Challanges for Israeli Companies supporting Gambling Operations

Despite online gambling being an illegal activity in Israel, Israeli companies are involved in large numbers in the industry, including by providing “ancillary” services to the gambling companies such as development services or marketing.

Where such “support” activities are performed from Israel, which is not, on its face, illegal under Israeli law, such companies equip themselves with legal opinions confirming the legality of the activity, in order to avoid criminal liability.

In recent years, the industry has seen stricter regulation, including with respect to KYC and AML. Among others, it’s been significantly harder to open bank accounts for companies having anything to do with gambling.

In Israel, companies are receiving out of the blue requests from banks to provide legal opinions confirming “they are not involved in gambling”, or “that they are in compliance with gambling law where they operate”…

Failing to do so may result in the bank blocking payments or even closing the account. Therefore, prudent companies should minimize liability by getting familiar with restrictions on gambling related activity in Israel and having their answers ready if the bank decides to review their activity.