After failing to reach an agreement to renew the operating license of Israel’s national lottery, Mifal Hapayis, the country’s 150 keno machines and 500 slot machines were shut down at midnight on Saturday, according to Israel news agency Haaretz.

The shutdown of the country’s automated games was a victory for Finance Minister Moshe Kahlon (pictured), who in August last year stated that as long as he held the office, he would not permit horse racing and slot machines. The statement was made by Kahlon at the time after reviewing a government report on gambling in Israel, which recommended limiting the growth of the industry and questioned the efficiency of the country’s two betting monopolies, the Sports Betting Council, known as Toto and Mifal Hapayis. The report was based on a comprehensive study by a committee headed by Justice Ministry director general Emi Palmor and treasury director general Shay Babad, who recommended that horse races and slot machines remain forbidden, among other recommendations.

In order to wind up talks that extended into New Year’s Eve, the Finance Ministry official’s agreement to a 48-hour extension of the organization’s license was conditional upon the slot and keno machines being switched off immediately.

The decision to shut down the machines was praised by Kahlon, who said in a statement, “Eighteen months ago I said there would no longer be slot machines in Israel, and I am very happy that from today, there aren’t any anymore.” He added, “I am hurt by the thousands of families that have lost their property, their money, their homes and even their families,” as reported by the news agency.

Mifal Hapayis is demanding that it be compensated for the estimated 800 million shekels ($208 million) in annual revenue the national lottery says it stands to lose without the machines. The treasury and local governments split the profits from the slot machines and the lottery, with the latter using its share to build public facilities. While Mifal Hapayis’ estimate was backed by the Union of Local Authorities, Finance Ministry officials said that because it is offering the national lottery organization the opportunity to conduct extra lotteries, the figure is actually less than 250 million shekels, according to the report.

In addition to the two weekly lotteries it currently holds, Mifal Hapayis says it wants to hold 14 more lotteries every year.

Other cost-cutting measures have been agreed upon by the two sides, including Mifal Hapayis’  agreement to reduce its stake to 7 percent of earnings, from 7.5 percent; approximately 750 million shekels annually. Final terms of the agreement have yet to be reached.

 

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