller paper

batches. Thanks to these measures, goods transport, that

used to be the major emissions item, has become a relatively

small share of Svenska Spel’s total emissions.

Environmental requirements on suppliers

A substantial portion of Svenska Spel’s environmental impact

derives from goods purchased by the Company. Therefore,

environmental requirements are imposed on all purchasing

processes. These comprise fundamental and general environ-

mental requirements, as well as specific and more comprehen-

sive environmental requirements for purchasing processes in

which a substantial environmental impact is identified, such

as freight transports, technology and food.

Activities and results in 2001

Svenska Spel works actively to minimise carbon dioxide

emissions. A number of activities were conducted during

the year:

• Review of Svenska Spel’s overall environmental goals, and

the formulation of goals for each focus area.

• Continuing work in communicating and anchoring key

indicators internally in order to increase commitment in

the organisation. 2011 monthly reports to managers were

introduced covering business travel by employees.

• Svenska Spel continues to train its employees in environ-

mental issues. The aim is to raise awareness of environ-

mental matters and how Svenska Spel can work with

them.

• Efforts to optimise goods transport by limiting materials

dispatches continued.

• Using its Eco Driving programme, Svenska Spel continues

to train employees who use cars in their work.

Responsibility for environmental programmes

environmental work at svenska spel is supervised and coordi-nated by the csR manager, who is assisted by an environmen-tal council, which is a forum for the company’s environmental issues, with, for example, responsibility for formulating the decision-making basis. the council consists of representatives from the whole organisation and meets once a month. all participants have undergone in-depth environmental training.


• Continued work to find energy-saving measures at Svenska

Spel’s premises. For example, Casino Cosmopol installs

LED lighting in its buildings. This extensive project, which

will continue over three years, is expected to have environ-

mental and economic benefits.

• Renewable energy was introduced in Casino Cosmopol’s

premises in Malmö and is thereby used in all Svenska Spel’s

properties.

• Screen savers introduced for Vegas VLTs provide annual

energy savings of some 15% of VLT energy consumption,

which Svenska Spel estimates to 1.3 million kWh and that

these savings will benefit business partners.

• A climate-impact survey calculation was conducted that

will form the basis for the new environmental goal.

• The number of video conferences increased. Svenska Spel

currently has 31 video monitors, four of which are at the

Company’s casinos. Efforts are continually made to encour-

age the use of them in order to decrease business travels.

Focus for 2012

During 2012, Svenska Spel will further develop, communicate

and ensure the implementation of the Company’s environ-

mental programme.

• A new climate-impact calculation will be made in 2012.

• Environmental requirements for suppliers will be in focus

in 2012 as Svenska Spel adjusts to the Swedish Public

Procurement Act.

• On the basis of the climate-impact calculation made in

2011, a new environmental goal will be set up and

anchored in the organisation.

• Continuing training of employees in environmental issues.

• Continuing communication and internal implementation

of key indicators in order to increase commitment in the

Group.

• Additional measures to optimise business travel will be

completed.

Material consumption, tons2011 2010

Coupons 380 456

Ticket rolls 353 396

Programmes 159 160

Lottery tickets 253 210

Packaging, lottery ticket shipments 10 12

Corrugated fibreboard 9 18

Office paper 14 12

Total 1,178 1,264

Use of material comprises more items than recorded above, but these cannot be reported due to shortcomings in data capture. The largest item not reported is advertising material that is estimated at about 200–300 tons annually.

Energy consumption, kWh2011 2010

Electricity consumption Visby/Sundbyberg 6,350,984 5,862,643

Electricity consumption Casino Cosmopol 9,469,383 9,644,236

Total electricity consumption 15,820,367 15,506,879

Whereof renewable electricity 15,353,226 13,439,624

District heating/cooling Visby/Sundbyberg 3,432,999 4,045,780

District heating/cooling Casino Cosmopol 3,903,000 4,610,700

Total district heating/cooling 7,335,999 8,656,480

Total energy consumption 23,156,366 24,163,359

Svenska Spel’s environ-mental initiatives in brief

CO2 emissions 2011

Air travel1 42%

Passenger car fuel3 15%

Transports, letters and packages 16%

Energy consumption2 27%

In 2011, Svenska Spel’s CO2 emissions totalled 1,943 tonnes.1) Changed calculation factor by supplier implies increase of 77 tonnes of CO2 compared with earlier method.2) Changed calculation factor by supplier implies increase of 58 tonnes of CO2 compared with earlier method.3) Calculated on the basis of standard fuel consumption.


csR RePoRt / GRi PRoFile

Comments on the CSR Report

Further information

Further information on Svenska Spel’s CSR Report is available

on svenskaspel.se.

The contact person for matters relating to Svenska Spel’s

overall CSR work is: Zenita Strandänger, Manager CSR,

+ 46 498 26 36 31, [email protected]

The contact person for matters relating to Svenska Spel’s CSR

Report is: Maria Schubert, Manager CSR, + 46 8 757 79 10,

[email protected]

GRI reportingThe GRI performance indicators are located under individual

sections with a matrix for relevance assessment. The indica-

tors have been classified on the basis of whether they have a

low or high impact on the criteria in relation to Svenska Spel’s

influence and control. Only those indicators that have a high

impact and high influence are specifically reported. As the

GRI performance indicators are not always relevant to Svenska

Spel, the Company reports its own levels for areas such as

responsible gaming.

The assessments have been made based on Svenska

Spel’s own estimates of the Company’s influence, control

and impact on society. Stakeholder risk evaluations have also

formed the basis for selection of relevant areas to report and

comment.

The indicators not deemed relevant for the business in

2011 are not included in the relevance matrix. Measurement

methods are explained under each individual indicator

where it is considered appropriate.

svenska spel has itself deemed that the 2011 csR Report fulfils the requirements imposed on csR reports at the c+ application level, based on the application levels drafted by the Global Reporting initiative. Deloitte aB has certified svenska spel’s 2011 csR Report and confirms that it fulfils application level c+. see the statement of certification on page 131.

Assurance of Svenska Spel’s CSR Report

Application level C C+ B B+ A A+

compulsory Own assessment

voluntary Third party statement

Reviewed by GRI

Rep

ort c

ertifi

ed b

y ex

tern

al p

arty

Rep

ort c

ertifi

ed b

y ex

tern

al p

arty

Rep

ort c

ertifi

ed b

y ex

tern

al p

arty


Svenska Spel’s GRI profile

page

Reported l partly reported ◗

not reported m

1. STRaTeGY anD analYSIS

1.1 Statement from the most senior decision maker of the organisation (CEO, chairperson, or equivalent senior position) concerning the relevance of sustainability to the organisation and its strategy.

4–5, 96 l

1.2 Description of key impacts, risks, and opportunities. 8, 16–24, 97–100 ◗

2. ORGanISaTIOnal pROFIle

2.1 Name of the organisation. Cover l

2.2 Primary brands, products, and/or services. 24–33, 36–47 l

2.3 Organisational structure, units, business areas, subsidiaries, and joint ventures. 14–15, 34–47, 74, 91 l

2.4 Location of organisation’s headquarters. 1, 7, 91, 126 l

2.5 Number of countries in which the organisation operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report.

11–13, 82, 115 l

2.6 Ownership structure and corporate form. 6, 11, 15, 48, 64, 68, 87, 118–119 l

2.7 Markets in which the organisation is active (including geographic breakdown, sectors served, and types of customers/beneficiaries).

3, 11–13, 18 l

2.8 Scale of the reporting organisation, including number of employees, net revenue, total capitalisation.

2, 20, 28–47, 58, 62–64, 75, 94, 115

l

2.9 Significant changes during the reporting period regarding size, structure, or ownership. 14–15, 75 l

2.10 Awards received in the reporting period. 2, 24, 39, 44, 59 l

3. RepORT paRaMeTeRS

Report profile

3.1 Reporting period. 1, 19, 95, l

3.2 Date of most recent previous report. 19, 95 l

3.3 Reporting cycle. 19, 95 l

3.4 Contact person for questions regarding the report or its contents. 122 l

Report scope and limit

3.5 Process for defining report content. 95, 97–101 l

3.6 Limit of the report. 95 l

3.7 State any specific limitations on the scope or boundary of the report. 95 l

3.8 Principles for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organisations.

19, 95 l

3.9 Data measurement techniques and the bases of calculations. 95, 110, 121 ◗

3.10 Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement.

121 l

3.11 Significant changes from previous reporting periods in the scope, limits, or measurement methods applied in the report.

110, 121 l

GRI content index

3.12 List of contents identifying the location of the standard disclosures in the report. 123–129 l

assurance

3.13 Policy and current practice with regard to seeking external assurance for the report. 122, 131–132 l

4. GOveRnanCe, COMMITMenTS anD enGaGeMenT

Governance

4.1 Governance structure of the organisation. 48–53 l

4.2 Indicate whether the Chair of the highest governance body is also an executive officer. 54, 56 l

4.3 For organisations that have a unitary board structure, state the number of members of the highest governance body that are independent and/or non-executive members.

49–50, 54–55 l

4.4 Potential for shareholders and employees to provide recommendations or direction to the highest governance body.

48–50, 54 l

Standard indicators

>>


Contd. Standard indicators page


not reported m

4.5 Linkage between remuneration of the Board, senior executives and executives (including severance agreements), and the organisation’s performance (including social and environmental performance).

48, 75–78 ◗

4.6 Routines and processes in place for the highest governance body to ensure conflicts of interest are avoided. 48–53 l

4.7 Routines and processes for determining what qualifications and expertise that Board members should possess in order to govern the organisation’s strategy in financial, environmental and social issues.

49 l

4.8 Internally dawn up business missions or fundamental values, code of conduct and principles for financial, environmental and social behaviour, and how these have been introduced into the organisation.

3–5, 8–9, 16–27, 33, 38–44, 96–100, 103–104,

106–107, 109–112, 114–116, 118–121

l

4.9 Routines and processes in the organisation’s Board to check how the organisation has noted and managed financial, environmental and social issues (and the relevant related risks and possibilities) and which internationally agreed standards, code of conduct and principles the organisation has affiliated to and how these are observed.

48, 51–53 l

4.10 Processes for evaluating the highest governance body’s own performance, particularly with respect to economic, environmental, and social performance.

m

Commitments to external initiatives

4.11 Explanation of whether and how the precautionary principle is addressed by the organisation. 8, 103–104, glossary l

4.12 Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organisation has affiliated or supports.

24, 48, 53, 96, 104, 106–107, 111, 125

l

4.13 Memberships in associations (such as industry associations) and/or national/international advocacy organisations.

24, 53, 96, 106–107, 125 ◗

Communication with stakeholders

4.14 List of stakeholder groups with whom the organisation has contact. 101 l

4.15 Principles for identification and selection of stakeholders. 101 l

4.16 Approaches to communication with stakeholder, including frequency of communication by type and by stakeholder group.

101 l

4.17 Key areas and issues highlighted via communication with stakeholders and how the organisation has managed these areas and issues, including how they have influenced the organisation’s reporting.

101 l

CSR governancecsR governance in the area of is presented on page 95. the description of strategy and policy in this area is on page 100. the Finance & secu-rity staff unit is responsible for developing over-all policies, strategies, processes, tools and key indicators pertaining to svenska spel’s security activities. the operational areas are responsible for the control and monitoring of individual operations.

High impact – high influencesvenska spel has methods and procedures for minimising physical security risks associated with casino operations. Procedures are also reported here for minimising the negative social impact that the operation has in the form of gambling addiction [so1]. Procedures for illegal gaming machines, gaming on credit, fraud and money laundering are also reported [so1]. no substantial fines related to breach of prevailing legislation and regulations have been paid [so8].

page


not reported m

aSpeCT: SOCIeTY

SO1 Nature, scope, and effectiveness of any programmes and practices that assess and manage the impacts of operations on communities, including entering, operating, and exiting.

103–104, 106–107, 109–111

l

aSpeCT: CORRUpTIOn

SO2 Percentage and total number of business units analysed for risks related to corruption. m

SO3 Percentage of employees trained in organisation’s anti-corruption policies and procedures. m

SO4 Actions taken in response to incidents of corruption. 7, 38, 44, 109 l

Relevance assessment

LOW

LOW HIGH

HIGH

INFLUENCEAND CONTROL

IMPACT

SO1SO4SO5SO8

SO2SO3SO7

SO6

Business ethics and security

Performance indicators for business ethics and security



Contd. Business ethics and security page


not reported m

aSpeCT: pUBlIC pOlICY

SO5 Public policy positions and participation in public policy development and lobbying. m

SO6 ADD Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country. m

aSpeCT: anTI-COMpeTITIve BeHavIOUR

SO7 ADD ADD Total number of legal actions for anti-competitive behaviour, anti-trust, and monopoly practices and their outcomes.

7, 43, 44 l

aSpeCT: COMplIanCe

SO8 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations.

7, 43, 44, 125 l

>>

page


not reported m

aSpeCT: CUSTOMeR HealTH anD SaFeTY

PR1 Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures.

103–104, 106–107, 109, 111, 125

l

PR2 ADD Total number of incidents of non-compliance with regulations and voluntary codes concerning health andsafety impacts of products and services during their life cycle. Information must be categorised on the basis of the effects of non-compliance.

38, 106, 110 l

aSpeCT: pRODUCTS anD SeRvICeS laBellInG

PR3 Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements.

m

PR4 ADD Total number of incidents of non-compliance with regulations and voluntary codes concerning health andsafety impacts of products and services during their life cycle. Information must be categorised on the basis of the effects of non-compliance.

m

PR5 ADD Practices related to customer satisfaction, including results of customer satisfaction surveys. m

aSpeCT: MaRkeT COMMUnICaTIOn

PR6 Programmes for compliance with legislation, standards, and voluntary codes related to market communications, including advertising, promotion, and sponsorship.

24, 96, 106–107, 111 l

PR7 ADD Total number of incidents of non-compliance with regulations and voluntary codes concerning marketingcommunications, including advertising, promotion, and sponsorship. Information must be categorised on the basis of the effects of non-compliance.

125 l

aSpeCT: CUSTOMeR pRIvaCY

PR8 ADD Total number of substantiated complaints regarding breaches of customer privacy and loss of customer data. m

aSpeCT: COMplIanCe

PR9 Value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services.

m

CSR governancecsR governance in the area of social responsibil-ity is covered on page 95. a description of strat-egy and policy in this area is on page 103. the information & csR staff unit is responsible for developing overall policies, strategies, processes, tools and key indicators pertaining to svenska spel’s social responsibility. the operational areas are responsible for the control and monitoring of individual operations.

Social responsibility and responsible gamingHigh impact – high influencein 2009, Gam-GaRD was introduced as a compul-sory part of the product development process. Gam-GaRD is a licence-based responsible gaming tool that helps product developers identify risk components in a game. svenska spel has a respon-sibility to prevent money laundering, fraud, under-age gaming and prevent the negative social con-sequences of gaming. this is reported via indicators under the section business ethics and security as well as social responsibility [PR2]. svenska spel had no cases in the market court in 2011. svenska spel has adopted its own ethical guidelines as well as those of national and international forums and marketing organisations [PR6].


LOW

LOW HIGH

HIGH


IMPACT

PR1PR2PR6PR7

PR4PR5PR8

PR3

PR9

Performance indicators for product responsibility


CSR governancecsR governance in the area of responsibility for employees is covered on page 95. Description of strategy and policy in this area is on page 112. the Human Resources staff unit is responsible for developing overall policies, strategies, processes, tools and key indicators pertaining to svenska spel’s employee responsibility.

High impact – high influencesvenska spel has six operating locations: the head office in visby on Gotland,and the company has an office in sundbyberg and the four casino locations in stockholm, Gothenburg, malmö and sundsvall [la1–2]. all employees in the Group are covered by

Responsibility for employeescollective agreements [la4, 9]. Working environ-ment processes are focused primarily on prevent-ing problems associated with the high proportion of employees who encounter players with gaming problems. individual analyses and work with stress processes are implemented as needed. continuous cooperation with the swedish social insurance office (Försäkringskassan) at individual level [la7–8]. the composition of the Board and executive manage-ment from a diversity perspective is reported in the annual Report [la13]. svenska spel performs annual salary mapping by region, services svenska spel performs annual salary mapping by region, services and gender [la14].

page


not reported m

aSpeCT: eMplOYMenT

LA1 Total workforce by employment type, employment contract, and region. 115 l

LA2 Total number and rate of employee turnover by age group, gender, and region. 115 ◗

LA3 ADD Benefits provided to full-time employees that are not provided to temporary or part-time employees. Information must be provided for all major operations by major operations.

115 l

aSpeCT: laBOUR/ManaGeMenT RelaTIOnS

LA4 Percentage of employees covered by collective agreements. 115, 126 l

LA5 Minimum notice period(s) regarding significant operational changes, including whether it is specified in collective agreements.

m

aSpeCT: OCCUpaTIOnal HealTH anD SaFeTY

LA6 ADD Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programmes.

m

LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by region. 20, 115 ◗

LA8 Education, training, counselling, prevention, and risk-control programmes in place to assist workforce members, their families, or community members regarding serious diseases.

m

LA9 ADD Health and safety topics covered in formal agreements with trade unions. m

aSpeCT: TRaInInG anD eDUCaTIOn

LA10 Average hours of training per year per employee, distributed by employee category. m

LA11 ADD Programmes for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings.

m

LA12 ADD Percentage of employees receiving regular performance and career development. m

aSpeCT: DIveRSITY anD eQUal OppORTUnITY

LA13 Composition of governance bodies and allocation of other employees by gender, age group, minority group membership, and other indicators of diversity

54–57, 75, 115 ◗

LA14 Percentage pay difference between men and women by employee category. 115 l

aSpeCT: nOn-DISCRIMInaTIOn

HR4 Total number of incidents of discrimination and actions taken. 115 l

aSpeCT: FReeDOM OF aSSOCIaTIOn anD COlleCTIve BaRGaInInG

HR5 Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights.

m


LOW

LOW HIGH

HIGH


IMPACT

LA1-2LA4LA7-8LA13-14

LA3LA5LA6LA9LA11

HR5-9

PR9

Performance indicators for terms of employment and working conditions



>>

CSR governancecsR governance in the area of economic respon-sibility is covered on page 95. the description of strategy and policy in this area is presented on page 116. the Finance & security staff unit is responsible for developing overall policies, strat-egies, processes, tools and key indicators pertain-ing to svenska spel’s economic responsibility.

Economic responsibilityHigh impact – high influencesvenska spel reports revenue, costs and social investments. social investments are svenska spel’s direct sponsorship investments. svenska spel also supports the swedish Brain Foundation’s research into gambling addiction and is establish-ing a research council to support research into preventative measures for gaming problems. [ec1 and ec8]. the annual Report presents infor-mation on provisions for pensions [ec3].


LOW

LOW HIGH

HIGH


IMAPCT

EC1EC3EC8

EC7EC5EC9

EC2EC6EC4

HR1HR2HR3

Contd. Terms of employment and working conditions page


not reported m

aSpeCT: CHIlD laBOUR

HR6 Operations identified as having significant risk for incidents of child labour, and measures taken to contribute to the elimination of child labour.

m

aSpeCT: FORCeD anD COMpUlSORY laBOUR

HR7 Operations identified as having significant risk for incidents of forced or compulsory labour, and measures to contribute to the elimination of forced or compulsory labour.

m

aSpeCT: SeCURITY pRaCTICeS

HR8 ADD Percentage of security personnel trained in the organisation’s policies or procedures concerning aspects of human rights that are relevant to operations.

m

aSpeCT: InDIGenOUS RIGHTS

HR9 ADD Total number of incidents of violations involving rights of indigenous people and action. m

page


not reported m

aSpeCT: eCOnOMIC peRFORManCe

EC1 Economic value generated and distributed, including revenue, operating costs, employee compensation, dona-tions and other social investments, retained earnings, and payments to capital providers and the public sector.

118 l

EC2 Financial impact and other risks and opportunities for the organisation’s activities due to climate change. m

EC3 Scope of the organisation’s defined benefit plan obligations. 63–64, 75, 77–78, 88 l

EC4 Significant financial assistance received from public sector. 73 l

aSpeCT: MaRkeT pReSenCe

EC5 ADD Scale for standard entry-level page compared with local minimum wage at significant operating locations. m

EC6 Policy, practices, and proportion of spending on locally based suppliers at significant operating locations. m

EC7 Procedures for local hiring and proportion of senior executives hired from the local community in which the organisation pursues significant operations.

m

aSpeCT: InDIReCT eCOnOMIC IMpaCTS

EC8 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro-bono engagement.

19, 96, 111, 118, 127 l

EC9 ADD Understanding and describing significant indirect economic impacts, including the extent of impacts. m

Economic performance indicators


CSR governancecsR governance in the area environmental responsibility is presented on page 95. Descrip-tion of strategy and policy in this operational area is on page 119. the communications & csR staff unit is responsible for developing overall policies, strategies, processes, tools and key indicators pertaining to svenska spel’s environ-mental responsibility.

Environmental responsibility High impact – high influencesvenska spel is a major consumer of paper in ticket rolls, lottery tickets and office material. Reducing environmental consumption is a focus area in svenska spel’s environmental process [en1]. energy consumption is largely office elec-tricity, heating and the operation of computer halls and gaming in casinos [en4]. Goods and service transport represents a major part of svenska spel’s carbon emissions through trans-port between stockholm and visby, as well as numerous overseas trips to suppliers and stake-holders in europe, Us, and canada and india [en16-17], [en18], [en29].


LOW

LOW HIGH

HIGH


IMPACT

EN1EN4EN16-17EN18EN29

EN7EN23EN28EN30

EN2EN8EN9

EN10

EN5EN6

EN26EN27

page


not reported m

aSpeCT: MaTeRIalS

EN1 Materials used, by weight and volume. 121 l

EN2 Recycled material as percentage of materials consumption. m

aSpeCT: eneRGY

EN3 Direct energy consumption by primary energy source. m

EN4 Indirect energy consumption by primary source. 121 l

EN5 ADD Energy saved due to conservation and efficiency improvements. m

EN6 ADD Initiatives to provide energy-efficient or renewable energy-based products and services, and reductions in energy requirements as a result of these initiatives.

m

EN7 ADD Initiatives to reduce indirect energy consumption and reductions achieved. m

Environmental indicators


page


not reported m

aSpeCT: InveSTMenT anD pROCUReMenT pRaCTICeS

HR1 Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screening.

m

HR2 Percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken.

m

HR3 ADD Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained.

m

Performance indicators for human rights


Contd. economic responsibility page


not reported m

aSpeCT: WaTeR

EN8 Total water withdrawal by source. m

EN9 ADD Water sources significantly affected by withdrawal of water. m

EN10 ADD Percentage and total volume of water recycled and reused. m

aSpeCT: BIODIveRSITY

EN11 Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas.

m

EN12 Description of significant impact of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas.

m

EN13 ADD Habitats protected or restored. m

EN14 ADD Strategies, current measures and future plans for handling impacts on biodiversity. m

EN15 ADD Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk.

m

aSpeCT: eMISSIOnS, eFFlUenTS anD WaSTe

EN16 Total direct and indirect greenhouse gas emissions by weight. 121 l

EN17 Other relevant indirect emissions of greenhouse gases by weight. 121 l

EN18 ADD ADD Initiatives to reduce greenhouse gas emissions and reductions achieved. 119–121 ◗

EN19 Emissions of ozone-depleting substances by weight. m

EN20 NOx, SOx, and other significant air emissions by type and weight. m

EN21 Total water discharge by quality and destination. m

EN22 Total weight of waste by type and disposal method. m

EN23 Total number and volume of significant spills. m

EN24 ADD Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally.

m

EN25 ADD Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organisation’s discharges of water and runoff.

m

aSpeCT: pRODUCTS anD SeRvICeS

EN26 Initiatives to mitigate environmental impact of products and services, and extent of impact mitigation. 119–121 ◗

EN27 Percentage of products sold and their packaging materials reclaimed by category. m

aSpeCT: COMplIanCe

EN28 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations.

m

aSpeCT: TRanSpORT

EN29 ADD Significant environmental impact of transporting products and other goods and materials used for the organisation’s operations, including work travel/business travel by employees.

121 l

aSpeCT: OveRall

EN30 ADD Total environmental protection expenditure and investment by type. m


Signatures of the Board of Directors

csR RePoRt / siGnatURes oF tHe BoaRD oF DiRectoRs

The CSR report for 2011, which is presented on pages 95–129, has been approved for publication by the Board.

Visby, 16 March, 2011

Anitra Steen


Hans Bergenheim Björn Fries Catarina Fritz


Eva-Britt Gustafsson Lena Jönsson Michael Thorén


Christer Åberg

Board member

Anders Andersson Jenny Bengtsson Martina Ravn

Board member/ Board member/ Board member/

Employee representative Employee representative Employee representative

Lennart Käll

President and CEO


Auditor’s Combined Assurance ReportCombined Assurance Report on

AB Svenska Spel’s CSR Report

To the readers of Svenska Spel’s CSR Report

Introduction

We have been engaged by the Board of Directors of

AB Svenska Spel to perform an examination on Svenska

Spel’s CSR Report for the year 2011 as included on pages

95–129 of the Annual Report. The Board of Directors and

the Executive Management are responsible for ongoing

activities regarding the environment, health & safety, quality,

social responsibility and sustainable development, and for

the preparation and presentation of the CSR Report in

accordance with the applicable criteria. Our responsibility

is to express a conclusion on the CSR Report based on our

examination.

The Scope of the Examination

We have performed the assurance engagement in accord-

ance with RevR 6 Assurance of Sustainability Reports issued

by Far. The objective of an audit is to obtain reasonable

assurance that the information in the CSR Report is free of

material misstatements. An audit includes examining, on a

test basis, evidence supporting the quantitative and qualita-

tive information in the CSR Report. A review is mainly limited

to making inquiries of personnel responsible for sustainability

issues, and applying analytical and other review procedures.

Hence, the conclusion based on our review procedures does

not comprise the same level of assurance as the conclusion

of our audit. Since this assurance engagement is combined,

our conclusions regarding the audit and the review will be

presented in separate sections.

Our assurance engagement includes examination of the

following areas, with the purpose of either providing reason-

able assurance (hereafter referred to as audit) or limited

assurance (hereafter referred to as review).

1. Our review has included pages 95-129 in the Annual

Report.

2. Our audit is limited to the following information:

a. Social responsibility – The table “Key indicators for respon-

sible gaming” on page 110.

Our assurance, reasonable or limited, does not comprise

the assumptions used by the Company or whether or

not it is possible for the Company to reach certain future

targets described in the report (e.g. goals, expectations

and ambitions).

The criteria on which our review are based are the parts

of the Sustainability Reporting Guidelines G3, published by

The Global Reporting Initiative (GRI), which are applicable to

the CSR Report, as well as the accounting and calculation

principles that the Company has developed. We consider

these criteria suitable for the preparation of the CSR Report.

Review Procedures

The main procedures of our review have included the

following:

a. an update of our knowledge and understanding of

AB Svenska Spel’s organization and activities,

b. an assessment of suitability and application of the criteria

regarding the stakeholders’ need for information,

c. an assessment of the outcome of the Company’s stake-

holder dialogue,

d. interviews with the responsible management, at group

level, subsidiary level, and at selected business units in

order to assess if the qualitative and quantitative informa-

tion stated in the CSR Report is complete, accurate and

sufficient,

e. shared internal and external documents in order to assess

if the information stated in the CSR Report is complete,

accurate and sufficient,>>


csR RePoRt / comBineD assURance RePoRt

f. analytical procedures of the information stated in the CSR

Report,

g. an assessment of the Company’s declared application level

according to GRI guidelines,

h. an assessment of the overall impression of the CSR Report,

and its format, taking into consideration the consistency

of the stated information with applicable criteria, and

i. a reconciliation of the reviewed information with the

sustainability information in the Company’s Annual Report

for the financial year 2011.

Audit Procedures

Our audit has included the following procedures:

a. reconciliation of reported information with internal and

external source documents, and performing detailed tests

of the selected indicators in the table “Key indicators for

responsible gaming” on page 110 in the Annual Report.

Stockholm, 16 March 2012

Deloitte AB

Lars Egenäs Andreas Drugge

Authorised Public Accountant Expert Member of Far

We consider the evidence collected during our examination

to be sufficient and appropriate in order to support our

conclusions listed below.

Conclusions

Our conclusion based on our review

Based on our procedures performed, nothing has come to

our attention that causes us to believe that the information

in AB Svenska Spel’s CSR Report which has been subject to

our review has not, in all material respects, been prepared

in accordance with the above stated criteria.

Our conclusion based on our audit

In our opinion, the information in AB Svenska Spel’s CSR

Report which has been subject to our audit has, in all mate-

rial respects, been prepared in accordance with the above

stated criteria.

terms and definitions:Financial termsEarnings per share Profit for the year divided by the average number of shares outstanding.

Equity ratio Equity including minority as a percentage of total assets.

Gross gaming revenue Revenue for all games and lotteries during the period, excluding stakes for multi-week games pertaining to future periods.

Net gaming revenue Gross gaming revenue less paid-out winnings.

Net revenue per employee Net revenue from gaming operations, etc., divided by the average number of employees.

Net sales from gaming operations, etc. Net gaming revenue less commissions to retailers and other revenue pertaining to gaming operations.

Operating margin Operating profit after depreci-ation and amortisation as a percentage of total revenue.

Profit (surplus) The profit is that part of Svenska Spel’s revenue that remains after paid-out winnings and deduction of costs for Svenska Spel’s administration. A portion of the profit from Penninglotten is paid to cultural projects. The remainder is paid to the public treasury.

Solberg • Printing: Elanders • Photos: Olof Holdar, Maja Suslin, Bildbyrån and others. Cover photo taken by Jennifer Nemie and shows the trophy that the prize-winning retailer receives at Svenska Spel’s annual Retailer Gala. Translation: The Bugli Company AB.

Other termsBusiness partners Restaurants and bingo halls offering gaming on Vegas VLTs in premises in partnership with Svenska Spel.

Corporate Social Responsibility (CSR) A concept that involves companies voluntarily integrating social and environmental consideration in their business operations and in conjunction with their stakeholders. CSR can be divided into seve-ral areas: Business ethics responsibility, Environ-mental responsibility, Social responsibility and Economic responsibility (Source: the European Commission).

Net gaming market The total known Swedish gaming market in SEK, based on the total net gaming revenue of gaming companies.

Net market share The total known Swedish gaming market in%, based on the total net gaming revenue of gaming companies.

Player base A term used in Svenska Spel’s gaming survey that refers to the total underlying num-ber of players.

PlayscanTM is a tool on svenskaspel.se designed to proactively prevent problem gaming by iden-tifying players at risk of developing gaming pro-blems in the future. Players who activate Play-scanTM are notified of any changes in their gaming behaviour.

Precautionary principle The precautionary prin-ciple, as expressed in Svenska Spel’s mandate, means that, when considering the introduction of new games or entering new markets, Svenska Spel shall take protective measures, observe the limitations and take the precautionary measures otherwise required to prevent, hinder or counter-act the risk of negative social consequences for consumers and society.

Promotion ban Section 54 of the Swedish Lotteries Act states that those who illegally and in professional activities, or otherwise for acquisitional purposes, intentionally promote in a lottery arranged outside Sweden, and if such promotion pertains to participation from Sweden, may be fined or imprisoned for a maxi-mum of six months.

Rake In poker games – both at Casino Cosmopol and at svenskaspel.se – a fee is charged, which is referred to as the rake.

Responsible gaming tools Tools – such as PlayscanTM – that help customers to maintain control of their gaming.

Retailers The retail chains, department stores, grocery stores, petrol stations, etc., that sell Svenska Spel’s games and lotteries under agreement.

Test purchases Svenska Spel contracts external suppliers to make anonymous customer visits to retailers and business partners to check compli-ance with the rules related to age limits and identification checks.

Financial Calendar 2012Annual General Meeting, 24 AprilSvenska Spel’s AGM will be held on Tuesday,24 April in Visby, Gotland.

Interim reports 2012January–March 24 April 2012January–June 23 July 2012January–September 24 October 2012Year-end report, January–December February 2013

AB Svenska Spel Head OfficeSE-621 80 VisbyVisiting address: Norra Hansegatan 17, VisbyTel +46 (0)498-26 35 00Fax +46 (0)498-26 36 30

AB Svenska SpelSE-106 10 StockholmVisiting address: Sturegatan 11, SundbybergTel +46 (0)8-757 77 00Fax +46 (0)8-98 25 98

Svenska Spel’s Customer ServiceOpen 24 hours each dayTelephone +46 (0)770-11 11 11 (local call cost)Internet: Contact formPostal address: Svenska Spel, Kundservice, SE-621 80 [email protected] +46 (0)498-26 35 34

Svenska Spel on the Internetwww.svenskaspel.sewww.facebook.com/SvenskaspelNewsroom: media.svenskaspel.setwitter.com/svenskaspelblogg.svenskaspel.se

Casino Cosmopolwww.casinocosmopol.se

STOCKHOLM

Visiting address: Kungsgatan 65Tel +46 (0)8-781 88 [email protected]

GOTHENBURG

Visiting address: Packhusplatsen 7Tel +46 (0)31-333 55 [email protected]

MALMÖ

Visiting address: Slottsgatan 33Tel +46 (0)40-664 18 [email protected]

SUNDSVALL

Visiting address: Casinoparken 1Tel +46 (0)60-14 11 [email protected]

Playscan ABwww.playscan.comVisiting address: Sankt Eriksgatan 3, Gothenburg

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