Liberalising online gambling in Israel - could it happen?

A consortium of Israeli investors has expressed interest in investing in Guatemala's fledgeling gambling sector.

By
March 19, 2019 14:34
3 minute read.
Gambling dice [Illustrative]

Gambling dice [Illustrative]. (photo credit: PIXABAY)

 
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Gambling in Israel is an anomaly. In almost every other area, the country has embraced high-tech industry, and eagerly adopted cutting edge technology. That's why Israel attracts such a disproportionate amount of digital R&D, and why the "startup nation" tag isn't just hype.

But when it comes to electronic gambling, the country is stuck. The government and courts have long resisted calls to liberalise online gambling. For instance, back in 2005, when smartphone casinos were a distant dream, the Attorney General imposed penalties on credit card companies that facilitated online gambling.

The conventional wisdom suggests that this conservative attitude persists. But are there signs that the dam is weakening, preparing a flood of new opportunities for Israeli gamblers?

A new persecution of poker sites could spell change

If you follow the gambling scene in Israel, you can't have missed 2018's crack down on online poker sites. In October, the courts imposed injunctions against a cluster of poker operators that had allegedly been targeting Israeli customers.

This came soon after the passing of the "Powers to Prevent Offenses Through an Internet Site Law 5767-2017", which empowered the state to shut down all manner of online operations - encompassing many thing, online gambling sites for one.

So on the face of it, the signs aren't good. So why are there grounds for optimism in the online gambling and casino sector?

 Global capitalism and liberalisation go hand in hand

It may seem strange to say, but the clues could lie far away in Guatemala. Legislators there are working on a bill to liberalise the country's gambling sector. At the same time, the country is readying a trade deal with Israel.

So, where do the two stories meet? Well, a consortium of Israeli investors has expressed interest in investing in Guatemala's fledgeling gambling sector. As much as $2 billion has been mentioned, with the participation of figures like Las Vegas mogul Sheldon Adelson.

This shows how Israeli investors are expanding their gambling portfolios abroad. But there's another side to this story which isn't about expansion. It's about competition and fragility.


Established Israeli-owned e-gambling companies like Playtech are experiencing difficult times. With competition rising from Chinese operators, the gambling software developer has seen profits dip dramatically. In those circumstances, loosening restrictions on domestic operators could become a safety valve for struggling tech firms.

Will we see a more liberated gambling and casino politics in a near future?

These economic factors mention is important, but they aren't enough to propel the state to liberalise. However, when you couple them with trends within Israeli society, they start to seem a lot more potent.


And when you combine this popular resistance with the natural desire of businesses to grow, the pressure is rising.

Another factor – the casino wave in Europe. Many Malta based online casino have been legally operated in EU countries via the European Union laws via a gambling license in Malta. But this could change. As each country want to have better control over the online gambling within their own boarders, and at the same time get a bite of the tax income, we see more and more countries are changing their laws. Re-regulations of casino market could very well spread from Europe all the way to Israel. UK, Denmark, Spain among other have it since before, Sweden was the most recent country that passed a new law, in the beginning of 2019, and Netherlands voted yes in February that will be of effect next year most likely. And this is most likely not the end of the story.

It’s not only the politicians who see this as a judicious development. When in contact to a Malta based, and as from January 2019 Swedish licensed, online casino operator, they embraced the development in Sweden.

-Firstly, there will be greater control on the market, so serious casino operators will benefit, and secondly, it seems fair to pay tax in the country where we are operating, and many of us at Dreamz grew up in Sweden, so it’s close at heart.

Could this European gambling wave have any affect in Israel, hard to tell, but could very well be so.

The question seems to be how long Israel can wait before new legislation is passed. Sooner, rather than later, is becoming the likely answer.

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