BUSINESS

Israel puts online gambling under scrutiny as Playtika sold to Caesars

TAGs: Caesars Entertainment, Israel, Playtika

israel-playtikaIn what is being described as the longest report ever submitted to Israel’s Knesset, State Comptroller Micha Lindenstrauss delivered a detailed critique of the country’s public sector failings, including its inability to eradicate the scourge of online gambling. The report called for better cooperation between police and the ministries of communications, justice and finance, and for the Bank of Israel to establish better mechanisms with which to combat illegal online financial activity. The report didn’t spare Mifal HaPais, Israel’s legal gambling monopoly, which was found to have changed the rules of some of its lotteries — in some cases, dramatically lowering the odds of winning — without the knowledge or approval of the Finance Ministry. Oy…

Bad timing perhaps to announce that Israeli social games developer Playtika Ltd. has sold 51% of itself to Caesars Entertainment for a reported $80-90m. Playtika was founded by Robert Antokol and Uri Shahak, the latter formerly 888 Holdings’ Senior Games Manager. Israeli business paper Globes claims Playtika received its start-up capital from former 888 CEO Gigi Levy, 888 investor Ofer Lezovsky and former Empire Online VP Avner Yasur. Caesars’ willingness to acquire the company is unusual in that Playtika was only incorporated a year ago and so far generates a monthly turnover of only about $100k. But hey, with $18b in debt, Caesars may look at Playtika as a lottery ticket. If it pays off, mazeltov. If it doesn’t, what’s an extra $80m when you’re $18b in the hole?

TechCrunch senior editor Sarah Lacy feels Israel is a nurturing environment for internet startups. Her new book, Brilliant, Crazy, Cocky, points to the country’s mandatory military service as breeding the type of entrepreneurs who can creatively problem-solve amidst tough constraints. “Authority asks to be challenged. There’s this idea that the smartest, scrappiest people should be in charge, not the ones that have the most experience.” While conceding that few Israeli consumer-focused software startups have hit home runs over the past decade, Lacy told Inc.com that she believes “there’s actually a lot of good gambling industry things done in Israel, because they’re solving cryptography and fraud issues … A lot of what you use to, say, track down terrorists, are the same skills you use to find someone who is laundering money from your company, for instance.” Does that mean the Seal Team Six crew that nailed Bin Laden are now hunting the Black Friday indictees? Uh-oh…

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