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Working-class neighbourhood in Madrid wins 'El Gordo' lottery

UNEMPLOYED Spaniards in a highly indebted commuter town in the outskirts of Madrid celebrated with joy after sharing the top prize in "El Gordo", the world's biggest lottery.

The 200-year-old Christmas draw doled out more than €2.5bn in prizes, with a top individual prize of €4m. The smallest ticket, known as a "decimo" wins a tenth of the prize and costs €20.

Millions of Spaniards living through tough economic times had hoped to pocket part of "The Fat One" although spending in the Christmas lottery dipped heavily this year.

Winning in 2012 was particularly sweet, not just because Spain is suffering its second recession in three years and one in four of the workforce is jobless, but also because 2012 is the last year winners will pay no tax on their takings.

Spain's centre-right government, which has introduced austerity measures this year to shrink its public deficit, ruled that from next year those who win over 2,500 euros will pay 20 percent to the state.

Javier Hernando, a middle-aged owner of a bar in Alcala de Henares, 35 km northeast of Madrid, said the prize would allow him to look at life differently, as European authorities press countries on the periphery of the euro zone to raise the age of retirement.

Luis, a 28-year-old unemployed electrician, said he would spend the money on buying a flat.

The lottery tickets are sold in thousands of official kiosks across Spain and local bars and shops often sell decimos. This year over 27 million individual prizes will be awarded.

The lottery, which dates back to 1812, is an important Christmas tradition in Spain, with many families, offices and bar regulars clubbing together to buy a full ticket for 200 euros.

Sales dipped 8 percent this year to €2.47bn compared to a 0.5 percent drop in 2011.

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"It is no wonder that sales have gone down taking into account the economic situation we are going through. We are in crisis, people are out of work and have no income," said a spokeswoman for the National Lottery.

Those who did not win big in El Gordo can look forward to the El Nino lottery on January 6, or Epiphany, when Spaniards traditionally give presents to children. That lottery will award €840m, though winners will have to pay tax.

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