Israel Might Liberalize Its Online Gambling Laws, Says Jerusalem Times
Israel could be on the verge of liberalizing its online gambling laws. Nothing is certain, but a consortium of Israeli investors want to make a $2 billion investment in Guatemala’s online gambling sector, but Attorney General Avichai Mandelblit or his successor would have to change Israel’s gambling laws to accommodate such investments.
The Guatemalan government wants to open its gaming sector to foreign investment in hopes of generating tax revenues from legal online betting.
Israel has a reputation as “Startup Nation”, a country so vested in information technology, the Internet, and the R&D sphere that bevies of startup companies dot the landscape in Tel Aviv suburbs. One sphere where the moniker does not apply is the online gaming niche, where entrepreneurs have been discouraged by conservative gaming laws.
In the early days of the Internet, Israel was a key location for online gambling innovation. Teddy Sagi launched online gaming software company Playtech in Israel. Playtech is still a big provider of gaming software, but its offices have moved to London and the Baltic States because of Israel’s anti-gambling laws.
2005 Israeli Law against Online Gambling
The change began in 2005, when Israeli Attorney General Menachem Mazuz announced a ban on the payment processors (Neteller, etc) which most online gaming sites used. Even before the advent of smartphones, Israel banned online and mobile gambling.
Through the 2010’s, those policies have persisted. For years, the Israeli Ministry of Finance has regulated the Israel national lottery. The Finance Ministry also began punishing Israel’s professional poker players for the way they reported their tournament winnings. Many ended up owing hefty sums in back taxes.
Powers to Prevent Offenses Through an Internet Site Law
Then in 2017, Israel’s Knesset passed the “Powers to Prevent Offenses Through an Internet Site Law 5767-2017”, which gave authorities the right to compel Internet service providers (ISPs) to block the domains of sites which commit serious financial crimes.
The “Powers to Prevent Offenses” law listed unregulated gambling alongside other banned (and some quite horrid) activities like terrorism, illicit drug sales, distribution of child pornography, and prostitution. The Israeli Police’s Unit for Combating Economic Crime had the ability to determine which sites should be targeted by the ISPs.
Tel Aviv Judge Blocks 1xbet, TotoBet777
Early in 2018, Tel Aviv District Court Judge Zion Kapah, at the behest of the state prosecutor’s office, called for more unregulated online gambling domains to be blocked. Judge Kapah also called for the prohibition of Israeli residents from gaining access to any online gambling sites.
Sites like 1xbet.com, totobet777.com, and p2vbet.com were banned. At the time, the Ministry of Justice said, “Within the focus of the Israel Police’s effort to deal with severe economic crime in the area of gambling organization and management, the Unit for Combating Economic Crime in Lahav 433 has been working to expose sites that operate gambling in order to allow them to be closed.”
Why Israel Isn’t Involved in Online Gambling
Thus, nearly 15 years of Israeli legal and law enforcement activity has driven the online gaming sector underground in Israel. After entrepreneurs like Teddy Sagi moved operations to more amenable countries, the most famous Israelis associated with online gambling were international hackers like Gery Shalon and Ziv Orenstein — world class online casino scammers who launched the cyber-attack on JPMorgan-Chase bank in the United States, all for the sake of a pump-and-dump scheme.
There is a reason that most online gambling sites in the world — including many unregulated online casinos, poker sites, and sportsbooks — list Israel as a “restricted country”. The country’s officials are solidly and consistently against online gambling.
Now, if a report in the Jerusalem Times is correct, Israel might become a hotbed of online gambling activity again. The Israeli investor group includes mostly traders with no previous ties to the global gambling community. One potential American investor is rumored to be Sheldon Adelson, the chairman of Las Vegas Sands, famed political donor, and most famous online gambling opponent in the world.
Adelson’s Role Casts Doubt on Reports
The fact Sheldon Adelson is mentioned casts some doubt on the reports. First, Sheldson Adelson has spent countless dollars to end online gambling in all 50 US states for the sake of protecting underage children from iGaming, so radical reversal on Guatemalan online gambling would be out-of-character.
Second, it would be politically unwise, because American media companies would pick up on the news and use it to undermine Adelson’s efforts in the United States to undermine Internet gambling. Just two months ago, five years of lobbying came to fruition when the US Department of Justice announced that interstate online casinos and poker sites were banned at the federal level — a decision most assumed had been done at the behest of Sheldon Adelson himself. (The Office of Legal Counsel opinion used language previously used in memos circulated by Adelson lobbyists.)
Third, the 85-year old Sheldon Adelson is in a tough battle with cancer. According to his own lawyer, Adelson has not been coming into the offices at the Venetian Las Vegas since mid-December. While he sometimes chairs conferences calls, he missed an important conference call in January and is not always involved in decision making at the present. Under the circumstances, it hardly seems likely that Sheldon Adelson has decided now is the time to invest in Guatemalan-Israeli online gambling deals.
Israeli Investment in Guatemalan Online Gambling
May the investment group information is flawed. Maybe the entire story of an Israel-based investment group being interested in Guatemalan online gambling is incorrect. Whatever the case, there seems to be one group of investors who believe Israel might liberalize its online gambling laws sometime soon.