Codere Online Luxembourg, S.A. — FY2023 Form 20-F
Period and basis: Annual report for the fiscal year ended December 31, 2023, filed May 1, 2025. This is not a Q4-only report; the filing does not provide clear standalone fourth-quarter results. Financial statements are prepared under IFRS in euros. FY2023 is consolidated; FY2022 and FY2021 comparatives are carve-out financial statements and may not be directly comparable.
Business context
Codere Online operates online casino and sports betting primarily in Spain, Mexico, Colombia, Panama and Argentina. Revenue is recognized when wagers are resolved. The company depends on the Codere Group for important technology, operational services, brand rights and, in Mexico, access to the gaming license through a related-party arrangement.
Key financial results
| Metric | FY2023 | FY2022 | Change |
|---|---|---|---|
| Revenue | €161.6m | €115.7m | +39.7% |
| Operating loss | €14.8m | €55.9m | Loss narrowed |
| Net loss | €2.4m | €46.4m | Loss narrowed |
| EBITDA (non-IFRS) | €14.6m loss | €42.9m loss | Loss narrowed |
| Cash used in operating activities | €11.6m | €42.4m | Outflow reduced |
Revenue growth was driven chiefly by Mexico (+61.1% to €73.3m) and Spain (+26.0% to €75.7m). Online casino wagering revenue increased to €89.5m from €57.3m; sports betting revenue rose to €72.2m from €58.5m. Spain generated positive EBITDA of €13.3m, while Mexico remained loss-making at €11.6m negative EBITDA; Colombia and Other Operations also reported negative EBITDA.
Operating expenses were €176.4m, up 2.8%. Marketing expense fell 15.0% to €75.1m, while gambling taxes rose 41.2% to €16.3m and professional services and other expenses rose 19.9% to €59.2m. The €6.5m income tax benefit, including recognition of deferred tax assets, helped reduce the net loss; FY2023 remained loss-making. EBITDA is a non-IFRS measure and should be considered alongside IFRS results.
Cash, debt and liquidity
- Cash and cash equivalents were €41.3m at year-end, down from €53.8m; €5.2m was reserved for customer balances.
- Working capital was positive €13.2m, down from €25.6m. Equity was €21.3m, compared with €24.5m.
- Current borrowings were €5.1m, primarily short-term related-party debt; the filing reports no non-current borrowings at amortized cost. Separate non-current warrant liabilities were €0.4m.
- Trade payables and other current liabilities were €47.0m, including €7.6m in customer virtual wallets. Operating cash outflow improved, but remained negative. Investing cash outflow was €0.2m and financing cash inflow was €1.3m.
- Management said cash on hand and expected operating cash generation should cover anticipated obligations and working capital needs for the next 12 months, while cautioning that profitability and future liquidity are not assured. No quantified FY2024 guidance is provided in the filing text.
Changes, outlook and key risks
Management described a shift from prioritizing growth toward profitability and sustainable operations, while continuing to invest. FY2023’s narrower losses and lower operating cash burn came alongside strong revenue growth, lower marketing expense and increased professional and gambling-tax costs. The filing reports no material capital expenditures or divestitures in FY2023.
- Controls and reporting: Management concluded disclosure controls and internal control over financial reporting were ineffective at December 31, 2023. Three previously identified material weaknesses were considered remediated, but the weakness concerning controls supporting effective financial reporting remained. The filing was late; Nasdaq continued listing subject to a filing deadline, and the report says ongoing compliance would be monitored.
- Auditor changes: EY declined reappointment; Marcum later resigned, citing inability to obtain sufficient audit evidence amid third-party IT control deficiencies and insufficient internal controls. MaloneBailey audited FY2023 and issued an unqualified IFRS opinion. The auditor was not engaged to opine on internal-control effectiveness.
- Licenses and regulation: The business is exposed to changing gaming rules, advertising limits, responsible-gaming requirements, taxes, sanctions and license-renewal risk. Mexico operations rely on the Codere Group’s LIFO license, which expires in 2027; litigation over Mexico’s 2023 gaming decree was pending appeal as described in the filing.
- Related-party dependence: Reliance on Codere Group services, technology and brand creates continuity, cost and governance risks. Codere Newco held about 65.7% of ordinary shares as of March 31, 2025.
- Market and operating risks: Sports-betting outcomes can cause short-term margin volatility; the company also cites competition, currency movements, economic and political uncertainty, cybersecurity, fraud, data protection and the Israel-Hamas war’s potential effects on staff and operations.
- Unusual items and contingencies: FY2022 included a €0.744m pre-tax charge from vendor-impersonation payment fraud; only a de minimis portion had been recovered at the time described. In 2023, Spanish gaming regulator sanctions were imposed; the filing states each €125,000 sanction was reduced to €75,000 for prompt payment and acceptance of liability. The filing says estimated legal and regulatory liabilities were not material, but outcomes remain uncertain.
Important facts for investors to verify
- Whether FY2024 and subsequent results show continued reduction in operating cash burn and progress toward sustainable profitability.
- Remediation and independent testing of the remaining material weakness, and timely completion of future SEC filings.
- Status of Nasdaq continued-listing compliance and the latest auditor’s assessment of audit evidence and third-party platform controls.
- Renewal and legal status of the Mexico LIFO license, and the effect of taxes or regulatory changes in key markets.
- Cash availability, related-party balances and service arrangements, including the company’s reliance on Codere Group.
- Potential dilution from warrants and the long-term incentive plan; the filing reports no expected cash dividends in the foreseeable future.