Gambling regulation amended in Hungary

New amendments will be brought into effect in Hungary regarding the gambling act of 1991.

What are being described as “technical measures and reforms’ will be implemented by the Supervisory Authority for Regulatory Affairs (SZTFH) in the hopes of ending Hungary’s sports-betting state monopoly run by Szerencsejáték Zrt and replace this with a competitive licensing process. These changes also aim to protect consumers through a new, re-regulated gambling industry.

These regulatory amendments come as the latest addition to a process that began in 2017 when the European Union’s Court of Justice ruled Hungary’s original gambling act as unlawful. The first significant step came about in February 2022 when new legislation was introduced, aiming to reform regulation based on law in neighbouring European states.

In addition to the implementation of this new direction, further amendments came into effect on January 1st, 2023. Stating that in order to attain authorisation from SZTFH, an operator must have at least 5 years of previous experience offering online gaming services in the European Economic Area. The law also forbids the awarding of a licence if the operator has been involved in the broadcasting of unlicensed gaming within 5 years of the application date.

This law also established a HUF10m application fee and a licensing fee of HUF600m. A share capital of at least HUF1bn. Operators who are afforded a licence must also pay a supervision fee of 2.5% and a gaming tax that will amount to 15% of gross gambling revenue. The supervision fee will only amount to HUF10m in total costs.

The adoption of this new legislature also sees new technical changes, such as allowing players to participate using multiple balances with the same operator, as well as the ability to cash out early in applicable circumstances. This will be subject to the same laws governing payment of winnings.

It will also be mandatory for licensed operators to explicitly inform players about the increased risk of excessive gambling along with addiction that has been linked to the early cash-out feature. The communication related to this message must be explicit and prominent on all promotional texts and on the respective gambling websites.

What is peculiar is, as of yet only the former owner of the gambling monopoly in Hungary, Szerencsejáték Zrt are the only operator to have been granted a licence. Along with 3 land-based casinos who have also received approval but no other online retailers as yet. Perhaps it is too early to judge whether or not these amendments will alter the gambling industry’s landscape in Hungary or if the new regulations will just be a re-configuration of the same components.

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