Hungary is a Central European state that has legalized all types of gambling entertainment. The country’s legislation clearly regulates the rules for working in the gambling industry both in land-based establishments and in the online segment.
The largest provider of gambling in Hungary is Szerencsejáték. Owned by the state, until 2012 it was a monopoly in the country’s gambling business. The provider had exclusive rights to all lottery games, owned one of the two casinos that existed at that time, and invested in the other.
Since 2012, significant changes have been made to the legislation on the regulation of the gambling business. They have allowed other companies to expand the opportunities for the development of offline and online markets.
Gambling legislation in Hungary
The process of legalizing gambling in Hungary began back in 1991. Then modern laws were adopted to regulate the gambling market:
- Law No. 34 “On Gambling” is the main act on the basis of which the gambling business is regulated both in land-based establishments and on online resources;
- Law No. 16 “On Concession”, which secured the exclusive right to provide gaming services to the state.
The first provider in the country was the aforementioned state-owned company Szerencsejáték. Received a monopoly on the provision of gambling services, she was initially responsible for managing lotteries. The sports betting market was controlled by its subsidiary TippMix.
In 2005, the Hungarian Minister of Finance signed Decree No. 32, the provisions of which determine the rules for licensing gambling and monitoring their observance. The country continued to maintain a monopoly policy. Third-party companies – representatives of the gambling business of other countries – did not have the opportunity to develop the Hungarian market.
The situation began to change in 2006 when the owners of Sportingbet.com turned to the European Commission for support. The very next year Hungary received a warning to open the market. Thus, the state authorities were forced to think about amending the legislation.
Subsequent changes to the law were made in:
- 2010. Introduced a 30% tax on poker winnings received at land-based casinos;
- 2011. A market opens up for foreign online providers;
- 2012. Determines the licensing conditions for foreign operators, allowing them to work in Hungary;
- 2013. Government grants licensing rights for 11 land-based casinos;
- 2015. Detailed Rules for Responsible Gaming published.
However, the conditions for organizing casino activities in the state are quite strict. As a result, foreign providers are not too eager to enter markets.
Hungarian Gambling Regulator
The responsibility for regulating the gambling market is vested in the Gambling Supervision Department, which is part of the Hungarian National Tax and Customs Administration. The tasks of the department are:
- licensing of gambling companies;
- control over the implementation of operators’ activities and compliance with the provisions of the current legislation;
- keeping registers, accounting audit;
- identification of violations in the work of providers;
- conducting relevant investigations;
- imposition of fines and sanctions;
- suppression of the activities of unlicensed companies.
The administration works in collaboration with the National Office of Public Affairs and the National Office for Consumer Protection.
The Ministry of National Economy is in charge of legislative issues in the gambling industry.
Activities subject to licensing, conditions for obtaining licenses
All types of gambling are subject to licensing in Hungary:
- card games (poker);
- bookmaker bets (on sports or other events);
- activities of land-based and online casinos;
- slot machines;
- various types of lotteries, including bingo, keno, joker.
However, the organization of land-based casinos and poker clubs in Hungary is still a state monopoly. In other words, these types of activities can be carried out either by specially created state-owned companies or by firms that have received a concession.
Today there are 9 land-based casinos operating in Hungary:
- Sopron in Sopron;
- Win Gyor in Gyor;
- Grand Casino in Deprecen;
- Onyx – to Niregyhaza;
- Las Vegas Casino Atlantis, Las Vegas Casino Atrium EuroCenter, Las Vegas Casino Corvin, Las Vegas Casino Sofitel, Tropicana Casino in Budapest.
Private companies are also entitled to organize the operation of slot machine halls. Entrepreneurs wishing to open a gambling club must:
- register a company with an authorized capital of at least EUR 180 thousand. The company is allowed to engage in only one type of activity;
- get a departmental certificate;
- find a room that meets the requirements and hire staff;
- purchase and install gaming machines no older than 5 years from the date of their release;
- obtain licenses for slot machines and a gambling hall.
A departmental certificate is valid for 1 year, the cost is about 18 EUR. The document is issued within 30 days from the date of the request.
Licenses themselves are also divided into several categories:
- for slot machines of the 1st group – machines capable of bringing at least 80% of the bets for every 100 thousand games, but no more than 200 sizes of each individual bet;
- devices of the 2nd group – video slots that accept no more than 200 conventional units at a time, and “give out” the winnings no more than 25 times the size of the bet.
For each apparatus in Hungary, it is necessary to issue certificates. To do this, slots must meet a number of requirements:
- used for no more than five years from the date of issue;
- have production numbers and built-in controls.
To open the hall, you must choose a room with an area of at least 90 sq. m: 75 – for installing slot machines, 15 – for organizing a bar. The “suitability” of the premises is confirmed by the professional assessment of the City Hall. The minimum cost of the conclusion is 16 EUR. The tax rate is formed from several components:
- tax on slot machines;
- hall tax;
- 10-30% from net income.
The last tax varies depending on the profitability of the establishment.
Online gambling in Hungary
Online casinos are also legal in Hungary. The first games for Internet resources were released in 1998 by Szerencsejáték. Since 2002, the citizens of the country have been able to place sports bets via SMS.
The final changes, effective as of 2017, were made in July 2013. It was then that the state granted the right to organize online casinos to foreign operators.
The activities of gambling resources are regulated by the Law on Gambling of 1991 and changes introduced later. The monopoly right to open an online casino belongs to the state. To create a resource, you must obtain the appropriate concession.
The company that opens the portal must have a legal address in Hungary. The license to organize the activities of Internet resources is valid for 5 years.
However, according to well-known operators, opening an online casino in Hungary is associated with high costs. As a result, foreign providers did not seek to obtain licenses. Today, licensed Internet portals created by well-known operators are practically absent in the country.
Hungary Online Casinos
The first licensed online casino in Hungary – the Vegas portal – only opened in February 2017. The site is owned by LVC Diamond. The collection of slot machines includes models of famous developers: Microgaming, iSoftBet, Play’n GO.
In April, the casino signed a cooperation agreement with the Greentube company. Thanks to this, Hungarian players got access to the popular slots of the manufacturer Sizzling Hot, Book of Ra, Lucky Lady´s Charm and others.
In addition, users will be able to play roulette, video poker, blackjack, table games with live dealers.
The site has a good selection of payment systems. For transactions, credit cards and prepaid cards, bank transfers, popular European EPS are available: Skrill, Neteller and others.
Prospects for the development of the gambling business in Hungary
It is rather difficult to predict how successful the development of the country’s gambling business is. Experts differ on this.
On the one hand, many Hungarian citizens have a negative attitude towards the development of gambling. The corresponding policy of shaping public opinion is carried out by the mass media. In thematic programs, the issue of the negative impact of gambling on the psychological health of the nation is often raised.
In addition, market participants note rather strict licensing conditions and a high level of expenses for organizing activities.
However, there are also positive factors. Well-known operators are persistently seeking to change the situation. An example of this is the aforementioned casino Vegas.hu. Its owner not only managed to open an online portal, but also attracted eminent partners for cooperation. Considering that the newly launched website is one of the few offering a Hungarian interface, we can predict its high popularity.
In addition, the Hungarian authorities have once again received relevant recommendations on amendments to the current legislation from the European Union. Following a complaint from Unibet about “discrimination and lack of transparency in laws”, the EU advised new amendments to the 1991 Gambling Act.
Once the Hungarian government heeded similar recommendations. Operators hope for a favorable outcome this time too.
And finally, one of the most anticipated events is the creation of “Hungarian Las Vegas” – the largest gambling center being built by the Austrian tycoon on the border of Hungary and Slovakia. According to preliminary estimates of the Ministry of Finance, the state will be able to receive about USD 2.5 million immediately after the project is launched. And this amount is the arguments in favor of the development of gambling in the country.
Hungary is a country with a legalized gambling business, but strict conditions for its organization. However, given the changes in the market observed over the past few months, it is possible to predict the further development of the industry in a more favorable and dynamic regime.