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IN-DEPTH 12 July 2016
The Eastern Med: A new casino frontier?
Regional industry experts analyse casino licensing developments in Israel and Cyprus.
By Gareth Bracken


The potential creation of a casino in the southern resort city of Eilat has long been a topic of discussion in Israel. Current Prime Minister Benjamin Netanyahu first raised the subject back in the late 1990s during his first spell as leader, and then in 2003 during his tenure as finance minister. It was reported in local media last autumn that the Israeli premier had opened discussions with Transportation Minister Yisrael Katz and Tourism Minister Yariv Levin over the possibility of a casino on the current site of Eilat’s airport or near one of the city’s hotels.

Recently, it was reported that a committee is to be set-up to assess the potential for up to four casinos in Eilat. Netanyahu and Levin believe the introduction of casinos will boost the Eilat economy, particularly through tourism, and create jobs in both the city and its environs.

A government study has suggested that the casinos could generate annual revenue of $336m and increase international visitation to Eilat by 240,000. However it was also noted that national problem gamblers could increase by 30,000 requiring $2.2m every year to deal with the issue.

Aside from a state pool betting and lottery monopoly, gambling is illegal in Israel, although that isn’t to say that the locals lack an appetite for games of chance. “Israel is a dichotomy, because Israelis probably gamble more than many other cultures,” Israel-based consultant Peter Marcus, CEO of The Marcon Consulting Group told Gambling Insider. “Bulgaria, Romania, even Northern Cyprus are packed with Israelis who want to go and gamble. Even Vegas. There’s a complete demand for gambling.”

Despite this demand Marcus, a former Betfair and William Hill executive who has followed the Israeli gaming industry for many years, sees significant political obstacles blocking the progress of an Eilat casino. “Israeli politics is built on collations, agreements and broad consensus, and this is something that hasn’t got broad consensus,” he is keen to explain.

He notes opposition from orthodox religious parties – who hold a “massive amount of power in government” – and the country’s finance minister. “He grew up in a very poor neighbourhood and has seen how illegal gambling can ruin people’s lives. People have tried to persuade him but what he hasn’t understood, or not wanted to understand maybe, is that it’s better to allow gambling and control it, rather than ban it and have this nasty form of illegal gambling where there’s no controls and no social responsibility,” says Marcus.

He also believes that some opponents could possess a deeper political motive.

Under the terms of the 1993 Oslo Accords between Israel and Palestine, a casino was built in Jericho in 1998 and became hugely popular among Israeli gamblers, although it has long since closed. “This is just my supposition, but I think there’s a secret hope at the back of everyone’s minds that there can be a peace treaty with Palestine, and if that does happen there will be a need to have casinos in the Palestinian territory to bring in revenue,” he says.

For all of these reasons, Marcus feels the chance of a casino coming to Eilat in the near future is “very low”.

A slightly more optimistic outlook is offered by Tal Itzhak Ron, CEO of law firm Tal Ron, Drihem & Co. “We are under the impression that the government is starting to understand the economic potential in establishing a limited number of land-based casinos in Eilat,” he says. “The Israeli Prime Minister, Mr. Netanyahu, recently said to a source on our behalf that he desires to recreate Las Vegas in Eilat. But the vision isn’t free of obstacles, and the bottom line is that predicting the likelihood of a casino being approved in the area is a hard mission, and we are far from presumptuous. But we believe that for the first time in the history of Israel there is some actual hope for it.”

The suggestion that Netanyahu wants to recreate Las Vegas in Eilat will likely raise a few eyebrows, but Marcus does indeed see similarities between the two. “Eilat smells and feels a little bit like a very small version of Vegas,” he says. “If casinos were allowed, it would be perfect.” Eilat’s geographic isolation and special status as a VAT-free zone would both add to the appeal.

It is undecided whether Eilat casinos would be solely for tourists, or whether locals would also be permitted to gamble.

“In my view, opening it just for tourists wouldn’t work,” says Marcus. “Why would you go to Eilat when you can go to all the places around the world to gamble? The other issue is that 50% of Israelis have a second passport. So trying to manage the foreigners only rule would be an absolute nightmare.” Ron says the decision on whether or not to permit local gamblers will have “significant legal and regulatory implications” with regard to taxation, criminal acts and constitutional law, to name only a few issues.

As for the legal process leading to casino approval, Ron’s colleague Aviya Arika says the prime minister will first require enough support from the Knesset, the Israeli parliament. The next stage would be to “determine the supervisory authority” in charge of casinos, with Arika believing that a designated body will be established for this purpose, as opposed to simply extending the Israel Sports Betting Board. “Once the regulatory authority is determined and established, special provisions and regulatory demands will be put in place in order to clarify to the tender participants exactly what needs to be put in place and in what way,” she says. “We believe the way to regulatory consensus will be shorter.”


In mid-March the Cypriot parliament approved regulations relating to the establishment and operation of the first integrated casino resort in the Republic of Cyprus, the Greek Cypriot-controlled southern portion of the island, clearing the way for discussions with those organisations shortlisted for a licence.

The law allows for the operation of a single casino-resort and four “satellite” casinos developed by the same operator. Three of the four satellite casinos would only offer gaming machines, with the fourth also featuring table games. The government wants to award the single licence by September and have the casino operational within two years. The Cyprus Mail reports that an operator’s fee will cost €10,000, alongside other smaller fees and an additional annual fee, while taxation will be based on gross gaming revenue. It has been officially confirmed that NagaCorp, Bloomberry Resorts and a partnership between Hard Rock International and Melco are the three groups in the running to receive the 30-year licence.

“The new casino will be state-of-theart. It will be the biggest in Europe with a minimum of 100 tables and 1,000 machines, plus a luxury 5-star hotel”, says Lykourgos Vasmanoli, founder and owner of Cypriot casino consultancy Sunobel (

As for how popular a new casino would be, Vasmanoli tells Gambling Insider that it depends on the “vision and targets” of the successful operator, but says he believes that such a project has the potential to “change casino tourism habits internationally”. He describes the new casino as a “once in a lifetime experience for any visitor”, adding: “Why would people in the Middle East or Europe go anywhere else? You can travel to Cyprus at any time of the year and visit a large, modern casino, enjoy good weather and a good customer service mentality.

“People can bring their family and enjoy the biggest water park in Europe, restaurants or the nightlife of Limassol and Ayia Napa – areas that are famous worldwide.”

For these reasons and more, he believes the Cypriot casino market has “unlimited” potential.

Vasmanoli’s advice to the successful operator is to “think big and create an entertainment environment for customers of different ages and expectations”. He concludes that the eventual development should “give locals as many jobs as possible” in order to win over the Cypriot community.

“Cypriot citizens have a lot of money to spend – the winning company needs them on their side.”
IN-DEPTH 16 August 2019
Roundtable: David vs Goliath – Can startups really disrupt the industry?

(AL) Alexander Levchenko – CEO, Evoplay Entertainment

Alexander Levchenko is CEO of innovative game development studio Evoplay Entertainment. He has overseen the rapid expansion of the company since it was founded in early 2017 with the vision of revolutionising the player experience.

(RL) Ruben Loeches – CMO, R Franco

Rubén Loeches is CMO at R. Franco Group, Spain’s most established multinational gaming supplier and solutions provider. With over 10 years working in the gambling, betting and online gaming industries, he is skilled in operations management and marketing strategy.

(JB) Julian Buhagiar – Co-Founder, RB Capital:

Julian Buhagiar is an investor, CEO & board director to multiple ventures in gaming, fintech & media markets. He has lead investments, M & As and exits to date in excess of $370m.

(DM) Dominic Mansour – CEO, Bragg Gaming Group:

Dominic Mansour has an extensive background of nearly 20 years in the gaming and lottery industry. He has a deep understanding of the lottery secto,r having been CEO at the UK-based Health Lottery, as well as building from scratch, which he sold to NetPlay TV plc.

What does it take for a startup to make waves in gaming?

DM: On the one hand, it’s a bit like brand marketing; you build an identity, a reputation and a strategy. When you know what you stand for, you then do your best to get heard. That doesn’t necessarily require a TV commercial but ensuring whatever you do stands out from the crowd. Then you have to get out there and talk to people about it. 

AL: Being better than the competition is no longer enough; if you’re small, new and want to make a difference – you have to turn the industry on its head. Those looking to make waves need to come up with a new concept or a ground-breaking solution. Take Elon Musk, he didn’t found Tesla to improve the existing electric cars on the market, he founded it to create the industry’s first mass-market electric sports car. It’s the same for online gaming; if you want to make waves as a startup, you have to bring something revolutionary to the table.

JB: Unique IP is key, particularly in emerging (non-EU) markets. As does the ability to release products on time, with minimal downtime and/or turnaround time when issues inevitably occur. A good salesforce capable of rapidly striking partnerships with the right players is vital, as is not getting bogged down too early on in legal, operational and admin red tape.

How easy it for startups to bring their ideas to life? How do they attract capital?

AL: It depends on the people and ideas behind the startup. Of course – the wave of ‘unicorns’ is not what it used to be. Some time ago the hype was a lot greater in terms of investing in startups, but that’s changed now. Investors now want more detail – and even more importantly, to evaluate whether the startup has the capacity (as well as the vision) to solve the problem it set out to address. That’s not to say investors are no longer interested in startups – they certainly are – but now more than ever, it’s important for startups to understand their audience as well as dreaming big.

JB: To get to market quickly, you need a great but small, team. If slots or sportsbook, the mathematical engine and UX/UI are crucial. Having a lean, agile dev team that can rapidly turn wire framing and mathematical logic into product is essential. Paying more for the right team is sometimes necessary, especially when good resources are scarce (here’s looking at you, Malta and Gibraltar).

Building capital is a different beast altogether. You won’t be able to secure any funding until you have a working proof of concept and, even then, capital is likely to be drip fed. Be prepared to get a family and friends round early on to deliver a ‘kick-ass’ demo, then start looking at early-stage VCs that specialise in growth-stage assets.

How do you react when you see startups coming in with their plan for disruption?

RL: We welcome the innovation and fresh thinking startups bring. This is particularly the case in Latin America, with a market still in its infancy. One area we’d especially like to see startups making waves is in the slot development sector. Latin America is a young market that needs local innovation suited to its unique conditions – especially in regard to mobile gaming.

Operators eyeing the market have Europe‐focused core products, which creates a struggle to work to the requirements of players and regulators. To succeed there, it has become more important than ever to work with those with a knowhow of the local area to adapt products and games to besuitable from the off; we welcome the chance for local talent to develop and grow.

Do you think it’s easier for established companies to innovate and establish new ideas? 

AL: From a financial perspective, yes. It is without a doubt easier for incumbent companies to establish a pipeline of innovation via their R & D departments, as well as having the tools to hand for data gathering and analysis.

But it stops there. Startups hold court in every other way. Not only are they flexible, they can easily switch from one idea to another, change strategy instantly as the market demands and easily move team members around. Established companies know this – and this is why we’re seeing an emerging trend for established companies to acquire small, innovative online gaming start-ups. They have the right resources and unique ideas, as well as the ability to bring a fresh approach to businesses’ thinking.

RL: For me, it’s always going to be established companies. Only with the resources, industry experience and know‐how can a company apply technology and services that truly make a difference. Of course there are exceptions. But when it comes to providing a platform that can be approved by regulators across multiple markets – as well as suiting an operators’ multiple jurisdictions – it is simply impossible for a couple of young bright minds with a few million behind them to get this done.

DM: I actually think it’s harder for established companies. It’s key to differentiate between having a good idea and executing one. That’s where the big corporates struggle most. They’re full of amazing people with all sorts of great ideas but getting them through systems and processes is nearly impossible.

Is it essential to patent-protect innovative products?

AL: It’s a very interesting subject. If we take IT for example – patents can actually become a block to the evolutionary process within the industry. Of course, getting a patent future proofs yourself from the competition copying your concept but, having said that, if you’re looking to protect yourself from someone more creative, smarter and agile, you’ve probably lost the battle already!

In our industry everything is moving faster and research takes less time than the development itself. No matter how good you are at copy pasting, you can’t copy Google or Netflix. The most important thing is not the tech itself but rather its ‘use-case’ – or in other words, does it solve what it’s meant to solve? Competition is healthy and the key to innovation. If you spend your whole time looking behind you, you’ll never be able move forwards.

JB: Tricky question, and one that depends on what and where you launch this IP. It can be difficult to patent mathematical engines and logic, mostly because they’re re-treading prior art. Branding, artwork and UX is more important and can easily be copied, but the territories you launch will determine how protectable your IP will be once patented. US/EU/Japan is easy but expensive to protect in. But China/South East Asia is a nightmare to cover adequately. Specialised patent lawyers with experience in software, and ideally gaming, can help you better.