Netanyahu Dreams of Eilat Casino, but Opponents Fear Social Ills

Tourism minister has promised to keep resort town a family mecca, but coalition’s Shas party isn’t buying it.

Prime Minister Benjamin Netanyahu recently asked his tourism and transportation ministers to look into the feasibility of opening a casino in Eilat — a bold step considering abortive attempts in the past and a wave of opposition both inside and outside his cabinet.

At government ministries, the idea of an Eilat casino surfaces every few years. Regarding the latest effort, the Prime Minister’s Office admits that Netanyahu broached the subject with Tourism Minister Yariv Levin and Transportation Minister Yisrael Katz, but nothing specific has been agreed.

The Tourism Ministry, meanwhile, is considering letting hotel chains that operate casinos abroad open gambling rooms in Eilat. Another option is the opening of a casino on the site of the current airport in the Red Sea resort city. The small airport within the city limits is slated for demolition, and the site is to form part of a new hotel complex.

If approval is given, several years would pass before any Eilat casino opens. Then the police and the Tax Authority would do the supervising.

It’s no secret that the prime minister and his wife are very close to Las Vegas gambling magnate Sheldon Adelson, who in addition to casinos around the world and funding for U.S. politicians’ election campaigns owns the pro-Netanyahu daily Israel Hayom. In 2003, when Netanyahu was finance minister, he supported the opening of an Eilat casino.

“We plan on replicating Las Vegas in Eilat. The weather in Eilat is nice and similar to that in Las Vegas,” he said at the time.

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“There are beautiful beaches in Eilat, which Las Vegas doesn’t have. The word casino sounds like sin city, but it’s important to note that in Las Vegas, 83% of the revenue is from family vacationers and just 17% from gambling.”

Fear of crime

Tourism leaders want a professionally run casino supervised by the government.

“I won’t lend my support unless I know that Eilat won’t turn into a crime center. We have to provide a supervision mechanism that will prevent the place from becoming a locus of crime that crime families take over,” Levin, the tourism minister, told TheMarker.

“An attraction has to be created that will greatly boost the number of tourists coming to the city, which will create new jobs. At Eilat’s current rate of tourism, the new airport being built will be pretty empty.”

For now, the feasibility process is focusing on locating a site as well as predicting the costs and effect on tourism. Also, efforts would have to be made to prevent money laundering.

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Political opposition is rampant in the ultra-Orthodox Shas party, as well as in the Social Affairs Ministry and the police.

“Shas is adamantly against the opening of a casino,” said Deputy Finance Minister Yitzhak Cohen, a Shas member. “Proposals for a casino in Israel, which would cause a social disaster, should be stopped. The establishment of a casino would attract people to gambling and could wreck families and cause gamblers financial ruin. Casinos draw crime.”

Former Finance Minister Avraham Shochat once said opposition from Shas helped block plans in the mid-1990s for an Eilat casino. A special committee set up in 1995 considered the opening of a casino in towns including Eilat, Mitzpeh Ramon in the Negev and Sodom in the Dead Sea area.

The Rabin connection

Legislation was even crafted with provisions for government oversight. Shochat favored a casino and was among Knesset members who sponsored a bill to that end. The casino would have been overseen by Mifal Hapayis, the national lottery commission, but the legislation was never passed.

Haaretz’s Gidi Weitz has reported that on November 4, 1995, a few hours before Prime Minister Yitzhak Rabin was assassinated, he met at his home with Austrian casino operator Martin Schlaff.

Rabin had already met with Schlaff at the Prime Minister’s Office and asked Shochat and Moshe Shahal, the public security minister at the time, to meet with the Austrian as well. Rabin suggested that Schlaff operate the casino in Israel, but Shahal believed that international companies should compete in a bidding process.

In 2002, Schlaff tried to arrange for casino gambling on a ship outside Israel’s territorial waters near Eilat, an idea that ran into opposition and was scrapped.

Elyakim Rubinstein, the attorney general at the time, told the Transportation Ministry not to provide a safety permit for the ship or vessels that would bring gamblers to the ship until a team looking into the matter submitted its conclusions. Rubinstein objected to a casino directly linked to Israel; he wanted to “head off criminality and corruptive influences, the destruction of families, money laundering, and so on.”

Schlaff owned a casino that operated in the West Bank Palestinian town of Jericho, but after the outbreak of the second Intifada in the fall of 2000, it closed.

A 2008 paper written at the Knesset Research and Information Center notes opposition from the Social Affairs Ministry and the police to a casino — the reasoning was that gambling spawns violence, corruption, drug addiction and other ills. The document quotes opponents who said gambling served organized crime, while a casino would not curb illegal gambling activity that already existed.

“In addition to the legal gambling, hundreds of entities are running illegal gambling games including casinos, bingo, illegal Internet gambling, match fixing, slot machines and animal matches,” Uriel Tal wrote for the research center.

“The police estimate that hundreds of thousands of Israelis are addicted to illegal gambling and that the sector generates annual revenues of 10 billion to 15 billion shekels” — $3.8 billion at current exchange rates.

“The police say illegal gambling remains one of the country’s significant sources of crime both because of organized crime’s money laundering ... and the violence associated with it,” Tal wrote. “The police don’t believe that the opening of a legal casino would reduce illegal gambling activity.”

His report was discussed at the Knesset Interior Committee, at which Iris Mordokovich, as director of the Social Affairs Ministry’s addiction treatment service, testified.

“Even in locations where there is legal gambling, there is more addiction and criminality,” she said. “People spend money that they don’t have and sell their homes and children to finance their gambling. Legal gambling doesn’t stop illegal gambling.”