I’d love to travel to Spain someday, especially for Christmas. The gothic architecture. Beaches. Tapas. A sanctuary city for abandoned beach inflatables. Museums. The lottery.
Yes, the lottery.
As a longtime opponent of lotteries for many reasons, I’m changing my mind on Spain’s lottery — and not just because it was for $2.4 billion last Christmas.
Why to hate lotteries
Lotteries are used by governments to raise money, though most of the money raised by lotteries doesn’t go back to the states or education — one of the biggest beneficiaries promoted by state lotteries.
They also increase gambling addition, prey on the poor to play more, and have lousy odds of winning. You’ll likely get hit by lightening before winning the lottery.
But the dumb reasoning that “You can’t win if you don’t play,” along with the easy fantasy of what you’d do with the winnings are enough enticement for millions of people.
If you want to become a millionaire, do it the boring way by saving and investing the money you’d spend on the lottery. And if your fantasy is to spend a month in Tahiti drinking mai-tais for days (OK, that’s mine), then save your money and do it.
The point is, whatever financial fantasies you have about winning the lottery can be done on your own. Don’t let the hype of a huge lottery payoff stop you from making money on your own. You don’t need millions of dollars to be happy.
What Spain has right about the lottery
But back to the lottery in Spain. It changes the discussion on lotteries in several ways.
Just before Christmas, the lottery called El Gordo (The Fat One) takes place. What makes it unique is how people buy tickets.
It’s common for people to buy tickets as a group, such as friends, family or workmates. That happens in the U.S. too.
But in Spain, people also buy shares in several tickets. Everyone in a town, for example, buys a share in a specific lottery number.
In 2016, the winning number paid off for 1,650 tickets with the same number in Madrid, earning each buyer $418,000. That’s only $689 million. The rest of the $2.4 billion in payouts went out in 25 million other prizes.
Instead of a few lottery winners splitting $689 million by having the right lottery numbers, the lottery in Spain pays millions of people smaller prizes. More people win. And, sometimes large groups of people win a decent amount of money. Winning $418,000 isn’t the same as winning millions of dollars, but it’s enough to change your life.
If I’m going to play the lottery, that’s the way to play it — better odds of winning a few hundred thousand dollars instead of crazy long odds of winning millions.
1 guy misses out
The lottery in Spain caught my attention when I heard about it on a podcast. It was about an often-reported story in 2012 of a guy in a tiny village in Spain who didn’t buy a lottery ticket in El Gordo after everyone else there did.
The town of Sodeto won the huge first prize of $950 million, giving each person at least $130,000, depending on how many tickets they bought.
Only one person from Sodeto didn’t buy a ticket, missing out on the windfall. The homemakers’ association that sold lottery tickets missed his house.
That’s the guy nobody wants to be. It’s what gets you to cough up a few dollars when your co-worker comes around collecting money for the Powerball drawing. You don’t want to be the guy who didn’t fish out a few bucks for a chance at millions and are watching on the sidelines as your co-workers pour champagne when they win it.
But want a better solution to that scenario? Go to Spain for Christmas. Even if you don’t win the lottery, you’ll have some great memories.