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Israeli start-up culture influences the online gaming industry

Online gaming is now one of the fastest-growing industries on the planet

Israel's start-up successes have gone on to become a global phenomenon (photo: Courtesy)
Israel's start-up successes have gone on to become a global phenomenon (photo: Courtesy)

With a strong focus on skills and a start-up culture that continuously pushes innovation to the fore, Israel has long since acted as a beacon for technology companies the world over. Our start-up success rate is an enviable one and many business models first incubated in Israel have since gone on to become global phenomenon. A prime example of this is online gaming, an industry that’s estimated to be worth approximately $39.5 billion.

From its humble beginnings in the early 90s, online gaming is now one of the fastest-growing industries on the planet – an industry that owes both its success, and indeed its very existence, to the spirit of Israeli entrepreneurship.

Although online gaming remains strongly controlled and regulated by the government domestically that doesn’t stop Israeli companies from operating in external markets. Nor has it stopped them achieving, and consistently maintaining, a dominant position globally.

Israel, in essence, serves as the backbone of the industry thanks, in no small part, to an abundance oftalented and highly motivated professionals. Israelis employed in the online gaming sector include designers, developers and allied IT and marketing professionals, working in a supporting role for many leading companies.

From Small Start-Ups To Global Leaders

Last month Diwip, a start-up from Tel Aviv focusing on social gaming and slots, successfully negotiated a price of $100 million in a takeover bid by Imperus Technologies Corporation of Canada.

Diwip’s success is just the latest example in a long line of Israeli companies leading the charge in the online gaming sector. Others include PokerStars, the world’s largest poker site, founded by Isai Scheinberg back in 2001.

The company, which was purchased by game developer Amaya in June of this year, is based in the Isle of Man, a small British protectorate situated between Britain and Ireland where many other major online gaming companies are located.

Playtech, also based in the Isle of Man, is yet another Israeli success story and a market leader in digital gaming software used by gaming machines and online casinos alike.

Founded in 1999 by Teddy Sagi, Playtech floated on the London Stock Exchange in 2006. In addition to the Isle of Man, the company also employs staff in Israel, as well as on the UK mainland and the British territory of Gibraltar – the gaming industry’s answer to Silicon Valley.

The Gibraltar Connection

As a British territory, Gibraltar enjoys full EU membership while retaining the Pound as its official currency. It also enjoys the dual distinction of having the most sought-after gaming licenses in the industry and being the most popular base for online gaming companies.

Topping the list is 888, one of the most instantly recognizable brands in the business and among the largest online casinos in the world. Founded in 1997 by two pairs of Israeli brothers, the gaming colossus straddles the Mediterranean with key offices in both Gibraltar and Israel.

BWin Party, meanwhile,whose brands include BWin, PartyPoker and Foxy Bingo, is another gaming giant who maintains a strong presence in both Israel and Gibraltar.

Other notable casinos incorporated in Gibraltar include William Hill, Ladbrokes, Gala Coral Group,Mansion, Bet 365 and Betfair – all of which have partnered, or continue to partner, with Israeli-born software trailblazers Playtech.

Startup Gibraltar

The small British territory on the southern tip of Spain lies at a critical junction point between the Mediterranean and the Atlantic, making it a highly strategic shipping location and thriving financial center.

Gibraltar’s attraction to online gaming companies is obvious; a favorable climate, compelling financial incentives, a robust economy and globally respected licensing from a welcoming government. While this could also be said of other jurisdictions, such as Cyprus and Malta, Gibraltar’s ties to Israel run much deeper.

For one, Gibraltar has a long-established Jewish community dating back over 650 years. When the territory was ceded by treaty to Britain in 1713, Gibraltar acted as a safe haven for Jews facing persecution in Spain. Gibraltar’s Jews repaid the kindness by valiantly defending the peninsula from repeated attempts by Spain to reclaim the territory. Today, as always, Gibraltar’s Jewish community continues to play an important role in the country’s political, commercial and cultural development.

Second, the often-turbulent history of the small nation, marked by long-running (and still ongoing) territorial disputes with its larger neighbor, means that Gibraltarians can easily identify with Israelis, both with the struggles of our past and the triumphs of our contemporary startup culture.

Today, not only have the seeds of Israeli industry taken root and flourished in Gibraltar,local companies, spurred on by the local government,have in turn been inspired to start planting seeds of their own.

The current poster child of these “new wave” Gibraltar startups is Lottoland Ltd, an online lottery company with offices in Gibraltar and Hamburg. The company’s head office in Gibraltar, located in the exclusive harbor district of Ocean Village, exemplifies the Israeli startup model with its chic aesthetics, open office culture and strong emphasis on creativity and cutting-edge technology.

Next year sees the opening of Gibraltar’s own World Trade Center, a state-of-the-art, fiber-connected business hub where more exciting new Gibraltarian startups will share offices with Fortune 500 companies like Lloyds Banking Group, J.P. Morgan, MasterCard, Royal Dutch Shell, Vodafone and Apple. The overall goal of the project is to finally and indelibly stamp “The Rock” as a hub of global business and innovation.

Gibraltar’s position, both geographically and politically, has made it a strategically valuable location and its citizens worked hard toforge its success. Still, there’s no denying that thislatest surge of investment also owes a lot to the explosive growth of online gaming – an industry that might well not even exist were it not for the pioneering spirit of Israeli entrepreneurs.


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