For over two decades, Israel has been the base for thousands of gambling jobs, with publishers, developers and operators hailing from or setting themselves up in the country. This might sound a bit impossible as the country’s government has enforced stringent rules around betting. However, that has not stopped innovative industries from popping up.
For example, NeoGames, a global provider of iLottery solutions, was founded by Israel-born Barak Matalon. The business is headquartered in Luxembourg, is a member of the World Lottery Association and has offices in Tel Aviv and Yafo, Israel. The majority of its 350 staff are based in Europe.
On the other hand, LSport, founded by Ido and Dotan Lazar, is headquartered in Ramat Gan, Israel. They provide the global gambling industry with sports data sourced through API technology. They offer betting platforms an automated sportsbook trading management product (STM) and bet stimulation products to enhance user engagement with the bookmaker.
Gibraltar-based 888 Holdings was conceived in Israel by Aaron Shaked after he visited a conference in Monte Carlo and saw the potential for creating a virtual online casino. Shaked was a dentist, so he needed a crash course in gambling which he undertook at an authorized casino in Eilat. When the company floated, he and his brother pocketed a cool USD 200 million.
However, innovative Israelis are as casino, igaming and sports betting entrepreneurs; the government has not yet embraced the opportunities the sector presents. The irony is that people gamble whether it is legal or not. The main difference between regulated and unregulated markets is whether citizens are protected by a regulator or are left to be prayed on by potentially unscrupulous operators.
While Israel has been going through a series of amendments to gambling laws meaning the national lottery, sports betting, and gambling on horse racing is now legal, one Canadian province has taken the bull by the horns and legalized all forms of gambling. Ontario was the first place in the country to operate a fully regulated, legalized gambling market. Regulation falls under the auspices of the Alcohol and Gaming Commission Ontario (ACGO), which grants iGaming Ontario licenses to commercial operators. The operators must apply for permission to operate in the territory and are bound to a strict legal framework and code of conduct.
Most of the big-named international commercial gambling platforms (like 888 ironically) can offer their games. Canadians get to play all the top games. As a nation, they are particularly fond of gambling, and there are nineteen million registered online gambling accounts. Six out of ten Canadians say they have spent money on gambling, and the demographic is split evenly between men and women. All players can access their choice of games, and nearly every Canadian casino offers bonuses to make playing at their site even more attractive. In addition, new games are constantly being developed to keep players engaged. Live-dealer games are currently all the rage as they allow players to interact with real croupiers from the comfort of their own homes.
The gamble has paid off in Canada, where revenues raised are used to fund good causes and infrastructure projects throughout the country. In addition, the commercial operators have the experience to put in place measures that help people who could be at risk of gambling harm. For example, all sites have to have options for players to self-exclude, and iGamingOntario offers advice and support about how to gamble safely.
In general, they advocate only playing at licensed sites for players to set themselves a budget and understand that, ultimately, the house always wins. Players are advised to take frequent breaks, not to gamble more than they can afford to lose and never to borrow to try and win back lost stakes. This recognition of the potential for gambling harm and the provision of tools for players who might find themselves in difficulty is a softly-softly approach which allows others who are not at risk to enjoy the sites safely and legally.
Israel has taken a different path, but its national lottery has been in operation since 2006, and players have a choice of five games. In addition, the government-backed Commission for Sports Gambling oversees sports betting. Options are pretty limited, and the commission is responsible for the daily provision of sports betting on soccer and basketball on its website.
However, there is no provision for online commercial and casino gambling, and the government has gone out of its way to shut down operators. The authorities ordered the closure of websites that were gateways to external offshore gambling sites. In addition, land-based casinos are mostly banned. Israelis wanting to play traditional casino games like blackjack, roulette, baccarat, and craps visit cruise ship casinos when the boats dock in the country’s port cities. What this means is that any money spent in casinos flows out of the country, and there is no benefit to the state. Despite that, Israelis still find ways to gamble.
The most ironic part of this is that many of the top companies in the online gambling industry are based in Israel. Israelis have created some of the largest iGaming operators and software providers like 888 Holdings, Playtech, PokerStars, NeoGames, Aspire Global, LVision and L Sports. Other companies use the creativity and capacity of the country’s developers to produce and run their online gaming products. However, Israeli citizens are forbidden from accessing these native services.
The gambling sector is a key growth driver for Israel’s economy. However, it could be an even more significant industry for Israel if citizens were allowed to participate. There are opportunities not only in software development but also for marketing, data and fintech companies. Israel has the potential to be an iGaming powerhouse. If the Canadian model is anything to go by, the additional revenues collected from issuing licenses and generating tax revenues could seriously benefit the country’s balance of payments.
The Ontario-regulated market has been operating for just over a year. The Toronto Star reported that the province made $1.4 billion in the first year. According to iGaming Ontario, the average spend of active players was around $70 a month. Global News reported that sports betting was thriving, too, but it was not nearly as successful as popular or profitable as online gaming. Based on this learning, it could be that the Israeli state is missing out on a trick.
This article was written in cooperation with DPR