Ten Charged Over a Gambling Ring Run From a Prison Payphone

Prosecutors have filed an indictment against ten members of a gang that the Israel Police say ran an illegal gambling network and extorted gamblers out of millions of shekels. The case was built by the Economic Crimes Unit of the force's Northern District, working with the Migdal HaEmek station, the Israel Prison Service and the Tax Authority.

According to the police account of the investigation, the central defendant has been serving a prison sentence since 2020 and directed the gang's activity from inside, using a public telephone in the prison. On his instructions, the statement said, an illegal gambling operation was set up alongside lending lines charging interest of up to 120 per cent a year. The proceeds were laundered through the bank accounts of straw men, through concealed cash and through cryptocurrencies. The ten defendants are charged with extortion by threats, aggravated sabotage, money laundering, operating illegal gambling and providing loans on the grey market.

Gambling is close to entirely banned in Israel

Israel is one of the more restrictive gambling jurisdictions in the developed world. Chapter 12 of the Penal Law of 1977 prohibits prohibited games, lotteries and betting, and the International Comparative Legal Guide's survey of Israeli gambling law records penalties of up to three years' imprisonment or a fine of about NIS 452,000 for organising a game, and up to a year or a fine of about NIS 29,200 for taking part in one. Only three narrow exceptions exist: the national lottery Mifal HaPayis, the Israeli Sports Betting Board, and purely social games that are not run for commercial gain. Everything else (the card rooms, the football books, the online tables) is criminal, which is precisely what makes it profitable for organised crime.

The grey market where debts turn dangerous

The lending charges in this indictment point at the second half of that economy. Israel's grey market in non-bank lending has long served borrowers who cannot get credit from banks, and criminal organisations have moved into the gap. The Times of Israel reported in May 2021 that syndicates holding large amounts of cash effectively act as an alternative banking system for borrowers shut out of the regulated sector, and that collection escalates from threatening phone calls to shootings and, in some cases, killings. Lawyers and researchers quoted in that reporting identified mob lending as a significant driver of the rise in homicides in Arab towns. The 120 per cent annual rate cited in this indictment is the police figure for this case alone.

Straw men, cash and crypto

The laundering methods described (accounts opened in other people's names, physical cash and cryptocurrency) are the standard toolkit for moving criminal proceeds into spendable form, and they are why tax investigators sit alongside police in cases like this. Paper structures are used the same way in unrelated files: in an alleged protection racket in central Israel, The Jerusalem Post reported in April 2026 that security companies were suspected of issuing fraudulent invoices so that extortion payments would appear on the books as legitimate fees.

What the indictment summary did not say

The police did not name any defendant, give ages, or say which prison the central defendant is held in or what he was originally sentenced for. No figure was given for the total sums gambled, lent or laundered beyond “millions of shekels”, and the statement did not say how many people were extorted, how long the network operated, or whether the prison telephone system had been monitored or misused. None of the charges has been tested in court.