Lottery Seeks to ‘Make Up’ With Kachlon

Two weeks ago, the heads of the Israel Lottery (Mifal Hapayis) grandly declared that they would no longer have anything to do with Finance Minister Moshe Kachlon, after he proposed instituting severe rule changes designed to discourage Israelis from participating in the lottery altogether. But over the weekend, at a general meeting of the Israel Lottery, it was decided to change that decision, and to engage in a dialogue with Kahlon on his proposals.

With the move, the Lottery takes the first step in defusing what had become a life or death situation for it. When the Lottery announced that it would have nothing to do with Kachlon as its response to the proposed rule changes, the Finance Minister threatened to pull the license of the Lottery altogether, effectively putting it out of business.

The bone of contention between the Lottery and Kachlon is the latter’s proposal to ban 550 gaming machines used by the Lottery, and to tax winnings as small as NIS 5,000 at a rate of 35 percent – the intention being to discourage Israelis from playing the lottery, which Kachlon sees as a regressive tax on the poor. In interviews, the Finance Minister has said that he sees gambling, including legalized gambling via lotteries, as a tax on the poor, as they divert much-needed funds from family obligations and expenses to the near-impossible dream of winning the big prize. The Lottery Authority had been planning on market growth of 10 percent this year, but Kachlon wants to reduce that to 3 percent.

Kachlon inserted the proposals into the Arrangements Law, which has been approved by the government and is set to be approved by the Knesset at the beginning of September. Therefore it’s unlikely that the law will be changed, as renegotiating that aspect of the Arrangements Law would invite a repeat debate on many other rules and expenditures that have been resolved.

In a statement issued at the end of the meeting, the Lottery said that it and the Local Authority, which is the main beneficiary of the money raised by lottery games, “is aware of the issues involved in games of chance and the dangers they entail. We intend to continue to expand our activities in this area, to help alleviate the negative effects of games of chance on the periphery and among the poor. We call on the Finance Ministry to discuss these issues together with us.”