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Codere loses 10% of its online players after betting advertising regulations in Spain

Codere, an online gaming company, lost 10% of its players in Spain in the first quarter of 2022, compared to the same period last year, as recently announced by the SEC, the United States stock market regulator. This is the first quarter when it is possible to compare the effect that some measures of the online gambling advertising ordinance prepared by the Ministry of Consumer Affairs may have with the period before its entry into force.

The bookmaker’s statements to sports broadcasters were maintained until August last year, after the grace period that had elapsed since the approval of the contract protection rule in November 2020 expired. But many restrictions (in the case of advertising activities, in the case of advertisements on some websites and social networks, or in the case of restrictions on the activities of so-called tipsters or betting toasters) came into force on May 1, 2021.

The data sent to the SEC shows that the Spanish gambling multinational online subsidiary closed the first quarter of 2022 with 32,643 active players in Spain, down 10% from 36,275 in the first quarter of 2021, before coming into force. That part of the ordinance.

The company emphasizes that despite the decrease in the number of active players, in the first quarter of this year has already recovered and even exceeded the level of turnover before the norm, the turnover growth in Spain was 24%. Annually and 15% compared to the previous quarter. The regulation, introduced by a subsidiary of Alberto Garzon’s department, has been linked to poor performance last year, when its losses quadrupled to more than € 68 million.

Presenting the results for the fourth quarter, Codere Online CEO Moshe Edri noted that fiscal year 2021 was “not just an impact of our limited financial resources” but also “new constraints that continue.” Be our largest revenue market, Spain ”, which is also the only one to record positive gross operating profit (Ebitda).

“These restrictions have had a greater impact on our business than expected, which has had a negative impact on our financial and operational metrics, especially in the second and third quarters,” Edri said. Thus, in the third quarter of last year, which coincided with the entry into force of the decree, the number of active users in Spain fell to 28,000, which is 22% less than in the first quarter of 2021.

But Edre highlighted the recovery recorded in Spain in the last quarter of 2021 on March 31, which continued (albeit with less energy) in early 2022. “The positive thing in Spain is that we are already seeing a full recovery,” said the Israeli executive, “both in terms of billing and the players who continue to play.” In addition, it “recruits new players who come through our own channels, brands and organic channels.” “The quality of the players is much higher than we have seen before,” he said.

At a recent results conference, Codere Online CEO Oscar Iglesias insisted on the idea, stressing that the Spanish subsidiary was already restoring invoice-level regulation to a regulation introduced by the consumer based on a temporary veto experience. Was introduced during detention, prompting Garzon’s ministry to tighten its original proposal.

The data is “very encouraging” and “will start what we believe to be a positive trend for our Spanish business,” said Iglesias, who told analysts “the importance of our comprehensive approach”: “Physical presence, its chain of betting shops in Spain, allows you to” “Connect with customers in a way that is inaccessible to online operators, especially when advertising and marketing activities are limited.”

Edrey stressed at the conference that the group was “gaining some market share” in Spain, although his focus was on Latin America, where his sponsorship deal with Real Madrid is maintained. Presenting the annual results, Israel explained that the group is taking advantage of the gap left by the ordinance and will announce itself at dawn.

“We are already maximizing and optimizing this slot for our brand exposure. Spain is a “huge market for Codere and not only for the online zone, but also for retailers” and thanks to its multi-channel strategy and its “hundreds” of stores “we can maintain our share”.

Codere’s online subsidiary, which last summer complained about the Spanish government’s “negative stance” on a bookmaker, began operating in Spain in 2014. In parallel with the release of his parent company from the Spanish Stock Exchange, he was listed in the United States in December. By merging with Special Purchasing Company (SPAC) DD3 Acquisition Corp.II. Since then its shares have fallen by almost 70%.

Recently, this subsidiary warned of the possibility of accumulating very severe sanctions in Spain for the risk of losing a license due to non-compliance with state or regional gambling regulations. His parent company has an open file from the National Securities Market Commission (CNMV) for several Latin American subsidiaries for “accounting mismatch”, which could represent a possible “very serious” breach of the securities market law.

Source: El Diario





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