Codere Online’s Aviv Sher has expressed expectations that Spain will reintroduce strict advertising controls for the gaming industry within the next year, despite the Supreme Court’s April ruling that overturned several measures within the existing decree.
In April, the Spanish Supreme Court rolled back multiple advertising restrictions, allowing operators to market to players with accounts less than 30 days old and lifting the ban on celebrity endorsements. Ads on platforms like YouTube are now permitted again, and operators can advertise to users aged 18 and over on social media for the first time since the ban’s inception in November 2020.
Short-lived Relief from Ad Restrictions
However, Sher is skeptical about the longevity of these relaxed regulations in Codere Online’s second-largest market. During Codere Online’s Q2 results call, Sher commented, “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.” He further confirmed to iGB that he anticipates the Supreme Court ruling will be overridden by a new decree reinstating the original advertising ban.
“We have one year to use media as we can now,” Sher added. “We are just closing short term deals so stay tuned.” The initial ad ban, under Royal Decree 958/2020, restricted advertising on TV, radio, and digital channels, including YouTube, to between 1am and 5am, and limited social media promotions to existing followers.
Stricter Regulations on the Horizon
Sher noted that overall, Spanish regulation is becoming “more and more strict.” He emphasized the significant development efforts required to adapt to these regulatory changes, stating, “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. We all the time keep a close look on the Spanish regulation, which changes constantly.”
Short-term Benefits Amid Regulatory Uncertainty
Despite the anticipated return of strict regulations, the recent relaxation has provided short-term benefits for Codere Online. In Q2, the company saw a 39% year-on-year revenue increase to €54.4 million, with adjusted EBITDA reaching €1.3 million compared to a €4.8 million loss in the previous year. Spain contributed €21.8 million to the Q2 total, marking a 25% increase from the prior year.
Sher highlighted that Spain’s victories in major sports events, such as the Euro Tournament, Premier League, and Wimbledon, boosted active customer numbers in both Spain and Mexico by 5%, and increased spending per active first-time depositor (FTD).
As Codere Online navigates the shifting regulatory landscape, the company remains focused on capitalizing on the current advertising opportunities while preparing for the potential reintroduction of stringent controls.
Sources:
“Codere Online expects Spain to reintroduce its strict controls limiting advertising in the next year.”, igamingbusiness.com, August 7, 2024.