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brand-building ( notably , it sponsors Spanish football giants Real Madrid ), meaning it can maintain market share and retain players acquired during the years of investment . Even today Sher believes the Madrid deal contributes to Codere ’ s brand awareness .
Codere ’ s retail operation in Spain means the brand remains visible on the high street , further shoring up its brand awareness . “ In Spain we feel comfortable ,” he says .
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MOMENTUM BUILDING IN MEXICO
So comfortable , in fact , that Codere is diverting investment into Mexico . It ’ s a “ younger ” market for the operator , Sher points out , but one where it ’ s enjoying a rapid return on investment . The country even outstripped Spain as its largest single territory with € 21.0m of revenue , representing 49 % of the group total in Q3 .
“ We are focusing on Mexico and moving funds in order to grow our exposure and compete with our main rivals ,” he says .
Sher draws parallels with Spain , arguing Codere Online ’ s early investment came before major operators began circling . “ A lot of big companies ” are looking into Mexico launches next year , ramping up media pricing and the attendant barriers to entry for new competitors .
Mexico ’ s importance isn ’ t the result of a particularly strong 2023 performance . “ We think it ’ s a trend ,” Sher adds . “ The advertising ban [ in Spain ] made it clearer this was where we needed to invest . We see our future there .”
WHERE ELSE IS ON THE RADAR ?
Mexican igaming is now one of a range of opportunities for igaming in Latin America and it ’ s firmly in the industry ’ s
“ We think a joint venture with a large American casino makes sense . The same goes for a joint venture with a technology company that wants to go into B2C ”
sights . Codere Online will face rising competition as the likes of Peru , Chile and even Brazil regulate .
Sher is mindful his business is effectively a startup and cost discipline is key . He is only considering fully regulated markets , for the legal certainty that provides as well as an indication of costs the operator will incur .
“ We are only operating where we know the tax regime , how much money we are going to make , how the business plan looks ,” he says . “ This is mitigation , so we are not working in any grey market showing great results without paying taxes . [ In those territories ] your 25 % pre-regulation margin can quickly fall to 5 %.
“ The other mitigation is of course regulated markets with lower tax rates .”
Peru ’ s lower tax rate makes that more attractive , as does Panama ’ s . The operator is yet to enter Argentina ’ s
Buenos Aires province but Sher believes it could rival Mexico as Codere Online ’ s biggest market .
“ It ’ s really not as big but in terms of player values , from a retail point of view , a customer is worth more in Buenos Aires than Mexico ,” he explains . The city and province cover 80 % of Argentina ’ s wealth meaning igaming ’ s slow province-by-province march barely matters .
But Brazil sports betting and igaming , considered LatAm ’ s biggest opportunity by the industry , does not fit into Codere Online ’ s plans currently .
“ Our current structure , our current plans , and the way we operate , we are not entering Brazil ,” he takes pains to clarify , going further to note : “ It ’ s not a Spanish-speaking country . It ’ s a different culture , it ’ s sports-only [ igaming has been regulated since this interview took place ], and we have huge players
122 • ISSUE 135 • ICE LONDON 2024