ONLAE privatization

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Spain, has for years an organization known as ONLAE and that it has achieved a profit of almost 3,000 million euros per year.

Many people think that it is not so good to defend ONLAE or at least to defend that it should be a public service that the State can ensure, which it does many people bet on the privatization of ONLAE.

Según las persons que hablan a favor de su privatización, son muchos los problemas que tiene que ofrecer el Estado antes de poder enfocarse en el tema de juegos como la lotería: salud, seguridad, justicia del país, etc. ONLAE como algo que ofrece el país no es una de las apuestas más acertadas según los españoles.

Does it make sense to privatize?

For most people, going private is the best option. However, before giving the definitive yes, we are going to take a short tour of certain points that we must first understand in order to reach a just and appropriate conclusion for all.

The ineffectiveness of the public sector. In most forums and debates, it has been said that it is not effective for the State and does not bring improvements to the public sector, despite everything, the figures that are handled with ONLAE are much higher than those that can be obtained with any Spanish company, not only in the gaming sector, but in any field.

At first glance, it seems overwhelming, but the reality is that The figures are so high because ONLAE, being from the State, does not pay taxes.

The real chaos of the matter is that they are trying to market a company that is generating a lot of money for the country and that is truly increasing even in the years of greatest crisis. Here, The question would not be whether or not to market State Lotteries, but at what price should it be sold?

How long does the government wait privatize the State Lotteries

The current government is only thinking of privatizing the 30% of the State Lotteries at 5,000 million, which makes the total value of the company exceed 15,000.

Is it favorable?

The sale can be favorable if the government manages to place the company at a very good price, even above that amount. If the company gives up and surrenders for a lower value than it has in the market, this can make it seem like a clear loss for today's investors, which is all of us, since we would be earning much less for the country but it would have to invest much more.

Let's do some calculations together to find out if we really It is an improvement to privatize State Lotteries or on the contrary it is another mistake of the government.

The people who are going to buy ONLAE are at this time two simple questions: what is the amount of money to be paid and what is the amount of money to be received.
Let's suppose that you are an investor and you have 5,000 million to spend and you decide to invest in ONLAE.
Those 5,000 million only give you access to the company's 30%. Assuming that the company continues to earn as before, it is assumed that with a 30% you could earn up to 900 million a year. We are talking about a profitability of the 20% always taking into account the currency exchange and that the benefits increase every year. The profitability of the company's 30% is basically huge.

If we look at how some see that those 5,000 million euros will go to the coffers or to the solvency of the government, we can also make a note on this issue. Suppose the government sells the 30% from state lotteries and all of a sudden you win $ 5 billion. We are losing, for more than 10 years, the amount would double with that 30% that is sold, so we can use the famous phrase "bread for today and hunger for tomorrow."

We also have to explain that this initiative to privatize ONLAE It had already been done in 2010, but with the change of government it was forgotten and it was not until this year that Rajoy wanted to bring it to the fore again.

The reason it has been resumed is because many public companies have been privatized to boost the country's economy.

Now let's go to the other side of the coin and see what the position of the people is, if they bet on this sale, what are the reasons for privatizing State Lotteries.

Taking away that millions will be lost in the state coffers, let's say what we think they are 10 reasons why you should go private

The top 10 reasons why we are betting on the privatization of state lotteries are:

• The government, even if it would receive a little less, would still receive a large amount of money from state lotteries, since investors and the company itself would have to pay corporate taxes and at the same time the bets contain VAT.
• All the money received from the privatization of state lotteries would be used to pay off the public debt, which in turn saves the government millions a year in interest and payments.
• The sale or privatization would help reduce the fiscal deficit due to the interest savings that we have mentioned before, which would benefit many Spaniards.
• If the public debt is reduced and the fiscal deficit is also reduced, it is feasible to generate extra savings for the country in payments and, in turn, improve financing conditions for companies and individuals.
• By reducing the risk premium within the country, the risk premium is automatically reduced, which can improve the profitability of investment projects. All these things, not only would avoid a tax increase, but they would be able to lower the current ones.
• By placing State Lotteries on the Stock Market, foreign capital could be injected into the country and made known to the world of the financial market. This would mean more financing for Spanish companies
• State Lotteries, it would never cease to be a Spanish company. Not only will absolute control of the company not be transferred, but investors may be required to always center it in Spain.
• The reduction of VAT, the tax improvement, the lower premium and the increase in investments can lead to the creation of hundreds of jobs in the country.
• If we include all this, we only find one way to justify that the government, still with its cons, wants to privatize ONLAE, since it would be a very quick way to get out of an obstacle that would otherwise cost the government a lot. money and many years.

Among the main responses that the government gives to people who refuse to privatize state lotteries, is that the total control of the company will not be transferred at the same time and it has been divided into sales of the 30%, always remaining the 10% of the country.

This can cause the 30% to sell first and the stock to appreciate in the market in such a way that the price of the next % increases.

As State lotteries are a monopolyIn case of privatization, an extra tax can be applied that can decrease the profits of people who buy bets from the state but would give more money to the country. This has a direct obstacle: many people will not want to invest due to such a tax.
Another alternative would be to increase the VAT on the bets but the winnings would be reduced by 5%.

As conclusion and personal opinion

The sale of State Lotteries is something that has existed since 2010, since it was one of the best alternatives to get out of the crisis. that throughout that time began. The reason is that ONLAE was - and is - one of the most profitable public companies in Spain and a large amount could be obtained by selling only a few points for thousands of shares of the company, but we do not know if it is really beneficial. in the long run.

Why State Lottery Sales Stopped

During 2011, the financial market faltered and did not allow interested parties to choose to buy it as asset prices in Spain plummeted. Even if there were offers, it was no longer worth the sale because they were so low.

Today, this The ONLAE sale operation was put on the table again to obtain rapid financing to achieve all that we have previously exposed. It is intended that the company's income can grow at least to the level before the crash so that it can get the most out of one of the most profitable companies in the country and thus achieve the maximum profit in the event of its privatization. .