Hungary introduces igaming legislation to end state monopoly

Hungary’s parliament has introduced online gaming legislation which open the market to private online operators, bringing an end to the current state monopoly on sports betting.

In the previous iteration of Hungary’s gaming laws, written in 2014, land-based casino operators were allowed to apply for online casino and poker licenses, while online sports betting was restricted to the state-run Szerencsejáték Zrt betting monopoly.

Under the new proposals, operators within the European Economic Area will be free to launch online gaming offerings in the country with the permission of Hungary’s gaming regulator. There is so far no limit on the number of permits that can be issued.

Any operators who have offered igaming in Europe without a licence during the ten years before their application will be prohibited from operating in Hungary.

The legislation also allows the use of credit cards for online deposits, provided it is linked with an authorised payment service provider.

Any operator looking to obtain a licence must also have share capital of at least HUF1bn (£2.4m/€2.8m). Licence fees will cost HUF600m (€1.7m/£1.4m), paid to the Hungarian State Treasury. Operators are also obliged to provide a minimum guarantee of HUF250m, while the tax rate for operators is yet to be determined.

Changes to the legislation are designed to ensure a higher standard of player protection. Recognising that a more competitive gaming market could encourage excessive gambling, the bill stipulates that a player protection plan be drawn up by the operator “in accordance with the principle of responsible gaming and the protection of players”.

Text within the legislation explains: “In a liberalised online betting market, several private companies are competing with each other, so there is a danger of encouraging excessive gambling instead of maximising the principle of responsible gaming.

“Therefore, the draft aims to liberalize remote gambling by emphasizing the protection of players and introducing guarantee regulatory elements that protect the interests of players.”

The bill is subject to a standstill period following its notification to the European Commission, which runs until 4 May.

The Court of Justice for the European Union (CJEU) ruled in 2017 that Hungary’s online gaming rules were unlawfully excluding European operators from the licencing process.

This followed Kindred Group’s Unibet brand bringing the case to court, alleging that international operators were unable to meet Hungary’s conditions for online licensing.

Igamingbusiness