Lottery, Kachlon ‘No Longer on Speaking Terms’

The Lottery Authority (Mifal Hapayis) has declared that it is “boycotting” Finance Minister Moshe Kachlon, after he declared illegal “one-armed bandits” – the slot machines that are currently legal in some neighborhoods of Tel Aviv, Haifa and development towns in the north and south. A total of 550 such machines are to be removed – and the Lottery Authority, which receives income from those machines, is (all puns intended) up in arms.

The ramifications of said “boycott” were not clear, since the money raised by the Lottery does not pass through Kachlon’s Ministry; the funds are transferred directly to local authorities for the construction of schools and community centers, and to run local community programs. In any event, Finance Ministry officials said that the boycott was meaningless, as it is the Finance Minister and Ministry Director General who supply the Lottery with its license to operate, and they are legally bound to supervise it.

Kachlon last week declared a war against gambling of all types. Besides removing the slot machines, he declared his intention to tax lottery winnings of as little as NIS 5,000, instead of the current taxable threshold of NIS 50,000. The proposed tax could be up to 35 percent of a winner’s prize. In a statement, Kachlon said that “involvement in gambling is an unacceptable addiction for many people seeking a better life. It is a fantasy that ends up working against them, as it turns them into addicts. As a result, I will seek ways to implement this report’s findings into law.”

By instituting much higher taxes on lottery winnings, Kachlon hopes to discourage ticket sales – but it is those sales, along with income from the slot machines, that provide the Lottery with the money it needs to operate its programs. In its own statement, the Lottery said that Kachlon’s edicts “will mortally damage education, welfare, pensioners, youth and cultural events in many towns, especially in the periphery and among weaker populations.”

The moves will eventually hurt, not only the Lottery, but many local authorities, who depend on stipends provided by the Lottery for many programs. “All the heads of local authorities are taking our side in this attempt by the Finance Ministry to muscle in on their income, and to abscond with money that belongs to them via the games,” the Lottery said. “The local authorities will not allow this to happen. The Finance Ministry will have to make up every shekel lost by local organizations.”