Wednesday, May 13, 2015

Spanish lottery tickets and money laundering

Until recently, Spanish lottery winnings were not taxed, which made them an easy target for money launderers. The way it worked was like this: dirty money goes and buys lots of tickets. For example, the payout ratio is about 70% for the Christmas lottery, the dirty money has been converted into a set of winning clean lottery ticket.

Other strategies involve people buying tickets from the winners (a felony in Spain, up to six years in jail, don’t ever sell your lottery ticket to anyone).

This has let to some amazingly “lucky” people, like ex-Castellon president Carlos Fabra, who managed to win the lottery ten times in the last twelve years, winning them an estimated 3.6 million euros.

Each year Spaniards spend around a billion euros just for the Christmas lottery alone, so it’s not impossible that this wouldn’t have been noticed, if Fabra hadn’t been so open about it.

Now that lottery winnings are taxable, it’s not as an attractive a method anymore.

1 comment:

Saturday Lotto Results said...

The same situation for countries where you don’t pay any tax on the win at all. These countries pay out a lump sum immediately, tax-free, to all lottery winners:
New Zealand
United Kingdom.