Supplier News
Mexico – Codere reports growth in Mexico
By Lewis - 19 May 2015
The largest gaming operator in Mexico, Codere has reported an annual growth of 15.9 per cent in Mexico in the first three months of this year to reach €90.9m.The result was driven by the appreciation of the Mexican peso against the euro (7.5 per cent), and a low base of comparison to the same period of 2014, when its revenue fell 25.2 per cent due to the Anti-Money Laundering Act which came into force.
“Revenues in the first quarter of 2014 recorded a drop of 25.2 per cent mainly due to lower average net revenue per machine per day as a result of increased competitive pressure, as well as the implementation of anti-money laundering law … which involved the application of new technological procedures for customer management and gaming activity in our rooms,” said the company in a statement last year.
Despite the recovery, Codere has still not reached its pre-implementation levels of the Act, as in the first quarter of 2013 the company had revenues of €104.8m. According to reports in local press, the company is looking to strengthen its position ahead of Mexico’s new gaming act which is currently awaiting approval in the Mexican Senate.
In a recent interview with CNN Expansión, Emilio Hank, President of Caliente Interactive, a subsidiary of Grupo Caliente in Mexico, agreed that the new regulations will open up opportunities for the company, as the new regulation will ensure foreign operators will no longer be able to offer their services locally.
Under current rules gaming companies which are already physically established in Mexico are permitted to apply for an online license and it is believed that the new gaming act, although focused primarily on the land based sector, will further seek to limit online gambling to local land based operators.
According to the Association of Licensees, Entertainment Gambling & Gaming Industry Operators and Suppliers (Asociación de Permisionarios, Operadores y Proveedores de la Industria del Entretenimiento y Juego de Apuesta) offshore online gaming companies generates about US$300m a year without paying tax in Mexico.
In the last three months of 2014, Codere acknowledged the closure of seven of its gaming rooms in Mexico as a result of inspections undertaken by the federal government.
Mexico is the second most important market for Codere after Argentina, Italy and then Spain. Codere has been present in the Mexican market since 1998 and operates in Mexico in association with two groups that are leaders in the domestic market: Grupo Caliente and Compañía Interamericana de Entretenimiento (CIE) Codere has been providing gaming management services and hall development services since 1997 for Caliente. In 2010 Codere and Caliente signed an agreement which consisted of the restructuring of approximately US$121m of debt of Caliente through the acquisition by Codere of a share of its gaming operation. Codere’s other partner in the area is CIE.
Codere has been working with CIE since 1999 when both companies signed a joint venture agreement where Codere would develop and run its bingo halls and sports betting shops. In 2007 Codere acquired 49% of CIE’s betting arm, ICELA (Impulsora de Centros de Entretenimiento de las Américas), a licensee that operates 52 gambling establishments nationwide. In 2012 Codere and CIE signed another agreement where CODERE signed a purchase option with CIE to acquire an additional 35.8% of ICELA in return for €1
