Codere Online has adopted a more methodical strategy compared to other operators aggressively pursuing growth in the Latin American (LatAm) markets. Headquartered in Madrid, the company has achieved record growth in recent months, even amid uncertainty within its LatAm operations, particularly due to a tax increase in Mexico, its primary market.
In February, Codere Online reported a record Net Gaming Revenue (NGR) of €224.1 million for fiscal year 2025, reflecting a 6% increase from the previous year. Mexico has emerged as a focal point for the company's growth, with NGR in the region increasing by 12% year-on-year in 2025.
However, Codere Online, along with other operators, faces challenges posed by a recent alteration in the gambling tax landscape, which saw the rate jump from 30% to 50% earlier this year. This shift is particularly disheartening given that Mexico's regulatory framework is grounded in laws that are almost 80 years old. Aviv Sher, the Group CEO, maintains that Codere Online will adapt to this tax hike, but he supports calls for a more modern regulatory environment in Mexico.
"Right now, we are working based on a framework of laws which you cannot even call regulation, from 1947,” Sher stated. “It’s very hard to work long-term and to give long-term commitments. While the future is unclear in terms of regulation, we have seen the consequences in other LatAm countries when regulations change frequently."
Despite these difficulties, Sher believes Codere Online has stabilized its position in Mexico. "We know how to deal with this market. Of course, we'd be very happy if a proper regulatory framework were introduced, rather than what we currently have," he continued.
In terms of its home market, Spain has slipped behind Mexico as Codere Online's biggest market. Yet, the company reported a 3% revenue increase year-on-year in Spain, reaching €90.5 million in fiscal year 2025. The Spanish market has also faced complications, including advertising restrictions and a ban on welcome bonuses stemming from regulations enacted in November 2020. Some of these regulations were lifted in April 2024.
Codere Online took time to readjust its strategies regarding acquisition and retention, but Sher expressed confidence in their newfound momentum in Spain. "We already reported nice growth in Spain, and I think we will continue," he asserted.
Sher, however, is wary that further restrictions could return, emphasizing the delicate balance needed for proper market operation. "The more rules they apply, the less we are able to operate and grow our margins and market share," he emphasized. He has joined many industry voices in warning that rigid regulation can drive players to unregulated markets, thereby diminishing governmental tax revenue and safety measures for players.
Sher underscored Codere's commitment to a localized strategy as crucial for their growth in Mexico. Drawing from its established presence in Spain, Codere has fostered understanding of regional dynamics, which has benefited them in other Spanish-speaking markets.
"We proved that building a localized strategy significantly helped us establish our brand in Mexico," he explained. This includes engaging with local entities like the Monterrey Rayados Football Club and reinforcing the brand with culturally relevant marketing.
Codere Online’s association with Real Madrid also extends into LatAm as part of a broader sponsorship arrangement.
CFO Marcus Arildsson previously stated that Codere Online would only consider new market expansions if the conditions were right. Sher echoed this sentiment, noting that strengthening their existing markets is currently more appealing than seeking new territory. Although he pointed to Uruguay as a potential future target if a suitable regulatory framework emerges, he has definitively ruled out entering Brazil. The challenges posed by Brazil, including language barriers and significant capital requirements, have led Codere to hold back on market entry for now.
Codere Online successfully met its fiscal year 2025 NGR guidance of between €220 million and €230 million, leading it to increase its expectations for the current financial year to an NGR between €235 million and €245 million, alongside adjusted EBITDA targets. Sher is optimistic about the potential to exceed these targets, positioning the upcoming World Cup co-hosted by Mexico as a prime opportunity for customer acquisition.
"I know it will be a big event. Mexico is hosting, and all our five markets are playing. It should be fun and hopefully beneficial for us," Sher noted, stressing Codere’s continued focus on its established markets of Spain and Mexico. Despite the competition eyeing the Brazilian market, Codere Online intends to deepen its presence where it has experience and brand recognition, prioritizing ROI over expansion into new markets for the time being.
