Codere Online Sees Net Loss in Q1 despite 24% Revenue Gain

Posted on: May 13, 2022, 08:44h. 

Last updated on: May 13, 2022, 09:15h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

Codere Online is still trying to find solid footing after its arrival as a publicly-traded company last December. The online casino operator’s latest financial health report doesn’t show a lot of strength, but signs of improvement are there.

Codere Online
A Codere sign welcomes bettors in Argentina. The new Codere Online company formed last year is still having difficulty finding its financial footing. (Image: Infobae)

In the first quarter of the year, Codere Online had a little more than €25 million (US$26.02 million) in net gaming revenue (NGR). That represents growth of 24%. The company has a significant presence in the Latin American iGaming space, and much of that success came from its operations in Mexico.

In spite of that performance, Codere Online saw a net loss of €10.1 million (US$10.4 million) for the period. This was approximately US$4 million worse than the loss it reported in the first quarter of 2021.

Latin America Proves Its Power

The LatAm gaming market continues to see considerable growth, which Codere Online’s numbers reflect. Net Gaming Revenue (NGR) from the Mexican market jumped 56% to €10 million (US$10.4 million), while NGR in Colombia skyrocketed 81%. That percentage gain was huge, but Colombia only contributed €1.5 million (US$1.56 million) to the company’s success.

The number of monthly active players (MAP) in both Mexico and Colombia increased, as well. This is reflected in the revenue, with Mexico adding 31% and Colombia adding 67%.

The business is off to a good start, with a 24% increase in net gaming revenue for the first quarter, on the back of a very strong performance in Mexico and solid results in Spain, where net gaming revenue is above where it was prior to the significant marketing restrictions implemented in May last year,” stated Codere Online CEO Moshe Edree.

Spain didn’t contribute a significant amount to the company, nor did Argentina, which has become a target of a potential sell-off. Codere Online’s Spanish operations provided €13.2 million (US$13.73 million). This is only slightly better than the €13 million (US$13.54 million) from a year ago. This is the result of a 10% drop in the MAP in Spain.

Argentina didn’t even warrant a separate mention in the financial report. Instead, its performance became part of the “other” category in both NGR and MAP.

Codere Questions Future in Spain

Besides considering a sale of assets in Argentina, it’s possible that Codere Online might consider making changes to its operations in Spain. However, those changes may be the result of a transformation of the country’s gambling industry.

Codere recently warned investors in the US that it risks losing its online betting operator license in Spain. The reason is a recent legal change that allows these companies to withdraw the license if there is an accumulation of very serious infractions of the state or regional gambling regulations.

The operator alludes to a recent modification of the Gambling Law of 2011. Last July, it introduced a new assumption that may disqualify online gambling operators in Spain. The modification states that an operator can lose its license if an executive has received a sanction in the last four years.

It also covers “any other entity that is part of the business group to which it belongs.” The rule applies to sanctions for “non-compliance with the gambling regulations of the State or the Autonomous Communities.”

Two Codere entities, Codere Apuestas Galicia, SL and Codere Apuestas Extremadura, SAU, previously received such sanctions. However, because the sanctions – for a total of €98,000 (US$102,018) – were prior to the implementation of the new rule, Codere Online may be safe. For now, it doesn’t appear that Spain’s gaming regulator will enforce the rule retroactively.