Spanish iGaming Market Facing Regulatory Uncertainty

Historical Context of Ad Ban

The initial advertising ban, established by Royal Decree 958/2020, limited TV, radio, and digital ads to the hours of 1am to 5am. It also restricted promotional targeting to existing social media followers.

These measures were heavily criticized by the industry, as they were seen to favor unlicensed operators who were not subject to the same constraints.

Supreme Court Overturns Ad Restrictions

In April, the Spanish Supreme Court rolled back several advertising restrictions imposed on the iGaming industry. This decision allowed operators to market to new players, use celebrity endorsements, and advertise on video platforms such as YouTube.

Additionally, operators can now target social media users aged 18 and over, a significant change from the previous ban implemented in November 2020.

Anticipated Return of Advertising Restrictions

Despite the recent relaxation of rules, Aviv Sher from Codere Online predicts that strict advertising controls will return within the next year.

Sher stated, “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 believes that the Supreme Court’s decision will be overridden by a new decree, reinstating the original restrictions.

In response to the current regulatory environment, Codere Online is focusing on short-term media deals. Sher mentioned, “We have one year to use media as we can now. We are just closing short term deals so stay tuned.” This strategy aims to maximize the temporary relief provided by the Supreme Court’s ruling before potential new restrictions are implemented.

Increasingly Strict Regulations in Spain

Sher expressed concerns about the increasingly stringent regulations in Spain. He highlighted the significant effort required to comply with the evolving rules: “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.”

In the short term, the relaxed controls have positively impacted Codere Online’s performance. The company reported a 39% year-on-year revenue increase to €54.4 million, with an adjusted EBITDA of €1.3 million, compared to a €4.8 million loss in the previous year. Spain contributed €21.8 million to the Q2 total, up 25% from the prior year.

Sher attributed this growth to Spain’s sports victories in events such as the Euro Tournament, Premier League, and Wimbledon, which boosted active customers and increased spend per active first-time depositors.