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How Tel Aviv, Israel became a thriving Online Gaming hub

Published:

9 Apr 2019

Perhaps not the most obvious of places for an industry to be based, though Tel Aviv is home to some of the biggest online gambling companies in the world

Many iGaming companies have major claims on Israel’s capital and for good reason.

There are three main representatives of the gambling industry in the city; technology companies like Playtech, online companies such as 888 and William Hill and an abundance of affiliates – companies who attract customers to gaming sites through a variety of means, and this is big business.

Itai Freiberger of 888 reports: “The gambling industry is one of the great growth drivers for Israeli high-tech.”

In fact, many startup companies in Israel are associated with gambling and perhaps have an intriguing advantage over competitors in other territories.

A vast majority of employees on the Israeli gambling scene have a strong military background, highly skilled in analysing how to capitalise on opportunity, gaining advantages and understanding strengths and weaknesses – as such there was a much greater appetite for risk in an industry where grey areas often loom like a black cloud.

Israeli businessman, Gigi Levy, who was Chief Executive of 888 between 2007 and 2011 corroborates this saying: “When things are still fuzzy and unclear, you may find people from other countries less keen on taking risks, while Israelis move quickly.

“In the case of online gambling, no one knew what was right and wrong, and it required a lot of technical capabilities. It basically meant that the Israelis became leaders,” he added.

A platform of technology

Fundamentally, Israel’s biggest strength lies in the development of technology, which has helped a number the country’s industries (not just online gambling), become some of the best developed in the world.

The gaming industry in particular relies heavily on algorithms designed by developers, many of whom are ex-military tech intelligence, who acquired the requisite skills needed, where algorithms were applied to work analyse masses of data.

Such military intelligence units also taught teamwork, problem solving and mission orientation – in short everything needed to help build a hugely profitable business.

Levy agrees that this technique is an effective method in such an industry: “The ability to mine data to gain an understanding of your customers was always a forte of Israeli tech.”

The online gaming industry rely on algorithms who can pinpoint future players, reinvigorate fatigued players and sift through extensive amounts of player behaviour data in order for the company to understand how the business will perform and make projections based on such analysis.

Kings of gaming Marketing

While it could be argued that there is a strong case for there being a higher percentage of technologists working on the Israeli scene, interestingly, only 30 percent of companies hire development expertise, according to Eyal Solomon, CEO of Ethosia.

In fact, 70 percent, concentrate their efforts on marketing recruits. According to one digital marketer, working for an Israeli-based gambling company claims marketing far outweighs any other operation.

“The gambling companies have no technology,” the digital marketer claimed.

“It’s a turning wheel, behind which is a simple function of random number selection.”

“The real skill is roping in a client and getting him to spend money – 10 years ago, the name of the game was technological innovation. Today it’s marketing.”

While there is nothing concrete to support this, it is fair to suggest that both components play their parts in equal measure. Technology provides the sophisticated platform for clever digital marketing techniques and as such, Israeli companies have started to lead the way.

Tel Aviv in particular has almost become a hub dedicated solely to iGaming and the affiliate marketing arm of the sector claims a substantial stronghold.

It is an industry not for the faint-hearted. With hundreds of affiliate marketers competing with each other for a slice of revenue share from the operators, the clever affiliate companies, especially the smaller ones, focus on just one or two forms of gambling to promote.

Tel Aviv’s own, dedicated gaming affiliate conference, hosted once a year, offers proof of how serious the industry is taken in the city.

As more opportunities open up in the world of online gambling and Tel Aviv’s appetite for technology, the city can continue to lead the industry for years to come.