Summary:
Codere Online’s total revenue increased by 51 percent to 28.9 million in the third quarter of 2022, while net gaming revenue increased by 54 percent to 30.6 million. Codere spent 5 million more on marketing in the third quarter than it did in the second quarter. Other costs were largely static in the second quarter.
Much of the increased losses can be attributed to increased marketing spend. Codere spent 5m more on marketing in the third quarter than it did in the second quarter. Other costs were largely static in the second quarter.
In Q3 2022, total revenue increased to 28.9m, a 51% increase, while net gaming revenue increased to 30.6m, a 54% increase. The company received 29.2m in net revenue in the previous quarter and 27.4m in total revenue. Revenue not increasing at the same rate as marketing spend is the reason for the increased losses.
The CEO of Codere Online said that the growth was driven by the company’s continued expansion in its critical markets of Mexico and Spain, which make up the majority of the business’s total revenue.
Edree said, “We are reporting a strong set of results in the third quarter of 2022, with net gaming revenue growing compared to the same period last year, on the back of stronger than expected results in our casino business.”
Net gaming revenue in Mexico was up by over 80% in the quarter. Despite the marketing restrictions currently in place, Spain surpassed our expectations with a 29% growth.
At the end of last year, Codere Online was spun out from the broader Codere business through a SPAC merger.
A hero in the local area
Competition for operators in the market has become more difficult because of Spanish gambling restrictions. Edree pointed out that the company is a local hero due to its connection with its former parent company, which has a strong retail presence in Spanish speaking countries.
Edree said that the international brand that doesn’t have a local brand is not strong enough to face the Spanish market.
Codere is being like a local hero with retail operation, with a strong brand, with the back of years of the sponsorship of Real Madrid, we are harvesting more, like other public companies like William Hill.
Edree claims that this is different from Mexico, where many large operators are intending to enter the market.
He said that the spend per customer was quite high. Although the entry level is not as obvious, you need to have a strong intellectual property that you need to have, and from our experience you need to have a strong local to set up the overall scheme of license with regulation.
I think the trend is that more and more international brands will try to enter the market. I believe that this market will be dominated by a few local heroes, such as our self, and then a few others.