Every month, industry investors Waterhouse VC publish an article that spotlights different aspects of the ecosystem. This month, Tom Waterhouse delves into licence to print.
One of the world's largest lottery markets runs through Spain's neighbourhood shops. In October, Waterhouse VC visited three of them in Madrid, where lottery tickets shared the counter with tobacco and parcels. One owner showed us a printout recording around 1,300 lottery transactions that morning.
Spain’s state operator SELAE sold €10.6bn of tickets in 2025, but less than 3% came through its own website and app. The rest was attributed to its 10,867 authorised retailers, including orders those shops received online. Digital growth can still run through the neighbourhood counter.
We came back convinced these shops have a lasting role. For Waterhouse VC, the opportunity lies in technology suppliers that earn recurring revenue by making those shops more profitable.
SELAE paid its retailers €775m in commissions in 2025. Retailers typically earn 4.5% to 6% commission depending on the game, so technology must pay for itself through extra earnings or time saved.
Lottery, tobacco, an ATM and parcel services at one address. Madrid, October 2026
An Established Habit
Spain’s Christmas draw, best known for its top prize El Gordo, sold €3.55bn of tickets in 2025, a third of SELAE’s annual sales. Each €200 ticket is split into ten €20 décimos, allowing friends, families and colleagues to share a number. Nobody wants to opt out when the office syndicate wins.
At the mixed outlets we visited, owners knew their regulars, who bought tickets and checked results while buying cigarettes or collecting parcels. New services could reach customers through a shop they already trust.
Counter Productive
For a mixed retailer, lottery competes for attention with everything else happening at the counter. Easier ordering, automatic sales records and self-service ticket checking could reduce the work of serving each customer.
Syndicates can bring shops additional sales, but also more administration. Known as peñas, these groups pool money for regular draws and share any winnings. Someone must track contributions and each member’s entitlement; Spain’s consumer organisation OCU advises keeping written records of ownership.
Two owners told us they avoid offering syndicates because of the paperwork. Software that automates parts of the process exists, but feedback relayed to us suggests it still leaves too much of the organising and record keeping with the retailer. A subscription is hard to justify if the shopkeeper still does most of the work.
Letting customers create and organise their own groups could lighten the retailer’s workload. Software would keep the participation records, while an authorised retailer issued the tickets and earned its normal commission. The shop could serve groups it had neither recruited nor organised.
Australia shows how retailers can share in digital growth. The Lottery Corporation launched online store syndicates in 2022, paying the same commission as counter sales. By February 2026, around 80% of its retailers were selling syndicate shares through the platform. Those groups are retailer-created, but the lesson holds: shops need a financial reason to participate.
The same applies to ordinary ticket orders. Moving an existing sale online is not automatically extra income, but online ordering can reach younger customers who are less frequent at the counter, provided the shop still records the sale and earns the commission.
Opening the Network
FENAMIX, the national federation of more than 6,500 mixed lottery outlets like the ones we visited, offers suppliers a route into this fragmented market.
Its February 2026 agreement with Correos Express lets members add parcel services. One commercial agreement opened access to thousands of shops, although each decides whether to take part.
Working through the federation could cut a supplier’s cost of finding retailers and earning their trust. Demonstrations and training could be coordinated across groups of shops, refining the product before wider rollout.
An agreement is only the start. Shops still need to sign up, install the product and keep using it, and the revenue from those that do must cover the cost of winning and supporting them.
Beyond Tickets
The same relationships could also support services that generate income beyond lottery commissions. Parcel collection is one example. In-store advertising is another.
Digital screens could show results and promotions alongside paid advertising, with revenue shared between retailer and supplier. Brands could book campaigns across participating shops through a single platform, and credible audience measurement would help them judge its value.
Advertising could add recurring income alongside software subscriptions or transaction fees, spreading the cost of serving each shop across several services. That depends on advertiser demand, and on revenue covering equipment, maintenance and sales costs while leaving retailers an attractive share.
Customers checking tickets at a lottery outlet in Madrid, October 2026.
What We Look For
Our visit reinforced the appeal of serving Spain’s lottery shops, and the need to prove why owners would adopt another product. We would look for measurable extra earnings or time saved, regular use and an economical route into the network, with recurring revenue that stays profitable after installation and support.
Access also needs to last. We would examine federation and retailer agreements, including termination rights and dependence on SELAE’s sales arrangements, and whether customers stay long enough for the supplier to recover its acquisition and installation costs.
For Waterhouse VC, the opportunity is to build on an established habit and a trusted retail network. Suppliers that make each shop more profitable have a reason to be paid year after year. Operators hold the licence. We’d rather clip the ticket.
