In the collective imaginary, lottery administrations have always been seen as safe and high profitable businesses, that is, they earned a lot of money. Every year, when the Christmas campaign arrives, millions of Spaniards buy tenths convinced that behind the window there are entrepreneurs who make a box with the illusion of others. In spite of this, the reality is very different, since it is not the business as beautiful as everyone believes and it is a sector with tiny commissions, high expenses and a total dependency of the State.
This is reflected by the Creator of Content Eric Ponce, who has traveled several administrations in Spain to interview its owners. His testimonies draw a panorama far away from the buoyant business idea. “Of each tenth of 20 euros, the Lotero barely stays with one euro. The rest, 19 euros, goes directly to the state coffers.”
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“With the Christmas campaign you have to cover all year”
Loteros explain that commissions barely give to survive. The Christmas Lottery, the star raffle, only leaves 5% gross commission for each tenth sold, that is, if the tenth costs 20 euros, they take 1 euro. This translates into a real benefit lower than the euro, a ridiculous figure if taxes, the cost of the premises, payrolls and management expenses are taken into account.
“The Christmas draw is the one that makes the difference. If you do a good campaign you can cover the rest of the year, but if you go wrong, you enter losses and you have to borrow,” acknowledges a lottery interviewed in Rubí, which came to distribute a prize of 34 million euros without winning a euro for it.
Not only that, but not even the large awards provide extra income. “Formerly, you could pay much more in the window, now they have limited us to 2,000 euros,” explains one of the interviewees. Everything that exceeds that figure must be charged in a banking entity, which leaves the administrations of the possibility of commissioning for those payments. “Not even with higher awards of 5,000 or 6,000 euros commission the State,” they regret, which means another cut in margins that were already minimal.
“Today is not a good business … 20 years have not uploaded the commissions”
The testimonies agree that profitability is minimal and the very high risk. The Lotero works with his own money, entering weekly to the State Lotteries everything sold and responding with his assets of what has not been returned. “If you lose a tenth or do not return it on time, you pay it from your pocket. There is no forgiveness here,” says one of the interviewees.
In addition, they remember that the commissions have been frozen for two decades, despite inflation and the increase in the cost of life. “20 years have not uploaded a cent. In practice, every year we lose purchasing power. It is a slave and not very profitable business,” says another owner.
To economic difficulties is added the competition of online sale and mobile applications, which are especially attracting the young public. Although some administrations have managed to adapt, most recognize that this subtracts clientele in the window and makes it even more difficult to keep the business.
“They tell us that we are entrepreneurs, but we actually work for the State. They stay with everything and we assume the risks. There is no support, even when there are catastrophes such as Dana or Pandemia. Then we borrow with ico loans to pay salaries and rental,” they remember.
Is it profitable to open a lottery administration?
The conclusion is clear: living a lottery administration is possible, but it is not a profitable business. The future, they point out, is more at the mixed points – bares, watertight or stationery – that sell lottery as a complement, since they have other sources of income.
“An administration gives you to live, but not to make you rich. If you open to buy a Ferrari or an apartment in Ibiza, you are wrong. With luck, you will cover expenses and you can have a decent salary,” conclude the interviewees.
Despite Christmas lights and the illusion generated by the draws, the reality of those who sell luck is much more gray: endless days, frozen commissions and a profitability roof that, far from giving fortune, barely guarantees subsist.