GBI, a British company that operated a government franchise that allowed Israelis to bet on overseas horse races, is demanding compensation of as much as 200 million shekels ($57 million) after the government banned the betting.
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The company made its case at a hearing at the Finance Ministry chaired by director general Shai Babad, during which the company said it would not accept its contract ending early without getting significant compensation. Treasury officials said they were prepared to negotiate terms and talks are expected to get underway in the next few weeks.
The treasury confirmed the hearing took place but declined to provide any detail except to say that GBT made its claims and that they were being studied.
The hearing comes after the Knesset approved legislation banning betting on horses as the government tries to crack down on betting, even the kind run by the Council for Organized Sports Betting, popularly known as Toto.
The problem is that the council’s contract with GBT, a company that manages race tracks in the U.K. and offers a platform for overseas joint ventures for betting on horse races on its tracks, only expires in August 2018.
“Violation of the agreement and its unilateral cancellation should not be allowed when there has been no change in the conditions, and that a current examination of the public good requires the cancellation of the contract with the company for the purpose of conducting the horse racing.”
Israel has allowed betting on horses since 2012, but a government panel last year categorized betting on horses as no different than slot machines and other gambling and urged it be banned again.
GBT challenged that notion, saying the rate winning among Israeli bettors has grown in line with their increasing knowledge of gambling. The average bet ranges from 35 to 45 shekels.