Millions of people were glued to TV sets as children from a Madrid school that used to be a home for orphans picked wooden balls bearing the winning numbers and prizes out of two giant golden tumblers and then sang them out in a live draw lasting over three hours.
Television reporters rushed to towns and villages across the country to capture scenes of winners breaking open champagne bottles inside bars or celebrating by singing and dancing in the streets.
Unlike other big lotteries that generate just a few big winners, Spain's Christmas lottery aims for a share-the-wealth system rather than a single jackpot, and thousands of numbers yield at least some kind of return. It is known as "El Gordo" in Spanish, or the "Fat One."
Prizes range from the face value of a 20-euro ($27) ticket — in other words you get your money back — to the top prize of 400,000 euros ($550,000) which this year went to the number 62246.
A total of 1,600 "decimos" with that number were put up for sale. A decimo is a stub for the tenth of the price of a 200-euro full ticket.
But this year winners will get slimmed down prizes as a new austerity tax takes a bite for the first time.
A 20-percent tax will be slapped on all winnings above 2,500 euros, meaning the holder of a winning decimo will pocket just 320,500 euros.
A winner of one of the second prizes worth 125,000 euros was sitting in the front row of Madrid's Teatro Real opera house where the draw was held when the winning number 79712 was sung out.
"I bought the decimo at a gas station last week because I liked the number," Jesus Lorente told reporters as he held up his smart phone with a photo of the winning decimo, his hand trembling with emotion.
Lorente, a 27-year-old hotel worker from Spain's Canary Islands who was wearing a red Santa Claus hat, said he would use the money to pay off his mortgage.
The tax on this year's Christmas lottery prizes will generate 188 million euros for state coffers, according to tax inspectors union Gestha.
As in other years the Spanish government, which has launched tough economic reforms to stabilize the public finances, will also get 30 percent of the revenues from ticket sales, less the running costs, meaning the state will collect around 900 million euros from the draw.
Spending on the Christmas lottery has fallen each year since Spain's property-led economic boom collapsed in 2008, sending the jobless rate soaring to 26 per cent.
Each Spaniard spent an average of 49.99 euros on the draw this year, down from 59.92 euros in 2009, according to state lottery operator Loterias y Apuestas del Estado (LAE).
Total sales were down this year by 4.2 percent to 2.36 billion euros.
Spaniards often choose lottery numbers matching significant dates.
Among the most sought after numbers in this year's draw is 28213, after the date when Benedict XVI resigned as pope — Febr. 28, 2013 — and 24713 corresponding to the July 24 train derailment in the northwestern city of Santiago de Compostela that killed 79 people.
The Christmas lottery has been held uninterrupted since 1812. Even Spain's 1936-39 Civil War did not shake its grip, as each side held its own draw during the conflict.
It has become an important Christmas tradition in Spain, with friends, co-workers and bar regulars banding together to buy tickets.
Although other draws around the world have bigger individual top prizes, Spain's Christmas lottery ranks as the world's richest for the total sum paid out.