Version: 18062004
Editor: Franka Pals
Publisher: Novamedia
Disclaimer: Novamedia disclaims all liability for information provided within the ”Novamedia European Gaming and Lottery Files”.The information is supplied by independent journalistic sources. No parts of these files may be reproduced in any form by print, photo print, microfilm or otherwise, or re-distributed electronically in any form without written permission from the publisher.
Israel is located in the Middle East in the southeastern part of the Mediterranean. Neighboring countries are Egypt, Jordan, Lebanon and Syria. Israel controls the socalled Palestinian territories in the occupied West Bank and Gaza Strip. It also occupies the Syrian Golan heights.
Israel has a technologically advanced market economy with substantial government participation. Israel has 5 Information Technology Hotspots within its borders located in the cities of Haifa, Herzliya, Jerusalem, Rehovot and Tel Aviv. The close proximity of these cities has created an IT cluster similar to that of California is Silicon Valley. Named 'Silicon Wadi' the nations high tech cities have attracted investors such as Intel, Microsoft, IBM, Cisco and Lucent Technologies. Since 1985 Israel has slowly transformed from a centrally planned to a market economy. This change in policy was triggered by a downward spiral of devaluation and inflation, marked by an inflation of 400% in 1985.
The influx of Jewish immigrants from the former USSR during the period 1989-99, coupled with the opening of new markets at the end of the Cold War, energized
Israel's economy. It grew rapidly in the early 1990s; growth began moderating in 1996 when the government imposed tighter fiscal and monetary policies and the immigration bonus petered out.
Israel currently is facing significant political and economic challenges, and its short-term economic outlook looks difficult at best. A combination of sluggish global economic conditions, a slump in the world high-technology sector , lower foreign investment levels (only about $20 million in 2002) and Israeli consumer demand, the two-year Palestinian uprising, lack of progress towards peace, and sharply decreased tourism are all hurting the Israeli economy. Prime Minister Ariel Sharon, who was reelected in January 2003, has said that tackling Israel's economic problems will be the top priority of his new coalition government, sworn in by the parliament (Knesset) on February 27, 2003. Finance Minister Benjamin Netanyahu is focused on an emergency economic plan for the country, in coordination with Bank of Israel governor David Klein. Meanwhile, the United States has indicated that it may provide a significant increase in economic and military aid to Israel, partly in response to the war with Iraq. Israel has requested a $12 billion package of additional aid and loan guarantees from the United States.
| Population: | 6,116,533 (July 2002 est.) includes about 187,000 Israeli settlers in the West Bank, about 20,000 in the Israeli-occupied Golan Heights, more than 5,000 in the Gaza Strip, and fewer than 177,000 in East Jerusalem (July 2003est.) |
|---|---|
| Age Structure | 0-14 years: 26.9% (male 842,885; female 803,864) |
| Currency: | new Israeli shekel (ILS); |
| GPD | purchasing power parity - $117.4 billion (2002 est.) real growth rate: -0.8% (2002 est.) |
| Internet: | Begin 2004 Israel had 2.5 million Internet users aged 13 and above,up from 2.2 million in February 2003. According to recent survey Israel is graded third in the world inusing broadband Internet with 26% of the families connected to high-speed Internet access. Source: Israeli Ministry of Communication |
| Telephones | Israel has 3.1 million direct exchange lines (50 percent penetration),using a 100% digital network. Over 96% of Israel's households subscribe to a telephone line; 20% ofthem have two telephone lines. For every 100 residents, there are 48 lines. |
| Mobile | From 0.125 million mobile users in 1995 to 5.5 million in 2002 (85% penetration). |
The annual spending per capita on legal games in ISrael in 1999 was 135 US dollars. The two organizers in Israel, Mifal Hapayis and the Israel Sports Betting Board, respectively had a revenue of 550 million NIS (2003) and 754,4 Million NIS (2000). Taken into account the estimated 14 billion NIS spent on illegal gambling in Israel each year makes it a huge market for only 6.1 million inhabitants.
Israelis' income from gambling, lotteries, and prize-winning activities will be taxed according to the same tax brackets as salaried income from domestic and overseas jobs, state new Ministry of Finance regulations published in July 2003.
Income from gambling and lotteries will be subject to a 25% withholding tax.
The regulations also place the taxexempt ceiling on income from gambling and lotteries at NIS 70,000. The exemption applies to the total sum won in a single bet, lottery, or prize.
The regulations state that the tax will be paid by the 15th of each month as reported. Israelis who received income from gambling or lotteries will have to fill all the pertinent information on special forms within seven days from the date the money was received.
The government expects to receive 100 Million NIS annually, but the lottery directors warned they fear that the new tax will reduce, in the long run, the total revenues in 35%. This may cause a much greater loss to government and local authorities, the beneficiaries of lottery monies, than the short-term immediate revenues expected from the new tax.
Website: www.pais.co.il
Israel's National Lottery, Mifal Hapayis was established as a private non-profit company in 1951 following a government decision. It was established as a private company, owned by local authorities. The company gets its license to operate a lottery from the ministry of finance. In 50 years Mifal Hapayis allocated more than 22 Billion NIS, which are allocated annually by its Board of Directors:
| 2000 | 2001 |
|---|---|
| 2,801,000,000 | 2,689,000,000 |
| 2000 | 2001 |
|---|---|
| 891,000,000 | 760,000,000 |
Yisrael Rokah, Mayor of Tel Aviv, raised the idea of forming a municipal lottery whose income would be devoted to the establishment of support and health institutions. He saw this as a solution to the city's dire economic situation. Which was caused at the time by the absorption of tens of thousands of new immigrants, many of whom were elderly people or ill and were not a healthy economical influx.
Since then, Mifal Hapayis has invested over NIS 20 billion in the community in Israel in education, health, and social welfare. 11 municipal authorities jointly own the company, and they appoint the management for prescribed terms of service. It operates games of chance which otherwise are forbidden by law. The profits of the company are directed towards goals of public importance and for the welfare of the inhabitants of Israel. Mifal Hapayis is a limited liability company with no share capital, acting under permit from the Ministry of Finance, by virtue of an agreement renewed every three years. The government comptroller's office, an internal auditor, the public complaints commissioner, a certified accountant and legal counsel audit the company. The Mifal Hapayis investment plan is formulated with the assistance of various government ministries. The Mifal Hapayis income of some NIS 2.8 billion annually, is distributed among local authorities according to an annual plan formulated by the company board of directors.
As a public institution with an exclusive franchise in the field of lottery games, Mifal Hapayis has made sure to base its business activities upon complete credibility and to maintain the trust of the millions of Israelis who have participated in its lotteries ever since its establishment. The means of security employed by Mifal Hapayis include: printing of lottery tickets abroad to prevent forgeries, and professional statistical auditing of the results of the Hapayis lotteries over the years. These, and other means, are designed to ensure complete and uncompromising security and credibility.
The Israel National Lottery operates with 10 main distributors that distribute its products throughout the country. The Lottery maintains about 2,500 points of sale throughout the country. These include 800 street special booths. The remainder is small shops selling other products as well.
Lotto (weekly game)
Each participant must guess 6 numbers out a matrix of 45. The draw is held twice a week. Two types of tickets can be purchased: a regular slip and a systematic slip. The prize-payout rate to the public is 55%. First prize in 'Lotto' NIS 5 million to NIS 25 million. 55% of 'Lotto' purchasers are men and 45% women, with the following breakdown according to age: 18-29, 24%; 30-49, 42%; over 50, 33%. According to a recent survey, most participants buy 'Lotto' because of the larger first prize it offers.
Hish Gad (Instant Scratch Card)
Each participant is required to remove an upper layer of a card to reveal the winning number.
There are 20 different types of cards; priced at 5, 10, 15, 20 and 30 NIS
The prize-payout rate to the public is 58%. First prize in 'Hish Gad' ranges from NIS 25,000 to NIS 500,000. Purchasers are 55% men and 45% women. Most participants say they buy 'Hish Gad' for the pleasure of an immediate win.
Chance (4 times a day)
Each participant chooses between 1 and 4 cards out of 52. The draw is held 4-5 times a day. Types of games are Chance 1, 2, 3, 4, and Multi Chance. The average prizepayout rate to the public is 69%. First prize is the invested sum multiplied by 2,000. Chance purchasers are 50% men and 50% women, with an age distribution similar to that of the population as a whole. In response to the question of why they buy Chance, most cited the feeling of a calculated gamble.
Subscribers program
Initiated in 1982, the Subscribers Program is unique in Israel. It addresses the problem of attracting, on a weekly basis, sectors of the population that were not traditional participants in the National Lottery. The objective was to incorporate into the Lottery a target group characterized by a relatively high income. Results indicate that this has been achieved, above and beyond expectations. The numbers speak for themselves. In the second year of operation, the program had already registered more than 142,000 subscribers. In 1985, 1986 and 1987 there were 185,000, 250,000 and 300,000 subscribers respectively, and in 1993 the half-million mark was crossed.
In 2001, the program comprises almost 600,000 subscribers, representing hundreds of thousands of Israeli households. This has been the largest, most comprehensive marketing program in Israel to date.
The Treasury Department rejected in 2003 Mifal Hapayis requests to launch 4 new lottery games including bingo.
The Treasury said that it rejected the request to start a Bingo game because Bingo is considered illegal and it is beyond the Treasury's authority to allow it.
The Israeli newspaper Haaretz reports that the government also withheld permission from the company to receive a bridging loan from banks.
Mifal Hapais Chairman, Avraham Katz -Oz, said that launching the four new lottery games would have helped Mifal Hapayis to compete in the thriving market of illegal lotteries.
Mifal Hapayis is launching a new Lotto game and will be at the retailers on the tenth of March 2004.
Lotto is Mifal Hapayis' oldest game; it was introduced 35 years ago and is still the leading flagship product, in terms of both revenues (about one billion NIS a year) and the number of players (55 % of the adult population take part in Lotto).
Reasons for the change and its aims
The Chairman of Mifal Hapayis, Shimon Katzenelson: "Many hours of work, surveys and focus groups were invested until we decided on this new game, which fits in with the global trend in Lotto games. We are joining the world. In Spain, France and England they are also now launching Lotto with a similar matrix. We have succeeded in designing a simple, friendly, easy to understand game, which distributes more prizes to all the participants and creates more winners.'
The new lotto will be consisting of two matrices. Players have to chose 6 out of 34 numbers in the first matrix and 1 out of 10 in the second matrix.
The New Lotto is designed to have more prize levels 8 prize levels, instead of 6 as in SuperLotto. This change will result in more prizes for a lot more winners.
All prize levels are also being upgraded.
The General Manager of Mifal Hapayis, Shaul Sotnik, says that the New Lotto will have many more winners at each prize level, and at each prize level they will get more money. "The economic situation is affecting customers' wishes and expectations. If in the past most customers wanted to win one jackpot with a very large sum of money, now people want to win more modest amounts, as long as there are lots more winners. The changes we have made to the game do indeed allow us to create a lot more winners at every level.'
The first draw for the New Lotto will take place on Friday, 12.3.04.
Also the draw times have remained unchanged. Still twice a week on fridays and tuesdays all live on national television.
The cost of playing has not changed. The ticket price is still priced at 2.5 NIS per table (2 tables must be completed)
Mifal Hapayis increased its net profit from NIS 481 million in 2002 to NIS 550 million in 2003, a gain of NIS 70 million.
Revenue from lotteries and financing profit totaled NIS 3.01 billion, down slightly from NIS 3.023 billion in 2002.
Mifal Hapayis employs 220 people directly, and franchises 2,400 sales licenses to kiosks and markets. Franchise owners earn 7% on the sales of lottery tickets. Mifal Hapayis earned NIS 37.5 million from its NIS 400 million portfolio of government bonds. In 2002, it lost NIS 10 million.
Mifal Hapyis chairman of the board and CEO Shimon Katznelson said that despite the slight drop in revenue, the company results represented a business achievement, since 2003 was one of the most difficult years ever for the Israeli economy.
Katznelson added that since becoming chairman, he had given the lottery a business and marketing strategy, including streamlining measures. He said his plan involved cutting general expenses, while stabilizing revenue from lottery proceeds.
The Mifal Hapyis report shows that operating expenses were cut from NIS 678 million in 2002 to NIS 627 million in 2003, a saving of approximately NIS 50 million.
Source: Globes and The Jerusalem Post.
According to Avraham Katz-Oz, Chairman of the Board of Directors: 'More than 95% of Mifal Hapayis revenue is returned to the community in the form of prizes, retailer commissions, purchases of goods and services. But most importantly it is returned in the form of the funding of various community projects. The National Lottery budget for 2000 was NIS 2.8 billion; the 2000 aid budget for local authorities reached NIS 884 million, which finances the projects described above.
On the verge of the 21st century, the Mifal Hapayis has initiated a major new project: the establishment of 'Eshkolot Payis' and 'Tapuhei Payis', science and art centers to prepare the next generation to confront the challenges of the future.
Many other important programs are underway that will benefit the entire nation. It is our hope that continued growth in sales will provide the momentum for significantly increased contributions to the community in coming years.'
The Mifal Hapayis Board of Directors manages the affairs of Mifal Hapayis, its assets and activities. The Board of Directors is responsible for the Mifal Hapayis budget, the grants program, development programs, conversion and enlargement of buildings that receive funding from the investment budget, printing and ordering of lottery tickets, selection of regional distributors and determining the nature of the alliance with them.
The Public Advisory Council
The Public Advisory Council advises the board of directors and its chairman in the following areas: public ethics; matters deemed in the public interest; long-term policy for allocating Mifal Hapayis - Israel
National Lottery funds and becoming involved in new areas of activity. All matters relevant to Mifal Hapayis - Israel National Policy are brought to the attention of the Public Advisory Council, by the chairman, in the name of the board of directors, or by one of the council members via its chairman.
General Assembly
The responsibility of the General Assembly, the members of which are city mayors and heads of local and regional councils, is to formulate the regulations which govern Mifal Hapayis - the Israel National Lottery, set its goals, decide on the salaries of the members of the board of directors, approve invoices after they have been checked by the controller, appoint the Mifal Hapayis accountant and determine his salary.
More than 10 Million USD was at stake, On December 17, 2001, when Mifal Hapayis, upon its Jubilee Anniversary drew for the big prize of 50 million NIS. The chance for winning was higher than the regular games because the matrix was 5 numbers out of 50, which makes it a chance of 1:2,000,000.
The draw was held in the 'Must Win' method, according to which the first prize is given at any case. This means that if there is no winner or winners who picked all five numbers of the first prize, the prize passes to secondary winners all those who guessed 4 numbers + the additional number, and so on. In any case a winner has to get out of this draw. Finally twelve players won first prize and each of the 12 winners received NIS 4,160,000. Mifal Hapayis sold more than NIS 90 million worth of Lotto tickets. The normal biweekly lottery main prize is NIS 20 Million.
The CEO of Mifal Hapayis, Ms. Anat Keinan, said that past experience has taught that in draws where there is an unusually big price, more than 20 Million NIS, people organize in groups and send shared tickets in big sums, a way that increases their chance of winning in comparison to a single investor who is usually limited in the scope and ability of investment.
Seven Israelis shared the end-of-the-year NIS 50 million lottery jackpot of 2003. Each winner will receive a bit more than NIS 7 million. 82 players selected six winning numbers and the alternate number. They will each receive NIS 8,500. 1,388 participants selected the six winning numbers but without the alternate, each earning NIS 540. 51,635 players guessed five numbers and will receive NIS 25 each. The 600,628 players who had four numbers will receive NIS 10.
A total of 1,581,000 tickets were sold for the annual lottery draw. Last night, just hours before the drawing, tickets were reportedly selling at the rate of NIS 3.5 million an hour.
This enabled Mifal Hapayis, the Israel National Lottery, to get within a whisker of achieving its sales target of NIS 100 million. Total lottery ticket sales amounted to NIS 99 million.
Mifal Hapayis chairman of the board and CEO Shimon Katznelson recently announced that unless the 2003 annual lottery met the revenue forecast, it would be the last of its kind. In previous years, revenue fell short of the forecasts.
The management of the Israel National Lottery strives to ensure a high level of efficiency through a multi-faceted training program for its sellers.
Ever since its establishment in 1951, Mifal Hapayis has invested NIS 20 billion (about 5 billion dollars) in the fields of health, welfare, formal education, informal education, culture and art. As the beneficiary of an exclusive franchise to hold lotteries in Israel, Mifal Hapayis accumulates resources and designates the proceeds (after distributing prizes to winners and financing operational costs) for the betterment and expansion of community services provided by the municipal authorities in Israel.
To date, Mifal Hapayis has financed the establishment of hundreds of kindergartens and schools of all kinds, thousands of classrooms countrywide, scores of community centers, hundreds of various clinics, senior citizen day care and geriatric centers, and more recently, metropolitan centers for art and culture. Millions of shekels of the Mifal Hapayis budget are spent each year on the purchase of equipment and furniture for educational and health institutions, on the renovation of educational, labour and welfare institutions, on converting shelters for multi-use purposes, on the purchase of vehicles for transporting children and on the establishment of scores of Eshkolot Payis centers for science and art, in many settlements in Israel. Since 1998 Mifal Hapayis has been financing the purchase of thousands of personal computers, as part of a project designed to computerize educational institutions in Israel, from kindergartens through high schools, and in aid of the country's 'A computer for each child program.' As an active partner in the war against substance abuse, Mifal Hapayis finances the establishment of community centers and villages for the rehabilitation of substance abusers.
In recent years Mifal Hapayis has invested in the establishment of 63 'Eshkolot Payis for science and art' throughout the country, which include sophisticated laboratories, arts activity rooms, dance and music rooms, lecture and performance halls. Mifal Hapayis is currently financing the establishment of 'Tapuhei Payis for art and science', which are centers similar to the 'Eshkolot Payis' in scope and activity, but on a smaller physical scale. Metropolitan centers for art and culture, which Mifal Hapayis has been financing, include the Cameri Theatre, HaPayis Hall in Tel Aviv, a public library and metropolitan science center in Haifa, a multi purpose sports center in Jerusalem and a metropolitan Payis center for art and culture in Beer Sheba. Mifal Hapayis intends to continue its financing of various projects in the fields of art and culture throughout the country. In addition, some 50 culture and arts institutions - theatres, orchestras, museums, dance troupes and various ensembles - benefit from the sponsorship of Mifal Hapayis by various means.
Website: www.toto.org.il
The Israel Sports Betting Board (ISBB) was founded in January 1968. It has a license to organize games of skill, i.e. sports betting games, in Israel. The revenues are dedicated to encourage sports.
In November 2001, Major-General (res.) Yom-Tov Samia became the new Chairman of ISBB. Yom-Tov. As Managing Director he is running one of Israelis leading enterprises, 'Baran Group' Ltd, which deals with infrastructure, communications, industries, semiconductors, technologies and investments. The nomination to the ISBB is on a voluntary basis. Yom-Tov stresses that his main goal is to increase the turnover of ISBB and reach the target of 1 billion NIS in revenue annually (250 million dollars) in three years. His optimism is based on the new ODDS system that is scheduled to launch February 2002.
"Sports has importance and influence and our task is to increase and strengthen its economical infrastructure in order to achieve its social and cultural goals', says Yom-Tov. In 2001, the ISBB Head Office moved from the centre of Tel Aviv to Petach Tiqvah outside Tel Aviv.
ISBB is a customer of EssNet since the middle of the 70's. Since summer 2001, a new ELOS Lottery System is handling all bet transactions.
Number of retail outlets: 1350
Total sales in year 2000: NIS 754.4 million (=USD 186.7 million)
(percentage of sales in brackets):
The Israel Sports Betting Board (ISBB) has launched two new odds games in April 2003, Match and Top, adding to Winner, which became a leading and successful brand in the Israeli market after only one year of operation.
Income from Winner so far is more than 300 million NIS (US$65 million). Yomtov Samia, the Chairman of ISBB, says that the new games will help to achieve an annual income target of 870 million NIS. Samia emphasizes that the new games will become an efficient tool in the struggle against illegal betting.
On august 2003 the municipality of Eilat and Israel's National Lottery Mifal Hapayis signed an agreement in principle for the joint construction of a casino in the city. According to the agreement, the casino will be run by a franchisee to be chosen via tender.
According to the Israeli newspaper Haaretz both the municipality and Mifal Hapayis have for years been lobbying the government and the Knesset to permit the establishment of a casino in Israel. However, the city and its mayor, Gabi Kadosh, had always advocated a privately owned casino, whereas Mifal Hapayis believed that it should own and operate the establishment.
On the Government side the Prime Minister Ariel Sharon reportedly favors a casino owned by Mifal Hapayis, while Finance Minister Benjamin Netanyahu insists that it should be privately owned.
Haaretz reports that the agreement states that: "a joint steering committee will prepare a draft bill promoting the establishment of legal casinos in general and in Eilat in particular.'
Under this bill, the first such casino in Israel would be established in the city of Eilat.
Source: Haaretz
Mifal Hapayis, the Israel National Lottery, has presented a detailed plan to the government for setting up a legal casino under Mifal Hapayis management reported the globe in June 2003.
As part of the business plan Mifal Hapayis is proposing the establishment of five casinos, located in Mitzpe Rimon, Ben Gurion Airport, the Dead Sea, Eilat, and in the vicinity of Mitzpe Rimon. The latter will be a Las Vegas-style gambling resort.
To support its proposal Mifal Hapayis commissioned a survey from Market Watch, which found that 57% of the Israeli public supports the establishment of a legal casino.
Gambling profits derived from outside the state of Israel will be subject tax in Israel when the transition to personal taxation is implemented on January 1 2003.
Local sources also claim that tax authorities could collect taxes from casino operators in Israel and gambling profits, even though these activities are illegal, because these revenues are taxable as business revenues.
According to state lottery operator Mifal Hapayis in September 2002, some NIS 14 billion a year is spent on illegal gambling in Israel; in comparison, lotteries and the football pools bring in around NIS 3.5 billion a year. Taxation of revenues from illegal gambling would bring in an estimated NIS 3-5 billion in taxes per year.
Mifal Hapayis claims that if it were allowed to operate a casino in Israel, it would generate revenues of around $2 million a day or NIS 3 billion a year, which would be plowed back into the community.
The Chairman of the Board of Mifal Hapayis, Mr. Abraham Katz-Oz has said that Mifal Hapayis is against the existence of illegal gambling in general, and particularly on the Internet. 'The industry of illegal casinos and gambling has a yearly volume of 3.5 to 5 billion Shekels and it brings about crime and criminals. Only a combined struggle by the police against these criminals, and the establishment of a legalized casino to be managed by Mifal Hapayis, will help reduce this problem.
The moneys earned by the legal casino will be returned to the public and will be used to finance national projects', he said.
Therefore Mr Yossi Katz (Labour) raised on June 4, 2001 a bill for establishing a legal casino in Israel to be managed by Mifal Hapayis, which was placed on the table of the Knesset this morning. 23 members of Knesset from most home factions seconded the bill. The Knesset committee approved, by a majority of 3 to 1 against, an application for exempting the bill of being placed on the Knesset table.
The foregoing refers to an amendment of section 231(a) of the penal code, allowing the establishment of a legal casino in Israel to be managed by Mifal Hapayis under the Minister of Finances' permission. According to the bill, all revenues generated by the casino to be managed by Mifal Hapayis will be pumped back to the public for funding national, trans-party projects, such as the long school day, the computer for every child, coping with family violence and a variety of products whose actual handling is unattainable owing to lack of funds.
The question of whether to establish a casino in Israel is no longer relevant. Casinos are already there. They are situated in approximately 150 sites running illegal casinos throughout the country, in Jericho and in Taba, and aboard 8 casino ships, which go out of the open territorial water near Eilat (the southern tip of the country, a very popular tourist spot), and according to Tamar Guy, Head of PR & International Relations, 'millions of dollars are going our of the country due to very attractive tourist packages to
Greece, Hungary and other not so far casinos, many of them run by Israelis. Until two year s ago, we had a casino in the Palestinian authority area, in the city of Jericho. 95% of its visitors were Israelis. All the money went to the pockets of casino Austria and some high official of the Palestinian authority.'
The casino exists and is developing, but it is illegal. Israelis spend approximately 5 billion shekels a year on illegal gambling. This money falls into the pockets of criminal elements. The arm of the law is not strong enough to help. The struggle against illegal casinos is never-ending and hopeless. Therefore, the police also hold the opinion that only a legal casino in Israel will reduce the scope of the phenomenon and help combats the associated crime. Mifal Hapayis is pleading to be granted a license to start a legal casino, the proceeds of which would go to the public good.
The proposed casino will be subject to the following rules:
A research conducted in December 2000 indicates the following:
Israeli sources believe Tel Aviv could be moving closer to its first casino despite a police crackdown on gambling ships anchored off the coast of Eilat.
Having previously operated a casino in Jericho and currently owning a cruise ship with casino facilities on the border of Israel's territorial waters, Casinos Austria could now be in the running to actually operating a casino in Israel again if reports coming out of the country are to be believed.
The Israeli municipality of Eilat and the National Lottery have signed an agreement for the joint construction of a casino in the city which will be run by a franchisee to be chosen via tender.
The agreement states that 'a joint steering committee will prepare a draft bill promoting the establishment of legal casinos in general and in Eilat in particular.
'Under this bill, the first such casino would be established in Eilat. According to sources in Tel Aviv, the Israeli government could be about to make Jewish Austrian businessman Martin Schlaff, the owner of Casinos Austria, the operator of that or maybe another casino.
Schlaff has been working on the proposal since August 1995 when he addressed a committee charged with settling the gaming debate in Israel.
At the meeting, Schlaff told the committee that he believes the country's first casino should be in Tel Aviv, built in a European style, to end illegal gambling in the region and to attract tourists and businessmen.
Sources indicate that Schlaff is now that much closer to his dream. Moshe Gavish, the head of the committee in 1995, former income tax commissioner and vice president of the Mercantile Discount Bank, has been reported as saying that he believed the decision to green-light the casino had already been made, and was subject only to being rubber-stamped by the Knesset.
Schlaff hopes to build one casino in Tel Aviv housing 300 gaming machines and a further operation in the tourist resort of Eilat, which will accommodate 100 machines. Speculation on gaming markets opening up can often prove to be pure conjecture. However, in this case the signs are more positive as Schlaff is known for having connections at the highest level of Israeli government.
Schlaff met Prime Minister Ariel Sharon in August 2002 when the Cancun was en route to the Gulf of Eilat and the PM's office has reported that the two meet occasionally to share opinions. In January 2001 close to the general election that put Sharon in power the media reported that Schlaff met various high-level government officials at his home in Vienna to promote the re-opening of the casino in Jericho, which closed in October 2000. Those at the meeting, however, said the meeting was to promote a ceasefire in the territories.
But Schlaff may not get things all his own way. American-Jewish businessman Sheldon Edelson, chairman of Las Vegas Sands, also addressed the Gavish committee and made it clear he was a potential contender for the licence.
In order to participate in the gambling activities, a program can be downloaded from the site or through available 'freeof-charge' telephone numbers in Israel, in order to hear explanations in Hebrew and to receive a free installation disk of the software required. It seems that the transference of the money by the participant is done through international credit cards and other sites like 'Western Union'. Winnings are also received directly to credit cards, by check or by bank transfers. Raffles, gambling and games of fortune are prohibited in Israel, in accordance to paragraph 224 of the Penal Code, and those who violate the law will receive 3 years imprisonment.
The only possibility of legally holding these types of games and raffles is when it is done by special authorization of the Treasury Minister. To the best of our knowledge, the Treasury Minister has not given any authorization for this gambling website, and therefore the sites activities are a criminal violation of the law.
The gambling on the site is destined exclusively or almost exclusively to Israeli residents and is managed by Israelis. The website's activities are advertised through an extensive publicity campaign in Hebrew, throughout the Web, in the press and in poster media, and the publicity includes photographs of Israelis winning money.
Edelson estimated that approximately $2bn leaves Israel each year to be gambled overseas. Edelson already owns a casino and convention centre in Las Vegas and to mark his commitment to the Israeli scheme he has already discussed the development of a $150m convention and exhibition centre in Eilat with the town's mayor. At that time he made it clear that such a centre would not be profitable without a casino.
A source involved in the casino has been reported as saying that Schlaff's chances of receiving the license are far greater than Edelson's. Casinos Austria already previously operated a casino in Jericho and currently owns a cruise ship with casino facilities the Cancun anchored off the coast of Eilat, on the border of Israel's territorial waters. The gambling ship is anchored; waiting for the day the Knesset allows a casino to operate in its territory.
On March 20th, 2001, Mifal Hapayis presented a police demand, through its power of attorney - Advocates Sharon Zichroni and Amnon Zichroni, against the illegal gambling taking place at the Internet website called 'King Solomon Casino', found on the Web at www.kings.co.il, and is demanding that the police close down the site.