It is a few days after Yom Kippur and the Israeli media is schizophrenic about the gaming industry. There has been another big sale of an Israeli gaming company. Playtika, an Israeli-built company that builds online gaming software for social games like Slotomania, has now bought Jelly Button. Gambling, according to Jewish law is illegal. But gambling — sorry, gaming — makes up for an estimated one quarter of the country’s high-tech revenue. On one hand the country is being compared to a mafia state (read this Times of Israel article) and on the other, Israel’s gaming industry is lauded as a low-profile industry, being backed by educational institutes in Israel.
“Israel’s institutes of higher education are trying to ensure that the country doesn’t lose its edge in the field. In recent years universities and colleges have started 12 academic tracks dedicated to games content and design,” according to an article in Haaretz.
Israel’s gaming industry is touted by the government.
One of Israel’s top 10 richest individuals is Teddy Sagi, who made a fortune from the gaming industry proliferating around the world – thanks to Playtech and the software he and his team created to make it easy for anyone to start their own gambling site. Find any well-known gaming company around the world and many of them have early beginnings using Playtech software. (For the difference between Playtech and Playtika read this article.)
But is gaming just plain bad? It really depends on who is winning and who is losing, I suppose. Israel used to be a bastion for casinos, many of them underground. But a cleanup of the industry has forced those with a gambling addiction, I can surmise, to other realms where they can gamble. One of my neighborhood supermarkets, the biggest in Jaffa, was lost and now shut down according to local rumors – over a gambling bet. The owner lost the best, we lost access to decent eggplants.
So is gambling bad? Yeah, if you lose. Another cousin of mine won $100,000 in the lottery 35 years ago, allowing him to buy a farm and start a great life.
Sheldon Adelson, casino magnate in Las Vegas makes billions on the sadness of others’ losses. But he is also a great philanthropist, giving billions back to society. So is gambling completely bad?
If we look at Israel’s high-tech angel investors like Gigi Levy-Weiss, he made a fortune from the gaming industry and 888, dividends which he now funnels into helping new startups get off the ground in Israel and the West Coast. He gave me some great advice when I was starting my own company.
So is it wrong to enable gambling? Is it wrong to profit from the industry? Is it wrong for Israelis to be involved? A few times I’ve been asked to work at gambling companies, and it didn’t appeal to me because I don’t like gambling, I don’t get motivated by just working for money, and I didn’t really click with the people offering me the job. But I did once work for a startup that was creating a platform for pornography. I wasn’t a partner, but I owned equity in the company and working there was tied to my work VISA in Israel.
We were hungry and desperate and this is what the investors asked us to do when the dream we had couldn’t be made viable. Luckily the porn platform, which could have been the Playtech for porn, didn’t take off. But it’s all made me think: life isn’t all black and white. And sometimes we stumble. The answer to Israel’s business in Forex and gaming isn’t simple. The answer is likely grey. Sometimes very good comes out of the bad, it all depends on your perspective.
And to paraphrase the 2004 paper: innovation comes from deviation.