Introduction

The Israeli Prime Minister, Benjamin Netanyahu, has instructed the Transport Minister and the Tourism Minister, to evaluate the possibility and ramifications of establishing a brick and mortar casino in Eilat, one of Israel’s main touristic destinations. The review will look into, inter alia, the economic potential of establishing such a casino, the impact it would have on Eilat and the potential social risks involved.

While the review and analysis of the issues related to establishing a terrestrial casino in Israel has taken place several times in the past – and did not amount to anything of substance – it seems that the likelihood of a positive decision this time is higher, given the economic enhancing impact of such a casino for Eilat and Israel, the potential of such a casino to reduce the scope of illegal gambling taking place in Israel as well as what seems to be a lesser negative sentiment towards casinos in Israel.

Current Legal Situation

As it currently stands, casino gambling is prohibited in Israel. According to the penal law, any person who organizes or conducts gambling faces a prison term as well as a fine. There are several exceptions to this rule, relating to gambling conducted in a social context, or to certain types of games if these are conducted in accordance with a permit issued in advance by the Minister of Finance.

The two other main exceptions to the prohibition on gambling relate to gambling conducted by the two gambling monopolies – the National Lottery and the Israel Sports Betting Board (the “ISBB“). The National Lottery is authorized to offer scratch cards, lotteries and similar games, while the ISBB is authorized to offer sports betting and horserace wagering.

In addition, up to several years ago a brick and mortar casino operated within the Palestinian city of Jericho, which was subject to Palestinian law and hence did not run afoul of the Israeli penal law. However, this casino was abandoned several years ago due to, inter alia, the violent clashes between Israel and the Palestinian Authority, leaving Israelis, who are avid gamblers, with no legal full blown terrestrial casino within the Israeli borders.

It follows that in order to establish a brick and mortar casino in Israel, a legislative change is required. Such will include an amendment of the penal law, but could very well see additional legislative changes, depending on the recommendations resulting from the abovementioned review by the Transport Minister and the Tourism Minister.

The Road Ahead

Naturally, a positive recommendation presented to the Prime Minister in respect of a casino in Israel is the first step in order to commence the very long process required so as to establish such a casino. After which, it can be assumed that the process will include, inter alia, the following:

  • A public consultation process as to whether and how to establish a casino;
  • Substantial legislative activity, in the form of primary and secondary legislation that will provide an all-encompassing legislative environment for such a casino (including, inter alia, anti-money laundering, responsible gambling, technical testing etc.).
  • A tender for choosing the casino operator;
  • A planning and zoning process; such process will include choosing the location of the casino, although it can be assumed that it is highly probable that Eilat will be chosen as the casino location.

All of the above and many additional actions, will take several years; however, it is highly advisable that any interested stakeholder will take note of the current review and future processes, and will be a part of these even at this early stage, so as to be able to provide its insights and educate the Israeli authorities. Given the past unsuccessful attempts to establish a casino in Israel, it is vital that this review and process will be handled properly, and any help that can be provided by relevant stakeholders is of the utmost importance.