Spanish Gambling Company may be Cleaned out by the Lockdown

FOR years it seemed as if running online betting was akin to printing money but then along came the coronavirus, Covid-19 pandemic and things changed quickly.

Whilst many might expect the lockdown to encourage gambling, the slowdown of economies and loss of income for many means that the online casinos are also not making the money they used to.

British companies were in the forefront of promoting online gaming but at least one company, Codere was quick in following and runs its business in Spain, Italy, Mexico and South America.

With betting shops closed and money tight, it has now received a blow as US giant Moody’s has downgraded its credit rating by two points as it has delayed payment of interest on bonds worth €27 million.

According to the ratings agency, the company faces the reality of the maturity of bonds worth €800 million in the latter part of next year and it fears that the betting company could end up in default as it already has liquidity problems.

Codere has called in a specialist firm of advisers to try to help it renegotiate its debts, but even if its betting shops open within the next few weeks, if there are no significant sporting events for customers to bet on, then cash flow will be more of a trickle.

It is quoted on the Spanish stock exchange, is said to be currently worth €130 million but is now looking for a further €100 million in loans to keep going.

Coupled with the fact that lenders may well be more interested in backing larger enterprises with greater assets means Codere which employs some 12,000 staff could be in trouble.