“ The advertising ban [ in Spain ] made it clearer [ Mexico ] was where we needed to invest . We see our future there ”
advertising for years as they build their brands in the unregulated environment .”
While Codere won ’ t be among the first wave the business certainly wants to ultimately find a way in “ and we want to do it the same way we did it in Mexico ”, Sher explains . “ In order to do that we need a lot of money , a lot of capital , so we are looking for a JV , or to raise more debt or capital for Brazil , or even a spinoff focused on Brazil with separate financing .
“ With the current structure that we have , we will not be able to penetrate Brazil and make good investments and give our investors a good deal there .”
PROFITABILITY EQUALS OPPORTUNITIES
All of this ultimately hinges on Codere Online ’ s profitability , with Q3 2023 being its first EBITDA-positive quarter . The business simply can ’ t raise more debt in the current economic climate , so posting positive EBITDA is crucial . “ When the macroeconomics change , and we show profitability , it will be easier to raise debt . That ’ s why we ’ re super focused on delivering positive earnings by the end of next year .”
It ’ s certainly not that the business lacks ambition but more that there ’ s a realistic focus on growing sustainably . That doesn ’ t mean Codere Online isn ’ t ambitious , Sher adds .
“ In South America we look at Brazil , Chile and Peru like a second stage . But we are always looking north , to North America .
Aviv Sher , Codere Online CEO
“ There is a large Hispanic population here , Spanish-speaking people that we appeal to with our brand . Brazil and North America are two strategic moves we want to make , but we need to see how to build a new structure around them to do it properly .
“ I think whoever will take us to North America and use our brand for Spanishspeaking people , I think we can do a very nice job with that .”
TARGETING THE SPANISH- SPEAKING US ?
While it ’ s in Codere Online ’ s medium to long-term plans , a push to the Spanishspeaking US population hinges on the Sunshine State .
“ The key is Florida ,” Sher explains . “ We are waiting to see how it ’ ll develop there with Hard Rock .”
The Seminole-owned Hard Rock Bet is only recently back in action after multiple legal challenges although the ongoing dispute over its de facto monopoly in the state threatens to throw up further surprises .
“ Hopefully we ’ ll be able to cooperate [ with Hard Rock ] but Florida is very interesting for us and our brand . Of course , Texas could be interesting .”
California – despite the current regulatory impasse – is also of interest , as are New Jersey and New York . But for Codere to realise these ambitions Sher believes new investment is vital .
“ 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 ,” he says .
Even a private equity investment or a reverse takeover could be on the cards . “ There are a lot of moving parts but nothing concrete . So it ’ s not in the short term , maybe medium-long term we ’ ll see something around those areas .”
STRONG VALUATION
But for now , the focus remains Spanishspeaking markets where the business can grow sustainably and efficiently . “[ That ] should be big enough to bring the company to a nice valuation ,” Sher says .
Those opportunities are developing and growing . Considering it listed at a time when addressable regulated markets were limited to Colombia , Mexico and Spain , Codere Online ’ s options have developed rapidly as Peru and Chile regulate .
The business may be in the early stages of its expansion plans , but the conditions are developing for Codere Online to become a force in Latin American igaming .
ICE LONDON 2024 • ISSUE 135 • 123