BUSINESS

Spain moves on slots, exchange betting plans; Codere on brink of bankruptcy

TAGs: Codere, Exchange betting, slots, spain

spin-online-slotsNearly a year after Spain first announced it would expand its online gambling market via the addition of slots and exchange betting, that promise has finally taken on tangible form. While the actual appearance of slots on regulated operators’ online sites is still far off, the Dirección General de Ordenación del Juego (DGOJ) plans to submit a draft ministerial order to regional authorities on Feb. 19. The DGOJ will then publish the draft on its website and solicit comments from industry members and the general public. If necessary, the DGOJ will amend the draft then submit it to the Tax Ministry and publish the final regs in the official gazette. A six-month countdown would then commence to ensure no operators got a head start on the slots rollout.

DLA Piper reported that the draft document also contained a provision to launch a new tender that will allow more operators to enter the market. That is, assuming anyone wants to enter Spain’s online market, which suffered shrinkage for three straight quarters in 2013. While wagering handle has suffered, operator revenue has taken an even greater hit, mainly due to the country’s much-loathed 25% tax on gross gaming revenue. Each quarter brings further evidence of the few operators who are making a go of things in Spain increasing their share of the market, leading to more than a few operators giving up and returning their licenses to the DGOJ.

Research financed by struggling Madrid-based operator Codere showed that the percentage of Spanish leisure spending on gambling had decreased from 9.4% to 7.7% last year. The decline isn’t limited to online gambling, as earlier research showed that brick-and-mortar casino turnover has fallen from €2.5b in 2007 to €1.5b in 2012. Spain’s overall economy has been in a freefall since the 2008 financial crisis, with over a quarter of the country’s workforce unable to find a job. Codere, whose debt load tops €1.2b, defaulted on a €127m loan last week after failing to reach a deal with bondholders. The company technically has until May 2 to restructure its debt, but bondholders are expected to push the company into bankruptcy proceedings ahead of that date.

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