Article 225 of the Israeli Criminal Law (Prohibition of Gambling) prohibits the organization of gambling or gaming activities. A violation of this article carries a jail sentence of up to three years.
The question presented to the court was whether or not the Victor Chandler's activities constitute a violation of the Israeli Criminal Law. Does the fact that Israeli citizens gamble online in the foreign website render its managers and owners as alleged violators of the law and its articles pertaining to gambling activities?
The court ruled that VC translated its website into Hebrew and advertised that website in Israel in variety of medias, demonstrating that the plaintiff and the company had a clear intention to reach a target audience in Israel. The use of Hebrew and effective advertising means was intended to lure the target audience to gamble through the website. Even the act of advertising gambling is an offense according to Article 227 of the Criminal Law.
Judge Ohad rejected the plaintiff's argument that he and the company do not have any relation to Israel and should be exempt from the Israeli Criminal Law. Mr. Carlton based his argument on the fact that VC's management, operations and servers are located outside of Israel. Judge Ohad concluded that it is not possible to severe the connection between the company's operations abroad and the participation in gambling of Israeli residents.
According to Article 7 of Israel's Criminal Law, an offense is regarded as if it was committed in Israel even if only a part of it was committed here. In such case, Israel's jurisdiction extends to the offense and its perpetrator. Court decided that the fact that Israeli residents participate in the gambling activity from Israel by a click of mouse, extends the court's jurisdiction to the alleged perpetrator, the plaintiff. Judge Ohad reasoned that abstention from enforcing the law on online activities is absurd. It will render the law an empty vessel and will effectively allow any illegal activity that will take place in cyberspace. Furthermore. she found that the location of the content is peripheral: the emphasize should be placed the location of the end-user's computer and the person (the gambler) that uses it.