The country of Israel has strong regulations in place when it comes to gambling. Sports betting is legal and overseen by the Commission for Sports Gambling. Lotteries are legal too and are overseen by the Israeli government. Online gambling is illegal, though the law doesn’t target players, only operators. This may seem ironic given that Israel has had a strong connect with the online casino industry. In this article we take a look at Israel’s influence on the development of the online casino industry.
The Early Days – Playtech and the Israel Connection
The relationship between Israel and the online casino industry is an interesting one. While online casino gambling is illegal in the country, there are quite a few Israeli businessmen and entrepreneurs who have contributed to this industry’s growth. The first name that comes to mind in this relationship is Playtech, one of the most well-known online casino software vendors. It is the largest online casino gaming supplier to trade on the Main Market of the London Stock Exchange. The founder of Playtech is Teddi Sagi, an Israeli businessman with a total net worth of over $3.6 billion.
Disrupting the traditional land dominated gambling industry was always going to happen
Playtech is known for its collaboration with DC Comics – initially it was Marvel it collaborated with – and major Hollywood production houses to bring to players from across the world an incredible array of slots. The Marvel slots and now, the DC Comics-based slots, allow players to play alongside their favourite superheroes, while the Hollywood slots take the player directly into blockbuster movies like Rambo, Gladiator, and many others.
Playtech’s game portfolio includes not just slots but also table games, video poker, scratch cards and specialty games, jackpot games, and live dealer casino games, available for play from desktops, laptops, smartphones, and tablets.
888.com and Its Israeli Origins
Another online casino major with Israeli roots is 888.com, one of the giants of the online gambling industry. It was founded in 1997 by 2 pairs of Israeli brothers, Avi and Aaron Shaked and Shay and Ron Ben-Yitzhak. This is another casino gambling company that trades on the London Stock Exchange and is currently headquartered in Gibraltar. It is licensed by a number of top licensing authorities including the Government of Gibraltar, the Malta Gaming Authority (MGA), Ireland’s Revenue Commissioners and the United Kingdom Gambling Commission (UKGC).
True trailblazer, but has lost it way over the last 5 years.
888.com has gone from strength to strength over the years. Their offerings currently include an online casino, a poker room (888Poker), bingo (888Ladies) and sports betting (888 Sport) and is a principal partner of Birmingham FC. It has been a winner 5 years in a row at the EGR Awards and won over 50 international awards over the years. It also won recognition at the first Gaming Intelligence Awards in 2016.
The influence that Israel has had on the gambling industry continues even today. PokerStars, for instance, which is one of the big names in the world of online poker, was founded by Canadian businessmen of Israeli root. There are countless small companies that support the online gambling industry in different ways, either through the tech side or the marketing side.
Israel’s Influence on Online Casino Gambling: The William Hill Story
A big factor behind this is the fact that Israel’s position as a global leader in innovation and online technology. Some of the big names in the online gambling world have their offices in Israel. A perfect example of this is British betting major William Hill, which had its base of operations in Tel Aviv till it decided to shut shop here and move back to the UK in 2017.
William Hill is one of the biggest betting houses in the UK, having been around since 1934 and with 2000+ betting shops across the UK. It was only natural for it to enter the online gambling market. In 2008, it created a big splash by entering this market in partnership with Playtech. The enterprise was based out of Gibraltar, with operations in Bulgaria and the Philippines as well. It was such a successful venture that in 3 years William Hill bought out the 29% share that Playtech had in the organization for approximately £460 million.
And that was just the beginning. The next step for William Hill was to set up operations in Tel Aviv. At one time it had a snazzy office on the 32nd floor of one of the many skyscrapers that dotted the Tel Aviv skyline. There were 250+ employees and the company also had a startup accelerator within it. Most of its operational activities were marketing-driven. The strategy was devised by the parent company in Britain and executed in Israel. The results were mind-boggling: 1 million plus customers a year.
This was possible because of the expertise in marketing and also in identifying and acquiring new markets for the company. There are also companies like NeoGames, which has its offices in the same space as William Hill, that have offices in Israel. William Hill had in fact invested in NeoGames and used its services. William Hill’s decision to move out of Israel and back to the UK was based primarily on high operational cost.
Israel and the Online Casino Industry Today
Israel’s influence on the development of the online casino industry has been, over the years, at multiple levels. There are the bigger casino operators like 888.com who have set up shop here and run their marketing and distribution operations. There are also the technology companies that cater to the bigger fish in the market. And then there are the affiliate companies that help casinos and casino operators bring in new players with their affiliate programs.
The affiliates have a big role to play in new player acquisition. They offer promotions and run campaigns to attract players in return for compensation. These include companies that employ personnel to execute their strategies, and also people working out of their homes. There are also acquisitions that are conducted by people with expertise in the field; a classic example is the acquisition of PokerStars by Amaya Gaming, a Canadian gaming company, for close to $5 billion.
On the tech side, the key influence is in providing the personnel to generate code for running the algorithms that online casino software providers use to run their software and ensure fair and reliable gaming. Other areas include user interface (UI) development.
However, the name of the game today is marketing, and that is where Israeli companies are providing their expertise nowadays. One must remember that the marketing tools are also mostly technology-driven and span areas ranging from new player acquisition to customer relations and support. These companies have changed the way things are done and brought Israel to the forefront of the marketing technology space.
To Sum Up…
And it is all of this that makes the entire scenario so interesting. On the one hand you have the government banning online casino gambling, and on the other you have government-recognized companies offering their tools, technology and services to deliver high-quality solutions to the online casino industry. In that sense, Israel’s influence on the online casino industry has been 360 degrees and likely to be a continued exercise given the rate at which the industry is growing.