Mexico is a growth engine and a tax challenge for Codere Online
Codere Online CEO Aviv Sher said he was “very pleased with how we finished 2025,” in light of challenges his company faced during the year. Sher made his remarks during Codere’s fourth-quarter earnings call on 26 February.
Sher noted that Codere had met its investment guidance for 2025. “This gives us a lot of confidence in the strength of our business,” he said.
That business encompassed 282,000 new-customer registrations and 89,000 first-time depositors in the fourth quarter. Codere had 177,000 monthly active users, up 20% in the final quarter, with an average spend of €114 (US$135)1 EUR = 1.1802 USD
2026-02-26Powered by CMG CurrenShift per customer. Business favored igaming over sports betting, 64% to 36%.
Chief Financial Officer Marcus Arildsson said business in Spain had improved 7.5% in the final trimester of 2025 and 25.5% in Mexico. But all other countries were down, especially Colombia.
Marketing spending fell to €24.4 million (US$28.8 million)1 EUR = 1.1802 USD
2026-02-26Powered by CMG CurrenShift. Explains Arildsson, “we’re bringing more customers into the platform at good economics and keeping them engaged over time.
“All in all, Mexico continues to be the growth engine,” the CFO continued. Although Codere ended 2025 in the red, Arildsson said he remained confident. Added his boss, “the start was a bit bumpy but we finished strong, as expected.”
Of Codere’s legacy business in Spain, Sher said “we are seeing that it’s kind of going into a plateau.” But he said he didn’t feel the need to ramp up promotions, noting that Codere had two straight quarters of growth on the Iberian peninsula.
The Mexican government “has been busy with other things” than digital gaming, Sher continued. He noted that Codere’s two biggest competitors in Mexico had been shut down for political reasons. The government was not, he opined, working on a regulatory framework for igaming, choosing to raise taxes instead.
“This is their short-term solution,” Sher said of an increase in gaming taxes from 30% to 50%. He added that cartels were not a problem and “the areas around the cities are safe.” The issue was “not as big as it sounds in the news.”
Arildsson demurred from quantifying the effect of the Mexican tax surge, saying that guidance was the net effect of many issues. Codere was, he said, increasing operational efficiency to compensate for higher taxation. “We don’t see a risk to the revenue generation,” Sher added. “It’s not a danger to the business.”
Sher continued that the cost of player acquisition was lower in Mexico but the player value the same, as was the return on investment. He added that it would be unwise to go into new markets now and “It’s better that we have excessive income” instead.
The CEO confessed to some frustration with Colombia. “We are not sure if the [value-added tax] removal is permanent or not and still not able to get a final answer.” He said would not invest more in Colombia absent greater clarity.
“For now, we are enjoying players coming back,” Sher continued. “We are still treating the VAT as if it exists.” Interjected Arildsson, “the environment continues to be fluid and we’ll continue to be on the sideline until it firms up.”
Queried about Codere’s addition of poker and bingo to its igaming portfolio, Sher said it was amenity to please customers rather than a new profit center. “It will take us more time to push it exclusively,” he continued. “At the moment they are doing fine, nothing exciting.”
David McKee is an award-winning journalist who has three decades of experience covering the gaming industry.
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The Backstory
Why Codere’s tax story matters now
Codere Online entered the new year touting momentum in Mexico and Spain while warning investors that taxes, not demand, could shape its 2026 outlook. The company’s latest earnings call on Feb. 26 stressed stronger engagement, rising active users and a tilt toward igaming over sports betting. But the subtext was clear: policy risk is increasingly a P&L line item. That risk has been building for months across Codere’s key markets and the broader industry, setting the backdrop for today’s debate over where the company deploys capital and how it protects margin.
In recent quarters, Codere has sharpened its stance on tax volatility. Executives have framed Mexico as a growth engine that can absorb heavier burdens, while they have cast Colombia as a market where policy ambiguity can stall investment. Beyond Latin America, momentum for higher operator taxes in the United States underscores a wider theme: governments under fiscal strain are reassessing how to tap digital gambling for revenue without choking off the sector’s long-term growth. These crosscurrents explain why Codere highlights operational efficiency and product mix as much as top-line growth. The company is signaling it can flex costs and steer marketing to hedge against policy shocks—but only to a point.
Mexico’s shifting ground and the calculus for scale
Codere has been upbeat on Mexico’s demand profile, calling it a more “benign corporate landscape” even as tax pressure rises. In an earlier update, executives flagged an impending doubling of the country’s gambling tax and said the change could deter new entrants while prompting incumbents to revisit commercial terms. In comments outlining that approach, Codere said it was reviewing how its Mexican agreements were structured and how the effect of the hike could be shared. Management also suggested the World Cup cycle could bolster 2026 results.
The latest call stayed on message. Codere pointed to lower acquisition costs in Mexico and stable player values, arguing that scale and efficiency can cushion higher levies. That matters if rivals pull back on promotions or if gray-market competition ebbs under stricter enforcement. The company’s read: taxes may thin the field, but product depth, retention and a focus on igaming could preserve growth. The bet is that strong unit economics in Mexico can offset pressure elsewhere and justify continued investment—so long as rules are clear and costs are predictable.
Colombia’s unsettled levy and a line in the sand
Colombia remains a flashpoint. Codere has tied future investment to the fate of a value-added tax on deposits that dented unit economics. Executives framed the policy as “counterproductive” and warned they would stay on the sidelines until the landscape is clarified. In its earlier earnings commentary, the company delivered an explicit warning: if the deposit tax returns, fresh capital will not follow. If it sunsets, Codere would reassess. That position, captured in a prior ultimatum to Colombia on tax, has now carried into subsequent guidance, where the company said it continues to treat the VAT as if it exists.
The stakes run beyond one country. Colombia is often cited as a bellwether for regulated online gambling in Latin America. Policy reversals—or even prolonged uncertainty—can ripple across operator plans, vendor hiring and media partnerships. For Codere, a go-slow posture in Colombia concentrates its growth exposure in Mexico and Spain and raises the hurdle for investment in smaller markets. It also amplifies the value of operational levers: marketing efficiency, product cross-sell, and segment mix that favors higher-margin igaming over sports betting.
Tax momentum spreads in the U.S.
Codere’s Latin America footprint contrasts with the tax mood in the United States, where states are targeting sportsbook margins to help close budget gaps. In Maryland, Gov. Wes Moore and legislative leaders advanced a tiered increase that could lift online operator taxes to between 15% and 30% as part of the 2026 budget, a move framed as a response to a multibillion-dollar deficit. The state’s biggest books warned that promotions and bonuses could tighten, and smaller players argued they would bear disproportionate strain. The contours of the plan remain in flux—one lawmaker predicted a landing zone near 20%—but the direction of travel is evident. The full debate is detailed in reporting on Maryland’s proposed tax hike.
Analysts have cautioned that Maryland could set a template other states copy. For global operators, the message is familiar: regulatory costs are moving up, not down. While Codere has steered clear of a U.S. push—even with a World Cup boost on the horizon—the American conversation adds weight to its center-of-gravity strategy. Building depth in markets where it already has brand and scale may be safer than chasing new licenses into rising tax tides.
People and product: insulating margins when taxes rise
Codere’s narrative leans on cost discipline and product choices that can sustain contribution margins. That puts talent and technology in focus. Recruitment remains a pain point for operators and suppliers, especially in Latin America where specialized education pipelines lag demand. In a broad survey of industry leaders, EvenBet Gaming highlighted how hiring constraints differ by region, with North America facing fierce competition for seasoned talent and Latin America contending with a thinner pool of qualified candidates. The report underscored a generational shift: culture, purpose and flexible work now rival salary in retention, pushing companies to invest in onboarding, internal ambassadors and noncash incentives.
Those insights matter for Codere’s execution. A heavier igaming mix requires sustained product iteration, CRM sophistication and compliance muscle. If hiring gets harder or costlier in key hubs, the margin cushion Codere counts on to absorb tax shocks narrows. Conversely, if the company can localize recruitment, elevate retention and sharpen cross-sell between casino, poker and bingo—as it has begun to do—marketing efficiency can improve even as promotional budgets are trimmed.
Regulatory scrutiny is widening beyond taxes
Policy pressure is not confined to fiscal measures. Public and political scrutiny of online gambling behavior is intensifying, especially in Asia, where recent cases have spilled into professional sports. Japanese authorities referred two Yomiuri Giants players to prosecutors over alleged foreign online casino bets placed on smartphones, a case that drew attention after surveys suggested millions of residents had gambled at overseas sites. The episode is detailed in reporting on the Yomiuri Giants allegations.
In Korea, a police complaint against four Lotte Giants players tied to visits to a Taiwan venue—later reported as licensed locally—sparked questions about cross-border enforcement and the blurred line between onshore and offshore activity. Authorities are weighing next steps, as outlined in coverage of the Korean baseball probe. For regulated operators like Codere, these storylines reinforce the importance of compliance, responsible marketing and payment integrity. They also hint at a tougher backdrop for gray-market rivals if enforcement tightens, a dynamic that could, over time, benefit licensed incumbents in Mexico, Spain and beyond.
The through line is clear. Taxes are rising, scrutiny is widening and capital is more selective. Codere’s playbook—optimize for igaming yield, lean on scale markets, pause where policy is unclear—reflects where the industry is headed. The company finished last year with improving metrics and a tighter cost base. Whether that is enough to outrun tax inflation will hinge on regulatory choices in Mexico and Colombia and on Codere’s ability to keep acquisition costs low while deepening engagement. The next moves by policymakers may matter as much as the next product launch.
