Friday, December 23, 2011

The biggest winner was the State

To Spaniards the chance to win a small fortune on the Christmas lottery is just too much of a temptation. They spent 2.7bn Euros, an average of  57 Euros each on tickets this year in the hope of winning one of the prizes which totalled almost 2bn Euros.

There was one first prize of 4m, a second prize of 1.25m a third prize of 500,000, two fourth prizes of 200,000 and eight fifth prizes of 60,000 Euros. In all, including the minor prizes, 27 million people would have benefited from Thursday’s draw.

Most people do not buy a whole ticket which is divided into ten parts costing 20 Euros each.  In fact many share the cost of a 20 Euro decimo so that they can have a range of numbers. If you had one 20 Euro decimo with the winning number on Thursday, you would have won 400,000 Euros.

The biggest winner though was the state which kept 30% of the money spent on El Gordo. One billion Euros represents 0.1% of GDP or 1% of this year’s budget deficit target.

Still that would not have concerned the residents of Grañén in the Huesca province where the decimos of the winning number were sold. Apparently, one lucky person bought 4 decimos just hours before the lottery shop closed. Eighty Euros is a lot to spend on such a risk but it paid off this time with a prize of 1.6m Euros.

For the unscrupulous ones, there is even a chance to make more.  Because Spaniards don’t pay tax on the winnings, the lucky ones are often offered extra by those wanting to use the tickets as a way of laundering money earned in the underground economy. “Black money” is thought to account for 17% of Spain's GDP.

1 comment:

Charles Smythe said...

Just goes to show that lotteries are nothing more than a tax on the poor. And it is the poor who fall into the trap of buying the tickets weekly. After all, those wealthy enough not to dream about winning such easy wealth don't play so frequently, do they?

And the equivalent of 17% that you quote is much lower than believed... almost two years' ago figures of 23,3% were cited:

That figure is most certainly much higher now.