As a result of Europe’s debt crisis, Spain will sell a 30% stake in the government lottery gambling operation in an effort to generate €14 billion ($18.3 billion).
As recently as last January, the Spanish government denied any plans to part from the lottery. However, on the first day of December, Jose Luis Rodriguez Zapatero, the Spanish Prime Minister, announced the liquidation within the Parliament in Madrid. According to Zapatero, initially, the privatization of 30% will be part of a new Spanish gambling law.
According to Jaime Guardiola, Banco Sabadell SA Chief Executive Officer, “We’re seeing the government announcing things that, certainly a few months ago, it was unthinkable that they would announce… This is going to be the day-to-day reality of this country because of this external pressure.”
Loterias y Apuestas del Estado, the Spanish lottery, has shown a growing profit, rising 3.5% to €2.99 billion in 2009. As a result of €9.84 billion in sales, €2.92 billion were generated for the Treasuring.
An anonymous finance minister has suggested the Spanish government is currently negotiating with both the gambling industry and diverse regional governments to complete a bill by the end of the year which will legalize online gambling in Spain. Loterias y Apuestas del Estado’s privatization may be contained within this bill.
A Shore Capital analyst from Liverpool, United Kingdom, Karl Burns, suggests the 30% stake may be valued between €4.5 billion and €9 billion, keeping with the worth of other European internet gambling firms. He declared “If Spain were to approve online gambling, that brand could be quite valuable, because they could cross-sell customers.”
Zapatero, a member of the Socialist party, has declared he will take any required steps to save Spain from the worst economic crisis in 60 years. Spain will also sell a stake within their airport operating business and terminate a jobless benefit. Because of similar financial pressures, the Greek government will finally privatize the Greek lottery and sports betting monopoly OPAP.