After the investment that the Government of Pedro Sánchez has just committed to buy 10% of the capital of Telefónica, the state portfolio of shares of 9 multinationals exceeds 27,000 million euros. However, there is one state company that, if listed on the stock market, would be worth more than all of them together alone. The most valuable business owned by the State is Loterías y Apuestas (SELAE), organizer of the El Gordo de Navidad raffle which is celebrated this Friday, December 22 and accounts for a third of its annual sales.
The stock market valuation of 100% of Loterías could reach 40,000 million euros based on average multiples of profits, EBITDA or annual sales of operators that are already listed on the stock market, such as the French La Française des Jeux or the Australian The Lottery Corp. Specifically, according to the data collected by ‘La Información’, if annual sales are taken into account, the Spanish company owned 100% by the State, and attached to the Ministry of Finance, the capitalization of the group chaired by Jesús Huerta would be at 26,999 million applying a multiple of 2.8 times on the income declared in 2022.
In the case of considering the benefits, Loterías y Apuestas would reach its highest valuation with 57,225 million euros, with an average multiple of 28 times and taking into account that it earned 1,993 million last year. The figure multiplies several times the 373 million estimated annual profit of La Française des Jeux – which is trading at 17.4 times its profit – or the 270 million of The Lottery Corp (40 times its profit). Finally, the EBITDA multiple – more common in company securities – would result in a stock market size of 37,470 million, applying a multiplication of 14 times the average of the two aforementioned operators.
In any of the stock market valuation assumptions, Lotería would easily enter the ‘top 5’ of the Ibex 35 by size with those 40,000 million of the estimate. Only Inditex (120,000 million), Iberdrola (74,900 million), Santander (61,000 million) and BBVA (48,700 million) would remain ahead of the lottery giant. With 100% of the shares in public hands, Loterías would multiply by three times the value of the 51% stake that the State controls in the airport manager Aena and would represent eight times more than Caixabank’s 17.3%.
A ‘dividend’ of around 3 billion each year
But the real prize that it receives from the State for its activity in the gambling sector is the annual income that Lotería y Apuestas (SELAE) makes to the Public Treasury in the form of dividends and taxes and which is usually around 3,000 million euros each year. . , on sales that in 2022 reached 9,686 million, 3.5% more than in fiscal year 2022, according to company data.
However, Lotteries increased its contribution to the Treasury last year to 3,486 million euros accrued to the Public Treasury, 19% more than the 2,926 million in 2021, “because a partial return of the issue premium on shares has been made. import of 1,000 million euros, with the return made in 2021 being 500 million euros”, as explained by SELAE in its report.
This type of payment seems like a dividend although it is not, since it is free of tax withholding although in the future the shareholder (State) should be taxed for this operation if they sell the shares. Logically, with the treasury being the controlling partner, everything remains at home. In addition, SELAE distributed 6,148 million euros in prizes during 2022, a figure that also suffers a tax burden on its non-exempt amounts.
The jewel of the State’s ‘Heritage Group’
Loterías y Apuestas (SELAE) belongs to the General Directorate of State Heritage (DGPE), under the Ministry of Finance of María Jesús Montero, which has the responsibility of supervising a series of unusual companies that are under its orbit. Although SEPI is in charge of the best known, Loterías belongs to the so-called Grupo Patrimony, to which Paradores (tourism), 50% of Cesce (finance and insurance) or Enisa, the agency known for participatory loans to startups and companies, belongs. . innovative.
Patrimony describes them on their website as companies without strategic autonomy, which are part of the ministries and do not have total independence in their management like other invested companies: “These companies act as flexible tools to carry out specific public policies or as instruments at the service of the strategies of the Departments to which they are functionally linked.”
SELAE has less than 500 employees and is a ‘cash-flow’ generation machine, one of the metrics preferred by investors to analyze any company. In 2022, its gross result was 2,657 million euros, the net result was 1,993 million and its financial expenses barely represented 363.00 euros. Lottery and Betting personnel expenditure stood at 30.6 million euros (an average of 62,900 euros per employee), which is the highest paid position in the Administration. Huerta Almendro charges 223,000 euros gross annually.
Loterías y Apuestas remains the largest operator in the gaming sector in Spain with a share of 36%, according to the Cejuego yearbook, followed by the National Organization of the Spanish Blind (ONCE), which is second with 11% of the total. In 2022 it far exceeded the drop in pandemic numbers and rose to all-time highs. The star product of the state gaming company is about to launch this Friday, like every December 22.
The Christmas Lottery Jackpot draw accounts for 32.8% of SELAE’s sales, around 3,180 million last year (+5% year-on-year). It is a business four times larger than that generated by the Bonoloto, 23 times the Football Lottery or more than twice in the case of Primitiva or EuroMillions. The traditional Christmas raffle is, in itself, a jackpot for the public coffers after 210 years of history. According to data from the consulting firm Kantar, the event mobilizes 65% of the adult population.
Lotería y Apuestas declares 10,914 official points of sale for its tickets throughout Spain, which generate almost 12,000 indirect jobs that must be added to the fifty people on staff. In 2022, it paid 738 million euros in net commissions to its commercial network, which includes both the classic dedicated administrations and mixed-type stores such as stationery stores and bars that have lottery vending machines. In addition to taxes, prizes and salaries, the gaming company made a contribution of 25 million euros to social fines from which more than a million people benefited, according to its calculations.
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