Israel Gambling Law that Doesn’t Quite Work

Israel is an absolutely fascinating place when it comes to how the hightech world and some of its biggest successes have been forged. And one of its biggest stars Teddy Sagi started the technology that runs gambling software to power online casinos. His company Playtech now acquires other companies for billions. Like crypto and cannabis, dealing in this grey area can be confusing for everyone. Let’s look deeper: Israeli law places a general ban on all gambling activities, save for two, in the form of a national lottery and national sports betting operator monopoly. These two services are regulated as follows:

• National Lottery (Mifal Hapayis): Launched in 1951, the Mifal Hapayis lottery offers a weekly subscription lottery, scratch cards and a range of other raffles and lotteries. Its operations are regulated and monitored by the Ministry of Finance.
• Israel Sports Betting Board (ISBB). Launched in 1967, the ISBB has all rights to plan and supervise sports betting in the country.

Apart from these two exceptions, Israel’s Penal law 5737-1977 prohibits betting and games of chance, organizing of lotteries, and running venues where these activities happen.

Chapter 12 of the Penal Law named, “Prohibited Games, Lotteries and Betting” consists of several provisions around gambling, like the prohibition of betting and gambling games as well as the participation in the prohibited games.

According to the law, a prohibited game is one which the player can gain valuable consideration, win money, or benefit as per the game’s outcome – with that outcome arising from chance as opposed to ability or understanding.

• The lottery is any setting where it’s possible to gain valuable consideration, win money or a benefit, with the outcome basing on chance rather than one’s ability or understanding.
• Betting is any setting where it’s possible to win money, a benefit or valuable consideration, with the outcome depending on chance, including lotteries linked to the result of sporting competitions and games.
• Place of prohibited games is a venue where the prohibited games often take place – whether open to specific individuals or the public, or other purposes.

The Penal Law highlights three categories of gambling – though practically, these broad definitions cover all kinds of gambling. You may have realized that the descriptions sought of overlap and that one form of gambling may fit into another category and so on. Under Chapter 12 of the Penal Law, the Israeli courts recognize the following as gambling: sports betting, lotteries, betting, and slot machines.

Online gambling

The Bank of Israel has placed substantial burdens to online gambling related transactions involving operators from foreign countries. The notice puts severe limitations on banks and other financial institutions to gambling-related transactions. And while there aren’t any specific laws around blocking of payment, there is secondary legislation that allows Israel law enforcers to order financial institutions to prevent the transactions related to online gambling.

Israeli and gambling

In as much as the country has attempted to prevent its citizens from gambling on any casino online, the measures are not as effective as it wants them to be. Players still find ways to infiltrate the market. Besides, the Israeli punters love to participate in these games and often find ways of signing up at sites that are blocked (as well as those that aren’t). The law cannot punish these online casinos because they are out of Israel’s jurisdiction. And since no law implicates Israeli citizens who play on these online casinos, no one seems to care about the prohibitions – at least as of yet.