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Hungary changes its gambling law to end the state monopoly

Online gambling is about to get a new look in Hungary after the national lottery monopoly, which controls all of the online gambling industry in the nation, decided to loosen up to meet European Union regulations by opening up the market and allowing free competition ending the monopoly. It is declared legal to gamble online, in Hungary but the strict laws made it hard for operators who are non-national to penetrate the Hungarian market.

Online gambling started in 2013 after enormous pressure from the EU and gambling investors. Before 2013 you could only gamble in land-based casinos in Hungary, and they were very few; thanks to online casinos, you can gamble anywhere in Hungary so long as you have good internet on your tablet or your phone.

 Hungary’s gaming laws were first written in 2014 when the land-based casino owners were permitted to apply for licenses for online casinos and poker. Where the Szerencsejáték Zrt, which is run by the Hungarian government, was running a sport betting monopoly. But now, the Hungarian parliament has introduced online casino and poker legislation, which will end a monopoly on sports betting and open the market to private online Casino operators.

The legislation with titles 2022/66 HU and 2022/67/HU seeks to create licensing for private sportsbook operators. This came two years after the court of justice ruled in favor of the kindred group. The kindred group wanted to launch its services via Unibet, where it argued gambling supervisory unit of Hungary was unfair to operators from outside Hungary.

The ruling stated Hungary’s gambling legislation was not compatible with the fundamental principles of EU laws. In 2018, sporting odds appealed to the continental court, referencing a kindred ruling asserting Hungary’s online gambling as a violation of EU freedom.

With the help of the two rulings, the new draft aims to introduce a new regulations framework for sportsbooks, slot titles, casino table games, and many more. The bill is still waiting for Hungarian parliament approval.

This legislation will allow other operators to come on board and give Hungarians a broad gambling market. The Hungarians hope the new operators will bring onboard great casinos as reviewed on online-kaszinó.com to maximize the entertainment value they can get while staying safe at all times.

What does the new proposal hold?

The new proposals state operators in the European economic area are free to launch online casinos in Hungary with the permission of the state’s gaming regulator. The proposal further states that there will be no limit on issued permit numbers. And any operator who had no permit and was offering the services illegally for ten years will not be able to get an operating license in Hungary.

It’s good news to gamers because it states they can use credit cards when online depositing as long as they linked it to an allowed services provider. Becoming an operator doesn’t come easily; if one is interested, they must have a minimum HUF1bn, that is €2.8m/ £2.4m. They will be given a license after they have paid HUF600m, which is £1.4m/  €1.7m, which will be paid to the state treasury.

Every provider will provide HUF250m as a minimum guarantee. The tax rate for bookmakers and online casino operators is not determined yet. They are changing the legislation to ensure better player protection standards. When players know there are more competitive gambling or betting platforms, it could lead them to excessive gambling.

The bill states ‌ all operators draw a gamer protection plan according to responsible gaming and player protection. By this, the draft is meant to maximize responsible gambling. Since the private companies have few restrictions with the top competition in the market, it could lead to excessive gambling.

The draft aims to restrict remote gambling by ensuring players’ protection rules have been adhered to; that’s why it introduces regulatory measures that guarantee players’ protection. The bill standstill period runs to the 4th of May, where they are waiting for feedback from the European Commission.

What leads to the legislation drafting?

The court in the European Union ruled back in 2017 that the online gaming industry in Hungary rules unlawfully excluded other European operators from obtaining the license. A case court followed this by kindred groups’ Unibet company after they alleged that operators from outside Hungary could not meet Hungary’s online licensing conditions.

Hungary has been in the headlines for no good reason for online gambling news. In September 2021, Viktor Orbán extended the betting licenses to 2056, although they were supposed to expire in 2024. Orban said economic interests were why he extended the licenses for such a long time.

 What will make operators miss out on the golden opportunity?

  • The draft states the unlimited number of operators from outside, like the UK and European economic area. It sounds good except where it says the permitted operators must have proven not running unlicensed gambling in any European country in ten years.
  • The legislation doesn’t include a proposed tax, but they drew the license term at a minimum of seven years, and to get that license, the operator is paying a hefty sum. And have to prove they have organized for five years legal sports betting.
  • The draft will implement strict players’ protection, preventing and minimizing gambling practices
  • The operators will have to submit the annual player protection to the gambling supervisory, which will be submitted each year.
  • The legislation doesn’t have amendments for online casino operators, and only land-based operators can offer online casino games.

Conclusion

After Hungary ended the online gambling monopoly to comply with EU policy, they expect many international and domestic operators to get licenses as long as they comply with the legislation. The EU will be able to access the Hungarian market, making a fair play competition for operators and players. The liberalized online gaming market emphasizes players’ protection because of many private companies competing, emerging the risk of excessive gambling.

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