As Mexico’s government weighs up a rise in the country’s gambling tax, Codere Online says it may have to reassess its investment in the market.
Codere Online has warned of uncertainty around its position in Mexico, as a proposed rise to gambling tax could impact its business in the market.
Codere Online reported its Q3 earnings on Monday. It said net gaming revenue for the period had dropped slightly to €51.6 million from the €51.7 million reported last year.
Adjusted EBITDA for Q3 was up €2.9 million or 93.3% compared to €1.5 million last year, with Codere Online reiterating its full-year NGR guidance of between €220 million-€230 million and adjusted EBITDA of €10 million-€15 million.
The company’s NGR in Mexico was €26.8 million, a 0.4% year-on-year rise. Codere Online CEO Aviv Sher noted revenue had been flat in Mexico despite a 5% devaluation of the peso and a consistently low sports betting margin.
However, Mexico is in the process of increasing its tax rate on gambling from 30% to 50%, as part of the government’s 2026 budget.
The hike hasn’t yet been approved, but CFO Oscar Iglesias, who will shortly be replaced by Marcus Arildsson, expects it to come into effect from 1 January.
“The discussions around capital allocation, I think, is a broader one, and it’s in the context of the discussions we’re having at the board level,” he told analysts during the earnings call, in response to questions on its position in the market.
“The tax obviously factors into that in terms of our appetite and willingness to invest into the market because it has an impact on the unit economics, the flow-through of every dollar of NGR to EBITDA in the business.
“It’s still a little bit early to say what that means in terms of our plans for next year to invest in Mexico.”
Mexico government targeting the wrong side of legality
Mexico continues to be Codere Online’s biggest market, with its €26.8 million in Q3 revenue ahead of the €22 million achieved in its home market of Spain.
Its monthly active players in Mexico soared by 39% to approximately 88,300, compared to 50,200 in Spain.
Elsewhere, Codere Online is working with the Mexican government to highlight the prevalence of the black market in the country.
Iglesias said the go