Trump and Adelson Bowed Out, but Eilat’s Casino Dream Lives

Would it be placed in a hotel, the airport, offshore, in one of Eilat's languishing development projects? And would it even be good for the city?

A panorama of Eilat and Aqaba, November 12, 2019.
Ofer Vaknin

The southern resort city of Eilat has dreamed of having a casino for almost 30 years, when Yitzhak Rabin’s government kicked the idea around with tycoons Sheldon Adelson, Martin Schlaff and Sol Kerzner. Rabin’s assassination and the second intifada put an end to that.

The casino never came but in recent months Prime Minister Benjamin Netanyahu has expressed support for opening one in the city. Amir Levy, the Tourism Ministry’s director general, said if there’s ever going to be a casino in Israel, it will be in Eilat.

Levy says the obvious site is in one of the city’s hotels, but more recently there’s been talk of putting it at the Ramon International Airport, the new international gateway to the resort town located 18 kilometers away (11 miles) away.

“If the transportation minster orders the Israel Airports Authority to prepare a casino plan they’ll do it. But I don’t think there’s any time to waste. Eilat need new growth engines and quickly,” said Levy, who said he prefers the hotel alterative.

“We need to hold competitive bidding where the hotel chains operating in Eilat compete and there will be five locations. The hotel chains know the ins and outs of doing it very quickly – any other solutions will take years.”

Among the possible sites with a space big enough to house a casino is the Princess Hotel, which has been standing unused for the last four years after it was bought by the property developer Nitsba Holdings.

Priel Arrias, Nitsba’s CEO, is also bullish on the casino idea and said the company had wanted to pursue it. Meantime, it’s due to re-open as a casino-less hotel next year.

“The Princess Hotel we leased to a Turkish hotel management company, Swandor, for 10 years, but the contract doesn’t preclude a casino in the hotel. ... I have no doubts that if they let us develop a casino in Eilat, it will be good for all the city’s hotels. Instead of tourists going to other places, like [Egypt’s Taba], they’ll stay in Eilat,” he said.

Martin Tessler, the son of the German hotel owner Alexander Tessler, who built the Princess in 1992 and operated it until 2015, had long hoped for a casino in the city and says he has the best location.

“To open a casino you need a lot of space on a single floor. Only at our Herod’s Hotel is this possible. The idea had once been to use the halls on the entrance floor and the disco on the minus-2 floor, but it never got to any practical stage. In 2005 [the French-Israeli businessman and politician] Shmuel Flatto-Sharon said he had the connection in the Knesset and he would get the approvals. He didn’t succeed,” said Martin Tessler.

Another candidate is Kings City, a biblical theme park that was closed in 2015 but is undergoing an upgrade and expansion and is due to reopen under the aegis of the tourism real estate developer Bercleys. CEO Moti Green believes the theme park would made an ideal place for gaming.”From the point of view of space, we have it. Even the setting of the City of Kings is the ultimate for a casino, and it is of course possible to make area adjustments,” he said.

But he’s not sure a casino would benefit the entire city. “Someone who loses $1,000 at the roulette table is not going to be in any mood for shopping,” he explained. “I’ve lived in the U.K. for many years, and have noticed that casinos are no longer in commercial areas. They prefer to stand alone. A casino will help Eilat – it will make it popular, young and interesting. Concerning adjacent businesses, I don’t know.”

Yoav Igra, the founder and owner of Eilat’s Herod’s Palace Hotel (together with the Fattal chain), tried hard for a long time to bring a casino to the city. He’s no longer a believer.

“I no longer think the city’s problems can be solved by a sugar pill. If a casino comes, another sort of population will come to Eilat and that will affect the city’s residents. I think that’s wrong,” Igra said, adding, however, that if there is a tender he might yet make a bid.

Ramon Airport, a 1.7 billion shekel ($490 million) facility, opened last year amid high expectations. But it’s failed to meet them as the number of domestic flights arriving from Tel Aviv has plummeted since the closure of Sde Dov Airport.

Eli Lankri, Eilat’s deputy mayor, said his boss, Mayor Meir Yitzhak Halevi, broached the idea of a casino at the airport with Netanyahu, who responded positively. The Israel Airports Authority says it is also on board with the idea. Yehudi Mordi, an assistant to the mayor, said a casino would give a boost to the troubled airport.

“The minute the Eilat municipal council expressed support for a casino, I recommended that it be part of the airport complex because it’s a sterile place,” he explained. “The latest figures on airport activity increase my worries that it’s going to be a white elephant. If we build a casino there, people will fly in. Ramon is on the Jordanian border and the casino could be deemed ex-territorial, so we can attract gamblers from Jordan and the Gulf states.”

It would also be a boost to Eilat’s 2,000 taxi drivers, who would earn extra fares shuttling gamblers to and from the airport casino.

Why not inside the city?

“A casino needs to be under government ownership, not controlled by hotels or private interests,” Mordi said. “The profits would enable the city to stop collecting municipal taxes and it would provide employment.”

He is concerned about the negative effects of gambling, but said a government-owned casino would be better able to mitigate its effects – for instance by limiting local residents’ entry to once a month or only to those with a foreign passport.

Gabi Kadosh pushed for a casino when he was Eilat’s Likud mayor from 1993 to 2003.

“Not a few tycoons came to meet at the start of my term in Eilat about establishing a casino,” he recalled. “Sheldon Adelson was the first.” Just a month after he was elected, Kadosh got a phone call from then tourism minister Uzi Baram, of the Labor Party, who arranged a meeting between him and the U.S. casino mogul.

“Today’s it’s hard to imagine, but Adelson actually got from Rabin’s Labor government a planning permit to erect a convention center on Eilat’s East Lagoon. Adelson wanted to build a casino on the Jordanian border, where gamblers from the Gulf would go,” said Kadosh. He got 65 dunams (about 16 acres), and later they built Eilat’s Ice Mall on some of it.”

“Adelson wanted a free trade area on the Jordanian border with two entrances – one from Israel and one from Jordan,” said Kadosh. “When I travelled with Rabin to the White House, Adelson was invited, At the signing ceremony of the Israel-Jordan peace agreement, I discussed joint projects with Adelson. Eventually he gave up and moved on to big projects in Macao and Singapore.”

Baram tells a somewhat different story. He said he didn’t want to give Adelson a casino license. Baram wanted to develop a casino in Timna Park, north of the city, to keep it a distance from the city’s residents.

In any case, Baram recalled, Rabin supported the casino idea in principle. Finance and tourism ministry delegations paid visits to casino cities, and the mayor of Las Vegas was brought to Eilat to make the case for casinos. Sol Kerzner, who developed South Africa’s Sun City resort, was another candidate to develop gambling in Eilat.

The cabinet had been scheduled to approve the recommendations of a government committee the day after Rabin’s assassination. Eventually they were approved, but by that point the momentum had been lost., Baram said.

When Netanyahu took office as prime minister in 1996, the prospects for regional peace diminished and so did the interest of overseas tycoons in an Eilat casino.

“We tried to interest Donald Trump in building an Eilat casino,” recalled Kadosh. “At the beginning he showed interest. We reached an agreement with him in 1997 to hold the Miss Universe contest in Eilat. … A year later I traveled to the United Nations with a Netanyahu delegation to sign a Miss Universe contract, but the negotiations collapsed: Trump insisted that the money to pay for the competition would come from the government rather than commercial sponsors. ... When Miss Universe failed come to fruition, Trump didn’t want to hear about a casino in Eilat.”

The Austrian billionaire Martin Schlaff did succeed in opening a casino in the West Bank town of Jericho, but it was closed in the early days of the second intifada. Schlaff tried to lure Israeli gamblers with a floating casino, Cancun, which docked at Eilat.

As Kadosh recalled: “He didn’t consult with us in advance, Eilat Port wouldn’t agree to have a casino ship dock, so I took him on a walk on the beachfront to discuss other docking alternatives. … Eventually he opted to go with Yoav Igra’s idea of a boat that would take gamblers from the shore to a ship waiting in the middle of the sea. The attorney general at the time, Elyakim Rubinstein, didn’t like the idea of a casino. There was a big political ado, and eventually the casino ship was raided and its activities stopped. In my opinion, it was a mistake. The casino ship could help the city.”

Igra, a business partner of Schlaff’s, blames politics for the absence of a casino in Eilat till this day.

“I don’t think the Haredim alone stopped the casino,” he said. “There’s also opposition also the secular parties. A big opponent is Finance Minister Moshe Kahlon. He blocked the last attempt three years ago. Before him, Yair Lapid blocked it.”