Codere Online, based in Madrid, is navigating a challenging landscape in Mexico, where recent tax increases have impacted its operations. Despite these challenges, the company reported strong financial results for the fiscal year 2025, with a notable 6% rise in net gaming revenue (NGR) to €224.1 million. The Mexican market remains pivotal for Codere Online, marked by a 12% year-on-year growth in NGR. However, a substantial tax increase from 30% to 50% presents significant hurdles for the company as it seeks to maintain its financial momentum in a regulatory environment that relies on outdated legal frameworks.
The Mexican government’s decision to raise gambling taxes considerably affects Codere Online and other operators in the region. The regulatory framework, largely unchanged since 1947, adds to the complexity of operating in Mexico. Codere Online’s CEO, Aviv Sher, has expressed concerns about this dated system, highlighting the difficulties it poses in making long-term business commitments. Sher emphasized the necessity for a modern regulatory overhaul to provide stability and predictability, noting that frequent regulatory shifts in other Latin American countries have created uncertainty.
In addition to its Mexican operations, Codere Online continues to enhance its presence in Spain, where it reported a 3% increase in revenue for 2025, reaching €90.5 million. Despite advertising restrictions introduced in 2020, which banned welcome bonuses and celebrity endorsements, the company has adapted its strategies and is now seeing positive growth. Sher warned, however, about the potential for regulatory overreach across Europe, which could stifle market growth and push players towards unregulated operators.
Sher’s critique is shared by others in the industry, who fear that stringent regulations might drive gamblers to black markets. These unregulated spaces pose risks both for consumer protection and tax revenue collection. Sher argues that heavy-handed restrictions do not decrease gross gaming revenue (GGR); rather, they shift it away from the taxable and regulated domain.
Codere Online has achieved market success through its keen focus on localization, particularly in Mexico. This approach involves tailoring services and partnerships to local tastes and cultures, evidenced by its sponsorship of the Monterrey Rayados Football Club. This localized strategy, combined with Codere’s broader partnership with Real Madrid, enhances brand recognition and consumer engagement across Spanish-speaking regions.
While Codere Online is eyeing future regulatory opportunities in Uruguay, it remains cautious about entering the Brazilian market. The company’s CFO, Marcus Arildsson, has underscored the importance of entering new markets only when the conditions align with the company’s strategic goals. The Brazilian market, with its language barriers and substantial financial requirements, is currently not a priority for Codere Online, which prefers focusing on its strength in existing markets.
Meeting its financial targets for 2025, Codere Online aims to achieve an NGR of €235-€245 million and an adjusted EBITDA of €15-€20 million in the current fiscal year. Sher believes the company’s robust growth in Mexico and Spain will continue to underpin these objectives. He also sees the upcoming World Cup, which Mexico will co-host, as an opportunity to attract new customers and strengthen the company’s market position.
Looking ahead, Codere Online is committed to a cautious but focused expansion strategy, prioritizing investments in markets where it has established a strong presence and can achieve high returns on investment. The company’s strategic emphasis remains on deepening its penetration in Mexico and Spain, leveraging its brand strength and market knowledge to drive growth.
As Codere Online continues to navigate regulatory complexities, its strategic focus will remain on capitalizing on established markets rather than pursuing speculative expansions. This approach highlights the company’s commitment to sustainable growth and cautious market engagement in a rapidly evolving industry landscape. The next steps will likely involve monitoring regulatory developments, particularly in Mexico, and adjusting strategies to remain compliant and competitive in its core markets.
4.2/5
