Codere Online expects advertising restrictions to return in Spain
Date: 2024-08-08 Author: Leon Pierce Categories: EVENTS
In April this year, Spain’s Supreme Court overturned several restrictions on licensed operators, allowing them to advertise their services to players who had registered less than 30 days ago. A ban on celebrities in advertising was also lifted.
Now, advertising on video platforms like YouTube is allowed again, and operators can advertise to users over 18 on social media, something that has not been possible since the ban was introduced in November 2020.
A Possibility of Advertising Restrictions Returning
However, Sher believes that these types of advertising may be temporary in Spain, which is Codere Online’s second-largest market. "From the Supreme Court's perspective, nothing has changed. I think that ultimately, Parliament will bring back the law and restore the advertising ban to its original form," Schär said at Codere Online's Q2 results presentation.
Schär confirmed to iGB that he believes the Supreme Court's ruling will be overturned by a new decree that will restore the original advertising restrictions.
"We have one year to use media as we can now," he said. "We are making short-term deals, so stay tuned."
The original advertising ban, introduced by Royal Decree 958/2020, limited advertising on television, radio and digital channels including YouTube between 1am and 5am. Brands were also allowed to target promotions only to existing social media followers.
The industry condemned the measures at the time, saying they would only benefit unlicensed operators.
Codere Online's pessimistic outlook on the future of Spanish regulation
Scher said on a conference call following the second quarter that overall regulation in Spain is becoming "more and more stringent."
He elaborated: "From a development point of view, we have to do a lot of work to change all the reporting modules to comply with the new regulations. This is hard work, and we are doing everything possible to comply with the new requirements," he said. "We are constantly monitoring the changes in the Spanish regulation, which is constantly changing."
Short-term benefits from relaxed controls
The easing of advertising restrictions has had a positive effect on operators in the short term. Codere Online's revenue increased 39% year-on-year to €54.4 million, with adjusted EBITDA of €1.3 million, compared to a loss of €4.8 million last year.
Spain contributed €21.8 million to the total for Q2, up 25% year-on-year. Scher noted that Spain’s victories in the Euros, Premier League and Wimbledon in Q2 and Q3 contributed to a 5% increase in active customers in both Spain and Mexico, as well as an increase in spend per first deposit customer (FTD).
With advertising restrictions being eased, Codere Online has been able to improve its financial performance, but the future of regulation in Spain remains uncertain. Scher stresses the importance of staying current and adapting to the ever-changing environment.
