Millions are out of work and a recession looms, all the more reason for Spaniards to dig deep into their pockets to gamble on the famous El Gordo (Fat One) Christmas lottery, the world's biggest jackpot, which will make a record payout this year.

Things are tough this year, but I am definitely going to get a Christmas lottery ticket.. even if its just one decimo, said Raquel, a 50-year-old taxi driver. The smallest lottery unit sold is a tenth of a ticket, or decimo, for 20 euros (17.20 pounds).

This year alone the El Gordo Draw will pay out 2.5 billion euros to over 1,202,490 cash prize winners in Spain and around the world. First prize is worth 4 million euros, the highest amount ever and up 33 percent from a year ago. Sales are expected to match last year's despite the economic crisis, said lottery operator Loterias y Apuestas del Estado (LAE).

The tickets, drawn on December 22, are sold in 4,100 official kiosks throughout the country but can also be bought in a further 6,400 outlets such as newspaper kiosks. Local bars and shops also sell decimos.

Even in gloomy economic times, Spain has been battered by the euro zone debt crisis and has the highest jobless rate in the European union, 90 percent of adult Spaniards play the Christmas lottery pooling money with workmates or friends from the neighbourhood bar.

In the remote northern Spanish village of Sort, which means luck in the local Catalan language, Xavier Gabriel, owner of The Golden Witch lottery outlet, has sold out of El Gordo tickets and is now focussed on the annual January 5 El Nino draw.

We can't close on Saturdays for lunch... We had 200 motorbikes, 500 cars and eight coaches bringing people up here for El Gordo ticket and it was the same thing on Sundays, Gabriel said.

The Golden Witch is the most successful lottery outlet in Spain in terms of sales and sold the winning El Gordo number in 2003.

Gabriel has an established base of overseas clients who buy their Christmas lottery tickets over the internet.

DEFYING THE CRISIS

Becoming a millionaire for Christmas or even having the chance to share in one of the millions of cash prizes is appealing to many Spaniards as they struggle to weather the worst economic crisis in generations.

The Spanish Organisation for the Blind (ONCE), which runs a weekly lottery, sold out in Madrid for its draw on November 11 this year.

Spain's centre-right People's Party stormed to a crushing victory on Sunday over the Socialists whom voters blamed for the country's economic woes.

Prime Minister-elect Mariano Rajoy warned the country, however, that difficult times are coming as the new government tackles a steep public deficit threatening to push Spain towards a eurozone bailout.

Since the Fat One went on sale this year queues have been forming outside some of the most famous lottery kiosks in Spain's capital city Madrid.

I always buy El Gordo at Dona Manolita. They've sold several winning numbers, said 45-year old Maria, currently unemployed, queued up at the kiosk in Puerta del Sol square in central Madrid, also the setting for the Indignados (or Indignant) protests against austerity measures earlier this year.

Some cash-strapped locals have made a beeline for the few outlets where they can use a credit card to buy their ticket.

But there are not many of these outlets in Spain. It's cash in hand, said Juan Gallardo, Commercial Director at the state-owned LAE.

Spain will be glued to radios and television sets on December 22, listening to the monotonous chant of voices of a group of children from the San Idelfonso college, dressed in navy blue and grey uniforms, who sing out the winning numbers and prizes.

It's the only draw where you really have a chance to win something...and you can see it on TV, Raquel the Madrid taxi driver said.

In 2010, El Gordo raised 2.7 billion euros in revenues for the state. Sales fell 0.2 percent in 2010 from 2009.

The lottery is part of the Spanish DNA, said LAE chairman Aurelio Martinez earlier this year at a presentation of the planned sale of 30 percent of the lottery operator. The sale was pulled in September due to tough market conditions.

(Reporting By Judy MacInnes; additional reporting by Blanca Rodriguez)