Implications of Legalizing Casinos in Israel

Posted by: on Oct 10, 2015 | No Comments

Yariv Levin, Israel’s Tourism Minister, confirmed on September 23, 2015, while speaking on national radio that there is indeed a proposal, backed by Prime Minister Binyamin Netanyahu, to legalize casinos on mainland Israel at last. He openly condoned the decision and went on to talk of his own role in conducting an inquiry into the matter, the conclusions of which will determine the fate of the said proposal. In the 1990s, casino magnate Sheldon Adelson had attempted to make forays into the market, but had been held back on account of the contentious status of gambling in the country. While the people of Israel are allowed to bet on some things, casinos have till date remained illegal within the territory of Israel. With this revolutionary move, the Prime Minister is set to alter the course of Israeli economy. However, in order to truly understand the true import of this move, one must understand the context within which it will be operating.

Gambling in Israel

It would be wrong to say that gambling in all its forms has been illegal in Israel. However, whatever gambling exists in the country is highly regulated by the government. While casino gambling has been illegal, there are a number of Israeli cruise ships that offer casino games to customers. Eilat, the city in which the first casino is being proposed, has been, for many years, the port from which these ships sail into neutral waters in order to legally offer gambling. Sports betting and lottery enjoy government support, even though they are closely regulated by the Israeli Commission for Sports Gambling and the Mifal Hapayis, respectively.

Prevalence of Illegal Gambling

Another form of gambling that thrives is online gambling, although local companies are not allowed to run such operations on the internet and the government has taken strict measures to ensure that citizens do not engage with international companies that do so. However, one only needs to look online to know that there are a large number of online gambling sites that accept payment in Israeli Shekels for the convenience of their Israeli patrons. It is not surprising then that illegal gambling and betting rake in billions of dollars each year in Israel. Such illicit gambling persists in the hands of leaders of organized crime, many of whom are headquartered at Eilat. Ian Ben-Shitreet, the alleged kingpin of illegal gambling in Eilat, was convicted by the Be’er Sheva District Court on the charge of attempt to murder and racketeering on September 2, 2015.

History of Casinos in Israel

In September 1998, Yasser Arafat started the first for-profit, foreign investment driven venture in the Palestinian territory – an Austrian run hotel-casino called Oasis, located amidst the deserts of Jericho, meant to cater to Israelis. It was a $50 million project, which could have translated to millions in tax revenue for the then in need Palestinian authority. The 1993 Oslo Accords had accorded Jericho the status of the first West Bank City in which the Palestinians had complete civil and security control. Therefore, to some, the Oasis hotel came to symbolize the hope of peace between Israel and Palestine. These hopes came crashing down with the Second Intifida in 2000, the second Palestinian uprising against Israel and with them, the shutters went down on the Oasis.

Implications of Legalizing Casinos in Eilat

There is no doubt that Israelis are fond of gambling, given the incidence of illicit ventures that run in bomb shelters in southern Israel or the large numbers that cross the borders to visit Egypt’s Red Sea resorts. That there is a demand for a casino in Israel, thereby making it a potentially lucrative venture, is undisputed. However, the hurdles that are to be crossed are religious, political and judicial.

The Prime Minister has authorized both Yariv Levin and Yisrael Katz, the transport minister, to assess the ramifications of such a move. They are well aware of the socio-economic benefits that such a move could portend, especially for a war-ridden, beleaguered nation like Israel, but they are also conscious of the importance of levying restrictions and supervision so that the venture does not turn into “an incubator for crime.” If they are able to realize the plan, they might well find that they are able to finally prevent the potential of the project from serving the cause of crime and use it to restructure the society in a fruitful manner.

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