Spanish Gambling Operator Codere Moves To Melilla To Save Taxes
Gambling operators try to establish themselves in tax friendly zones in order to get a break from high gambling tax laws. This is exactly what Spanish gaming operator Codere has done by making a move to the enclave of Melilla.
The Autonomous City of Melilla is a Spanish enclave near Morocco which is known for its charm. Spanish gambling operator Codere was attracted to Melilla because it only has a 10 percent tax rate on gambling revenue. This is why Codere’s digital sports betting brand Codere Apuestas has moved its headquarters to the city.
Codere is not the only one interested in moving to this tax haven. According to Melilla vice-president Daniel Conesa, four other companies have approached him about making the move. Melilla and its sister city Cueta both offer half the tax rate on gambling revenue than cities that are located on the Spanish mainland. Both Tech and gambling companies will also appreciate the fact that the city has slashed local value-added taxes for tech firms.
Melilla may soon turn out to be the destination of many UK-based online gambling operators. They currently use Gibraltar as their European HQ but Brexit may mean that they will have to move to friendlier shores that will allow for better EU access. This includes Melilla, Cueta and Malta.
Codere IPO May Soon Be Coming
Though Codere is not going to feel the pain of Brexit, the move to Melilla is definitely a good thing for the company. In November 2018, the already debt-ridden gambling company reported a loss of €55 million for most of 2018. This dropped Codere’s share prices from €11 at the start of 2018 to €2.86 by the end of 2019. Since then, share prices have recovered though and are currently at €4.42.
In hopes of a further recovery, Codere has revealed a three-year corporate restructuring plan called Horizon 2021. The plan will cost the company around €200 million. With company coffers bare, there is some talk of the company going public and an initial public offering being floated. However, no solid proposal has been arrived at.
Codere is doing its best to get back in prime shape. In December, Codere renewed its Mexican gambling licenses. This is a good move since its Mexican operations provided 35 percent of its earnings. The company has high hopes about its Latin American presence and thinks that a new sports betting license from Brazil will give it a shot in the arm.