Having a Lottery administration has always been seen as a safe business with which a lot could be earned, simply by being lucky enough to have a license. The reality is that this is not the case and in fact many lotteries barely survive, since in addition to having commissions frozen for more than 20 years, the government prevents them from collecting prizes of more than 2,000 euros. In short, less income and more expenses.
José Pastor is the owner of a lottery administration and in an interview for the Adrian G. Martin explains the reality of having a Lottery administration in Spain. This explains the frozen commissions to which we must add the great competition that is multiplied with mixed points and internet sales.
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“Many believe that having a lottery administration means living well,” he says. “But this is no longer a profitable business. We live for the State and with commissions that are a joke.”
To better understand the problem, this summarizes it in a simple sentence. “From a tenth of 20 euros we have ninety cents left. Everything else goes to the State. And from there we still have to pay rent, self-employed workers, security and employees.” He speaks naturally, but also with obvious fatigue.
“From a 2.5 euro EuroMillions ticket we only win 10 cents”
The lottery emphasizes that all its profit comes from commissions and that there is no other source of income. “At Christmas the commission is around 5%,” he explains. “But in many games we don’t even get there. He also gives the example of the EuroMillions, where a 2.5 euro ticket barely leaves ten cents. And on top of that they demand the highest level of security from us.” Armored glass, a certified alarm system, cameras and a special safe. “Everything is worth money. A lot of money. And while the mixed points don’t need any of this.”
Mixed points are bars, tobacconists or stationery stores that sell lottery tickets without assuming the security costs that are imposed on traditional administrations. “They charge the same as us,” he insists. “And on top of that they have another business with which they compensate. We don’t.”
Pastor explains that the situation that many colleagues share. “The State lends you a million in tenths. If you don’t sell it, you return it. If you lose it, you pay it. There is no option. There is no apology. There is no one to back you up.” He states that any administrative error, any late return or any incident is paid for out of pocket. “We work for the Treasury, but without conditions or support.”
The pandemic made this imbalance clear. “Many had to request ICO credits to pay for paper, payroll or electricity. It was either that or close. And even so we continued to enter everything collected into the State.”
“Internet sales and apps are taking away our bread”
In addition to cost and responsibility, competition is growing. “Before there was one administration per neighborhood. Now there is a mixed one on every corner.” The lottery also points out the rise of digital sales. “Every so often a new application comes out. Some distribute sales among a limited group of administrations. The rest of us are left out.”
The physical business loses power, while purchasing habits change. “Young people no longer come to the counter. They buy everything on their cell phones.” “Setting up an administration costs more than 50 thousand euros. And a transfer can reach 400,000 euros.”
The owner explains that opening an administration requires adapted premises, level 3 security and endless obligations. “With less than 50 thousand euros you don’t start.” Transfers depend on billing. “An administration with 140,000 euros in commissions is transferred for 400,000. But that does not mean that you earn that money. It means that it is what it produces.”
Even so, the margin remains slim. “You’re not going to get rich. You’re not going to have a Ferrari. You’re going to live. Hopefully.” “The future is uncertain. Administrations are going downhill”
“Lotteries puts more pressure on us every year. We don’t have a strong association that defends us. Each one goes on their own. The mixed ones all go together. We don’t.” The paradox is evident. “We sell enthusiasm,” he says. “But we survive on pennies.”