Gambling in Hungary
Hungary is a Central European state that has legalised all types of gambling entertainment. Gambling laws in Hungry strictly regulate the rules of operations in the gambling industry in both land-based and online establishments. The largest provider of gambling services in Hungary is the company called Szerencsejáték. This state-owned company had the monopoly on the country's gaming industry up until 2012. The provider had an exclusive right to all lottery games, owned one of the two casinos that existed at the time and was invested in the other one. Since 2012 substantial amendments were introduced to the legislation on regulating the gambling industry. The amendments allowed for expanding the opportunities for conquering offline and online markets by other companies.
Casinos in Hungry
9 land-based casinos are operating in the Hungarian territory today: Sopron Casino in Sopron, Win Gyor Casino in Gyor, Grand Casino in Debrecen, Onyx in Nyíregyháza and las Vegas Casino Atlantis, Las Vegas Casino Atrium EuroCenter, Las Vegas Casino Corvin, Las Vegas Casino Sofitel and Tropicana Casino in Budapest. The very first licensed online casino in Hungary was Vegas.hu which was opened in February 2017. The owner is a company called LVC Diamond. The collection of slots contains models by prominent developers such as: Microgaming, iSoftBet and Play’n GO. With the direction the law seems to be taking in Hungry it is hoped by many that this will lead to further openings in the market. Online casinos in Hungary are also legal. The very first games for Internet resources were released in 1998 by Szerencsejáték. Since 2002, citizens have had the opportunity to bet on sporting events by using text messaging. The final amendments that are still valid in 2017 were introduced in July 2013. This is when the state allowed foreign operators to set up online casinos. Operations of gaming resources are regulated by the 1991 Gambling Law and the subsequent amendments. The monopoly on setting up online casinos belongs to the state. An appropriate concession must be granted to set up a resource. A company that opens a portal must have a legal address in Hungary. The license for operating Internet resources is valid for 5 years. Well-known operators claim that opening an online casino in Hungary is associated with high costs. As a result, foreign providers have not been too keen on obtaining licenses. Today there are virtually no licensed internet portals created by well-known operators in the country.
Gambling Games in Hungary
In April the casino signed a cooperation agreement with Novomatic. This is when Hungarian players gained access to the developer's most played slots such as Sizzling Hot, Book of Ra, Lucky Lady´s Charm and others. The players can also play roulette games, video poker, blackjack and table games with live dealers. The website features a decent selection of payment systems. Transactions can be done by using credit cards and prepaid debit cards, bank transfers and most used European electronic payment systems such as: Skrill and Neteller. It should also be noted that the small number of online casinos is not a problem for Hungarian players. Even though the country's authorities have been trying to block illegal websites, penalties against gamblers that play on foreign online portals are never imposed. As a result, Hungarian citizens often become clients of famous European casinos that feature decent bonuses, various payment methods and have a wide selection of games. The only shortcoming is the lack of webs in the Hungarian language.
The process of legalising gambling in Hungary started back in 1991. This is when modern-day laws were passed that regulate the gambling market: Gambling Law, Act No.34 - the main act that regulates the gambling industry in both land-based establishments and online resources and Concession Law, Act No.16 secures the state's exclusive right to provide gambling services. The very first provider in the country was Szerencsejáték company, mentioned above. The company was given the monopoly on providing gambling services, initially the company was responsible for running the lotteries. The company's subsidiary TippMix was running the bookmaking market of sports betting. In 2005 Hungarian Minister of Finance signed Decree No.32, which set the licensing procedures for the gambling industry and oversaw compliance with it. The country still maintained a monopoly policy. Other companies - representatives of the gambling industry from other countries - had no opportunity to set foot in the Hungarian market. The situation began to change in 2006, when owners of Sportingbet.com appealed to the European Commission for support. The following year Hungary received a warning about the need to open the market. This is how the nation's government was forced to think about making changes in the legislation. Subsequent changes in the law were made in:
- 2010 30% tax was imposed on winnings in poker played in land-based casinos
- 2011 The market for foreign online providers opens up
- 2012 Prerequisites for licensing of foreign operators are outlined, which allow operations on the Hungarian soil
- 2013 The government authorises 11 land-based casinos to be licensed
- 2015 Detailed rules of responsible gaming are published
And yet the conditions for running casino operations in the country are quite rigid. Consequently, foreign providers are not too keen on entering this market.
Gambling Supervisory Department, which is part of Hungaryʼs National Tax and Customs Office (NAV), was put in charge of regulating the gambling industry. The Department's functions are:
- Licensing of gaming companies
- Monitoring the operations and compliance with the provisions of the acting legislation
- Maintaining registers and accounting audit
- Detection of violations in the operations of the providers
- Conducting appropriate investigations
- Imposing fines and sanctions
- Prevention of operations by unlicensed companies
The Department works in cooperation with the Hungarian Public Relations Association and the Hungarian Authority for Consumer Protection (HACP). The Ministry of National Economy deals with the issues of lawmaking in the gambling industry.
All types of gambling entertainment in Hungary are subject to licensing: card games (poker), bookmaking (sports betting or betting on other events), operations of both land-based and online casinos, slot machines andVarious types of lotteries including bingo, keno and joker. Running land-based casinos and poker clubs in Hungary, however, still remains a monopoly of the state. In other words, these operations may be run by either state-owned companies that were specially set up for this purpose or companies that were granted a concession. Private companies may also qualify for the right to operate arcade halls. Entrepreneurs who would like to open a gaming club must:
- Register a company with an authorised capital of at least 180,000 EUR. The company will only be allowed to conduct one type of operation
- Receive a departmental certificate
- Choose the premises that meet the requirements and hire personnel
- Acquire and install slot machines that are less than 5 years old
- Obtain licenses for the slot machines and the gambling hall
The departmental certificate will remain valid for 1 year and costs about 18 EUR. The document will be issued within 30 days from the day the application was filed. The licenses are also subdivided into several categories: for slot machines of the 1st group — the machines that are capable of bringing at least 80% of bets for each 100,000 games, but with a maximum prize of no more than 200 times your bet per game and for machines of the 2nd group — video slots that accept no more than 200 credits per bet and pay rewards that are not bigger than 25 times the bet per game. Each machine in Hungary has to be certified. To get certified, the slots have to meet a number of requirements: be less than five years old and Hhave production numbers and built-in controls. Premises for the hall have to be at least 90 square meters: 75 square meters for slot machines and 15 square meters for the bar. Suitability of the premises will be confirmed by a professional assessment conducted by the Mayor's Office. The minimum cost of the assessment is 16 EUR. The tax rate is formed from several components: tax on slot machines, tax on the hall and10% to 30% of net profit. The amount of the latter may vary depending on how profitable the establishment is.
Development of the Gambling Market in Hungary
It is quite difficult to predict how successful the gambling industry will develop in the country. Experts have different opinions in this regard. On the one hand, many Hungarian citizens have a negative attitude towards the development of the gambling industry. The appropriate policies on forming the public opinion are being implemented in the mass media. The themed TV shows would often touch on the issue of a negative impact that gambling has on the nation's mental health.
Besides, the players in the market have been encountering quite rigid conditioning for licensing and a high level of expenditures on setting up the operations. And yet there are some positive aspects out there. Well-known operators have been persistent in trying to change the situation for the better. Vegas.hu casino mentioned above can serve as an example. Not only did the owner manage to open an online portal, but prominent partners got involved in the cooperation as well. Given the fact that the newly-opened website is one of the few that feature an interface in the Hungarian language, one can predict that demand will be quite high. The Hungarian Government has received the appropriate recommendations on the introduction of amendments to the current legislation from the European Union. After the complaint was filed by Unibet about the discrimination and non-transparent nature of the laws, the EU advised them to introduce new amendments to the 1991 Gambling Law. This was the time when the Hungarian government heeded such recommendations. The operators are hoping that the outcome of the unfolding events will be favourable this time as well.
And finally, one of the most anticipated events is the creation of Hungarian Las Vegas, which will be the largest gaming centre built by an Austrian magnate at the Hungarian-Slovakian border. According to the preliminary assessments by the Ministry of Finance, the state can immediately earn an estimated 2.5 million USD once the project is launched. And this is the amount that would support the arguments in favour of the development of the gambling industry in the country. Hungary is a country where gambling is legalised, yet the conditions for running gambling operations are quite rigid. Given the changes that have occurred in the market over the past few months, one can predict that further development of the industry will be more favourable and dynamic.