Spain: Treasury increases revenue from state lotteries as Sánchez pursues online gambling

In five years, profits have totalled 12,196.3 million. It is by far the most profitable of the network of public companies controlled by the central government. In fact, in the last five years, Selae's turnover only suffered in 2020, as a result of the standstill caused by the Covid pandemic. That year, the revenue of Loterías y Apuestas del Estado fell back to 7,667.8 million, 1,600 less than it had reached in 2019. But it was a one-off blip. And, even so, the State obtained with this public company a net profit of 1,940.57 million euros.

In the case of state-owned public companies, the net profit is the same as the gross profit, because what they pay in corporation tax remains in the same hands: the Treasury. This is why, in this case, when talking about the income generated by Selae, the pre-tax result must be taken into account. This amounted to 2,657.66 million euros in 2022, according to the latest annual accounts recently filed with the Mercantile Registry. In 2021 it was 2,591.08 million euros; the aforementioned 1,940.57 million euros in 2019; 2,638.24 million euros in 2019 and 2,368.72 million euros in 2018.

Selae is a safe bet for the State. Its profitability ratio is very high: practically 30% of its turnover translates into net profit for the Treasury, either through corporate income tax or net yield (after tax). Thus, in 2022 this ratio was 27%; a year earlier it reached 28%; and in 2020, despite the Covid hiatus, it was 25%.

Rising sales

The commercial success of the lotteries and bets sold by the State is evident: from the €9,000 million it earned from sales in 2018, it has risen to the €9,687 million it pocketed in 2022, according to the latest profit and loss accounts presented by Selae.

Staff costs, meanwhile, have been contained. In fact, it can be said that they have remained frozen for the last five years, with very slight fluctuations: 30,608 million euros in 2018, 29,957 million euros in 2020 and 30,664 million euros during the last financial year.

However, it must be borne in mind that a substantial part of Loterías y Apuestas del Estado's operating costs are due to its network of external agents, the points of sale with which it has agreements for the marketing of its products. Even so, these external network expenses are very modest in comparison with the volume of revenue recorded by this state-owned company. For example, last year Selae's expenses for external services - which includes both collaborating establishments and other cost items - amounted to 858.5 million euros, 54 million more than in 2021, but after having increased the sale of state lotteries and bets by almost 300 million euros.

Forecasts for 2023

For 2023, the Government forecasts that Loterías y Apuestas del Estado will have a total sales turnover of 9,172 million euros and that, once expenses have been deducted, this will translate into a profit for the Spanish Treasury of 2,472 million euros between the net result of Selae and what this company pays in corporation tax. However, in view of the forecasting errors that the government has been making in its forecasts for Loterías, it is more than likely that the result will be greater than it calculates.

In 2022, for example, the Executive expected Selae to have a turnover of 8,797 million euros, and ended up making 9,687 million euros; and it forecast total profits for last year of 2,400 million euros, and ended up making 2,657.66 million euros, almost 260 million euros more than it had forecast.