20-F: Codere Online Establishes Platform and Technology Services Agreement with Codere Group

Codere Online formalizes a service agreement with Codere Group for platform and technology services, outlining fees, responsibilities, and terms for their ongoing collaboration.

Summary

• Codere Online has entered into a Platform and Technology Services Agreement with Codere Group, effective January 1, 2023.
• The agreement outlines the provision of platform and technology services by Codere Group to Codere Online for its online casino and sports betting operations.
• The services include IT, trading, and customer support, with specific details outlined in Schedule A of the agreement.
• Codere Online will pay Codere Group a fee based on the cost of services plus a markup, with the 2023 fee set at €12,046,916.
• The agreement includes provisions for amending the scope of services, discontinuation costs, data protection, intellectual property rights, and termination conditions.
• A steering committee will be established to oversee the annual budget, monthly fees, and implementation of services.
• The agreement is governed by the laws of Spain, with disputes to be settled in the courts of Madrid.

Sentiment

Score: 7

Explanation: The document is a standard business agreement, suggesting a neutral to slightly positive outlook for the company's operations.

Positives

• The agreement provides Codere Online with access to Codere Group's platform and technology services.
• The agreement allows Codere Online to amend the scope of services and use third parties, providing flexibility.
• The agreement establishes a clear framework for fees and responsibilities.
• The agreement includes a mechanism for resolving disputes.

Negatives

• Codere Online is dependent on Codere Group for platform and technology services.
• Codere Online is subject to discontinuation costs if it terminates the agreement or reduces the scope of services.
• The agreement includes limitations on liability for Codere Group.

Risks

• Disagreements on the Annual Budget may arise between Codere Online and Provider.
• Codere Online is subject to discontinuation costs if it terminates the agreement or reduces the scope of services.
• The agreement includes limitations on liability for Codere Group.
• The trading manager of the Provider may suggest any strategy that can benefit the Companies in reaching their goals, however, Codere Online shall be the only Party entitled to decide and instruct the Providers trading manager, which trading strategy to apply, including, without limitation, instructions with regards to promotions, bonuses, and risk management.

Future Outlook

The agreement outlines a framework for ongoing collaboration between Codere Online and Codere Group, with annual reviews and potential amendments to the scope of services and fees.

Management Comments

• CDON and SEJO, acting jointly, and at their sole discretion, should be the only ones to decide, define and instruct the Provider or its trading manager, which shall be the pricing and risk policy to apply at all times.
• The trading manager of the Provider may suggest any strategy that can benefit the Companies in reaching their goals, however, Codere Online shall be the only Party entitled to decide and instruct the Providers trading manager, which trading strategy to apply, including, without limitation, instructions with regards to promotions, bonuses, and risk management.

Industry Context

This agreement reflects the trend of online gaming operators partnering with established technology providers to leverage expertise and infrastructure.

Comparison to Industry Standards

• Comparable companies in the online gaming industry, such as DraftKings and Flutter Entertainment, often outsource or partner for technology and platform services.
• The financial terms of the agreement, including the cost-plus markup, are typical in service agreements within the gaming sector.
• The exclusivity clause and termination conditions are standard in such agreements, providing both parties with certain protections.

Related Party Transactions

• The document details a related party transaction between Codere Online and Codere Group.
• The agreement outlines the terms for platform and technology services provided by Codere Group to Codere Online.
• The agreement includes provisions for fees, responsibilities, and potential conflicts of interest.

Stakeholder Impact

• Shareholders: The agreement provides clarity on the relationship between Codere Online and Codere Group.
• Employees: The agreement may impact the roles and responsibilities of employees involved in platform and technology services.
• Customers: The agreement aims to ensure the continued provision of online gaming services.
• Suppliers: The agreement may impact relationships with third-party suppliers of technology and platform services.

Next Steps

• Codere Online and Codere Group will establish a steering committee to oversee the implementation of the agreement.
• The parties will negotiate and agree on the type, nature, timetable, specifications, parameters or terms and conditions of future services to be provided by Provider to Codere Online in the subsequent year.
• Codere Online will monitor the performance of Codere Group in providing the services.

Key Dates

Keywords

platform services, technology services, online gaming, sports betting, Codere Online, Codere Group, agreement, services