Crony of Anti-lottery Crusader Kahlon Was National Lottery Agent

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 Finance Minister Moshe Kahlon, in October 2015.
Finance Minister Kahlon, in 2015. Moving to lower the huge exporters' corporate tax to an especially low 6 percent.Credit: Michal Fattal

Last week Finance Minister Moshe Kahlon was scathingly critical of the Mifal Hapayis national lottery in general and its slot machines in particular. He called the profits from them “tainted” money and vowed to eliminate the lottery’s slot machines and betting on horse races.

But Haaretz has learned that Reuben Even-Tzur, a close friend and former partner in a real-estate venture with Kahlon, was from 2004 to 2014 the Haifa regional agent for Mifal Hapayis. The job involved installing and promoting the national lottery’s slot machines. Kahlon’s son worked for Even-Tzur, who contributed 10,000 shekels ($2,500) to Kahlon’s campaign for the 2009 Likud party primary.

Even-Tzur is a Haifa lawyer. He, Kahlon, and contractors George and Ghassan Mattar were partners in erecting a building with four apartments on Hayarkon Street in Haifa. The project was completed recently, and Kahlon is living in one of the apartments.

The four paid 5.5 million shekels for the building lot and the 1945 two-story building that they razed.

Kahlon previously lived in a building in Haifa’s Ahuza owned by Even-Tzur’s family.

In 2004 Even-Tzur won the tender to become Mifal Hapayis’ Haifa regional agent. Dozens of bids are usually received for these profitable franchises. Agents receive a commission of 1.5 percent to 2 percent of lottery sales in their turf, which can add up to millions of shekels every year.

Mifal Hapayis’ eight regional agents are responsible for sales promotions, field operations and setting up sales infrastructure.

Moshe Kahlon’s son was employed by Even-Tzur in the marketing operation. A senior Mifal Hapayis official told Haaretz that a few years ago Kahlon’s son was present when he met with Even-Tzur in his Haifa office, and Even-Tzur introduced him as Kahlon’s son. Even-Tzur declined to tell Haaretz what the younger Kahlon’s position was.

Even-Tzur was responsible for the slot machines in his area, those same slot machines that a committee headed by the Finance Ministry director general wants to stop licensing — a recommendation that Kahlon supports.

Some 9 percent of Mifal Hapayis’ revenues come from the slot machines, whose profitability is steadily growing. They are similar to slot machines in casinos; one model is a computerized Hish-Gad game of chance, while in the other model one must guess numbers.

Many slot machines are located in poor neighborhoods and communities. Some 21 percent of the per-capita income from slot machines comes from the second-lowest socioeconomic cluster (cluster 2), while another 13 percent comes from clusters 3 to 5. Even-Tzur told Haaretz that it’s the agent’s job to place the machines, but Mifal Hapayis sets the sales quotas. “If you don’t meet the objective, they take away the machines. The enterprise sets the goals and issues a warning to the marketer, and if he doesn’t meet the goal they give it to a different agent.”

Even-Tzur did not win a renewal of his contract when it expired, 18 months ago. He challenged the tender award in court, where it is still being adjudicated.

A figure in Mifal Payis who requested anonymity claims that after he lost the renewal he made threatening statements to senior lottery officials, saying he could bring his political connections to bear. In a response Even-Tzur said the claim was unworthy of comment.

“Money taken from people who are hard up by exploiting their addiction to gambling is a sick evil in an enlightened society. No cynical hints, absurd as they may be, will discourage me from acting to implement my social mission,” Kahlon’s office said in a statement.

“Reuben Even-Tzur is a family friend who gave me a legal, personal donation. The Even-Tzur family, my family and two other families bought a plot together to jointly build the residential building in which I now live, certainly not for business purposes.My son indeed worked for Reuben in a temporary job when he was a student. None of this changes anything about my position that slot machines and horse racing are a phenomenon that must be eradicated,” the statement from Kahlon’s office said.

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