Paddy Power has recently launched a new business to business service offering clients a range of Risk Management Services.

The initial offering focuses on two products:

• 1. Player Bonus Cover and,
• 2. Conditional Rebates

1. Player Bonus Cover explained:

This product enables Teams/Clubs/Associations/Sponsors to hedge against existing or increased player bonuses. Paddy Power can insure against the bonuses being paid for a fraction of the total payout.

For example, let’s say a football club had a player and staff bonus of €10m for winning the Champions League. Paddy Power assesses the probability of that happening and then calculates a premium accordingly.

If the club hedges these bonuses with Paddy Power and are ultimately successful then Paddy Power pay out the €10m to the club.

2. Conditional Rebates explained:

This product enables retailers to drive sales and awareness by offering cash rebates/discounts if a particular event happens.

For example:

A car retailer may run the following promotion:

“Buy a BMW in August and if England win the Rugby World Cup get your money back!”

If the retailer hedges these bonuses with Paddy Power and England win the World Cup then Paddy Power pays out the amount hedged to the car retailer. The car retailer in turn returns the rebate to his customers.

The benefits that these products deliver to our business clients are:

• cap their financial exposure thereby enabling them to budget with certainty
• drive increased sales and customer retention through the creation of innovative marketing campaigns
• offer attention grabbing prizes for a fraction of the potential payout

The events that may be hedged are not restricted to Sports and may include promotions related to weather such as a White Christmas in a particular location.

In summary these products enable clients to drive the top line revenues while protecting the bottom line profits.

For further information or help in structuring your bonuses or promotions please contact: