Spain is pushing ahead with a plan to privatise the country’s state lottery in a sell-off that will transform one of its oldest national traditions into the world’s largest stock market listed gambling company worth as much as €25bn ($35.2bn).
The planned stock market listing of 30 per cent of Loterías y Apuestas del Estado, organiser of the country’s El Gordo, or the Fat One, Christmas lottery, is part of a planned multibillion-euro sale of public assets to slash government borrowing by a third this year.
Spain’s socialist government, which suffered its worst defeat in the post-Franco era in this week’s regional elections amid protests in city centres, has also said it will sell 49 per cent of the state airports authority that controls Madrid and Barcelona airports to raise an additional €8bn.
The planned autumn sale of the state lottery, which traces its roots back 199 years to Spain’s first modern lottery draw in Cadiz, is expected to raise between €6.5bn and €7.5bn. If completed it would create Europe’s most valuable listed gaming group and the biggest Spanish offering on record.
Millions of Spaniards play the lottery each year, attracting revenues of €9.8bn on an average spend of €210 for each member of the population in 2009, or €77.36 each after prizes of €5.9bn.
The thousands of prizes paid out in last Christmas’ El Gordo, or “Fat One”, lottery – including top rewards of €3m – came at a time when 22 per cent of the adult Spanish population are registered as unemployed.
Loterías, which was established in its current form in 1985 by royal decree to unify Spain’s various state gaming enterprises, reported a net profit of just under €3bn in 2009, with €2.92bn going to the Spanish treasury.
At the top end of its estimated value Loterías would be worth more than the top two gambling companies Las Vegas Sands and Sands China, making it the largest in the world by market value.
Madrid is expected to officially announce a bank that will act as financial adviser for the sale this week, officials said, and will later select five investment banks to sell the shares in the company to investors.
Lazard is viewed by company insiders as a favourite to manage the process, with Goldman Sachs, Citigroup and Morgan Stanley among several others that are in the running for other roles, which count among the most prestigious investment banking mandates on offer in Europe this year, according to bankers.
The sale of Loterias comes as several of Spain’s troubled private savings banks, known as cajas, are rushing to attract private investors after the Bank of Spain judged the sector as a whole to need an extra €15bn to cover soured loans made during Spain’s decade-long property boom.
El Gordo, which last Christmas paid out €2.3bn in 1,700 prizes after a number picking ceremony in Madrid where school children sing out the winning numbers, is the largest Christmas lottery pay-out, with an estimated four in five Spaniards purchasing tickets.
Tickets, which have a face value of €200, are frequently split into smaller amounts – often between co-workers, family and friends.
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