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The complicated rise of Israel’s online casino gaming industry

Israel is responsible for some of the most fractured gambling laws in the world, legally allowing certain activities while others are banned outright and some are offered online in certain circumstances
Illustrative photo of gambling in a casino (Yossi Zamir/Flash90)
Illustrative photo of gambling in a casino (Yossi Zamir/Flash90)

As many readers will be well aware, the concept of gambling is far from being the simplest here in Israel. The country is responsible for some of the most fractured gambling laws in the world, with certain activities being completely legal, others being banned outright and yet more offered online in certain circumstances. In better times, tourists could come to Israel, enter the West Bank and gamble in cities like Jericho.

Any gambling that can take place here today is highly regulated to say the least, and the government closely monitors everything that takes place. Israeli companies cannot offer online gaming facilities and local residents are encouraged to only participate in government sponsored events.

When it comes to online gambling, this is where the issue becomes even more convoluted. Many casinos, albeit none that are physically operated in Israel, offer games in both English and Hebrew with a clear intention to appeal to Israeli patrons. Various government steps have been taken to prevent this, including law changes and even lobbies to payment providers to prevent any gaming transactions taking place.

And yet Israel remains one of the most important countries in all of the online casino industry. Why is it?

While the laws concerning online gambling are restrictive, especially for locals, the fact that the country is among the world leaders when it comes to online technology and innovation has not been ignored. Indeed, some of the biggest companies in the industry have chosen Israel as the base for at least some of their operations.

William Hill is the perfect example. Having originally been founded in 1934, it has gone on to dominate British highstreets for sports betting and gaming and was already a major power. In 2008, its efforts to translate its dominance in offline gaming to the online space saw it enter a partnership with Playtech, founded and part-owned by Israeli businessman Teddy Sagi. The collaboration was actually operated from Gibraltar, an operation that was supported by service centres in Bulgarian and the Philippines. Such was the success within the first three years of the partnership that William Hill actually bought Playtech out of the deal, paying around £460 million for the company’s 29 percent share.

This set the scene for Israel becoming a crucial cog in the William Hill machine. Today, their Tel Aviv office boasts more than 250 employees, working on marketing and start-up acceleration. One start-up making use of William Hill’s expertise and mentorship is Israel’s own NeoGames, which operates from the same office space.

The irony in all of this is none of the employees of William Hill or NeoGames can actually make use of any of the company’s products and services, at least not legally. Online action continues to not be all that difficult to find for players in the country, with even the blocks on some payment methods no longer being a massive issue. PayPal, for example, has become one of the most popular means of managing money in Israel and beyond and the number of casinos that are accepting PayPal for deposits and withdrawals is increasing all of the time. It will not take all that long for the PayPal symbol to be as synonymous with the cashier facilities at online casinos as the Visa and MasterCard logos.

The fact remains that such gaming will still not be looked upon favourably from a legal perspective, even if you happen to work for one of the biggest casino gaming companies in the world. However, the fact remains that Israel is a hugely important country in casino gaming’s international infrastructure, and nobody can be too sure of exactly what kind of effect that this will have on the acceptance of the activity here.

According to Jewish law, as well as the religious laws of Islam, gambling is forbidden. But building code for gambling? Some rabbis and clerics can weigh in.

About the Author
Karin Kloosterman is the founder of flux, a technology company building Internet of Things hardware and artificial intelligence intelligence for the earth. Their first product is Eddy, a robot that makes it easy for anyone to grow tasty food at home. See www.growwitheddy.com or contact Karin: karin@fluxiot.com
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