Spanish city coming up in postcode lottery (6)
I believe the answer is:
toledo
'spanish city' is the definition.
(city in Spain)
'coming up in postcode lottery' is the wordplay.
'coming up' shows that the letters should be reversed in order.
'in' indicates a hidden word.
'odelot' is hidden within 'postcode lottery'.
'odelot' in reverse letter order is 'TOLEDO'.
(Other definitions for toledo that I've seen before include "To dole out in the Spanish city" , "Spanish city famed for swords" , "Sp. city, former Visigoth and Castilian capital" , "Spanish city noted for swords" , "Span. sword-making city" .)