Codere Online CEO believes Spanish government will reinstitute ad controls next year

The Supreme Court rolled back multiple restrictions on Spanish licensees in April this year. This meant operators could market to players who have held an account for less than 30 days, while the ban on celebrity endorsements was overturned.

Ads on video sharing platforms such as YouTube are once again permitted and operators can advertise to users aged 18 and over on social media for the first time since the ban came into force in November 2020.

Ad restrictions coming back?

However Sher believes these forms of advertising have a limited shelf life in Codere Online’s second biggest market. “From the Supreme Court point of view, nothing changed. I think eventually the parliament will come back with the law and bring [the ad ban] to where it previously was,” Sher said during Codere Online’s Q2 results call.

Sher confirmed to iGB he believes the Supreme Court ruling will be overridden by a new decree bringing back the original ad ban.

“We have one year to use media as we can now,” he said. “We are just closing short term deals so stay tuned.”

The initial ad ban, via Royal Decree 958/2020, mandated that advertising on TV, radio and digital channels including YouTube was restricted to the hours of 1am to 5am. Brands were also limited to only targeting promotions towards existing social media followers.

At the time, the industry condemned the measures, noting they would only benefit unlicensed operators.

Codere Online is pessimistic about future Spanish regulations

Sher said on the Q2 call that overall Spanish regulation was becoming “more and more strict”.

He went on to clarify: “From a development point of view, we need to do heavy development just to change all the reporting modules to fit the new regulation demand.

“It’s heavy lifting there in the regulation and we are doing our best to follow it up,” he said. “We all the time keep a close look on the Spanish regulation, which changes constantly.”

Spain sports wins boost active customers and FTD spend in Q2

However the relaxed controls benefitted the operator in the short term. Revenue grew 39% year-on-year to €54.4m, with adjusted EBITDA coming to €1.3m compared to a €4.8m loss in the prior year.

Spain accounted for €21.8m of the Q2 total, up 25% from the prior year. Sher said Spain’s wins in the Euro Tournament, Premier League and Wimbledon throughout Q2 and into Q3 drove active customers in both Spain and Mexico up five per cent and increased spend per active FTD (first time depositors).