The Malta Independent 5 December 2023, Tuesday
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The Impact of Online Casinos on Hungary's Gaming Landscape

Monday, 20 November 2023, 13:52 Last update: about 15 days ago

Hungary, the country of Central Europe, legalized all types of gambling entertainment. The country's legislation clearly regulates the rules of work in the gambling industry, both in land-based establishments and in the online segment. The largest supplier 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 the time, and invested in the other. Since 2012, significant changes have been made to the legislation on gambling regulation. They allowed for greater opportunities for other companies to develop offline and online markets.

Upon their initial launch, online casinos were already hugely successful, and their popularity has only grown. Hungary as well as elsewhere is witnessing an ongoing flow of new online casinos. The increasing number of people preferring to gamble at online casino is not surprising, given their many benefits, such as welcome bonuses, free spins, and many more.

Gambling Legislation in Hungary

The process of legalizing gambling in Hungary began back in 1991. At that time, modern laws regulating the gambling market were passed:

  • Act No. 34, "On Gambling," is the main act based on which the gambling business is regulated both in land-based establishments and online resources.

  • Law No. 16 "On Concession", secured the exclusive right to provide gambling services for the state.

The first provider in the country was the aforementioned state-owned company, Szerencsejáték. Having obtained the monopoly right to provide gambling services, it was initially responsible for managing lotteries. The sports betting market was controlled by its subsidiary, TippMix.

The situation began to change in 2006 when the owners of appealed for support from the European Commission. The very next year, Hungary received a warning about the need to open the market. Thus, the state authorities were forced to think about making changes to the legislation.

Subsequent changes to the law were made in between 2010-2015:

  1. A 30% tax on poker winnings received in land-based casinos was introduced.

  2. The market opens for foreign online providers;

  3. Licensing conditions for foreign operators are defined, allowing them to operate in Hungary;

  4. The government grants licensing rights to 11 land-based casinos;

  5. Detailed rules for responsible gaming are published.

However, the conditions for organizing casino activities in the state are quite strict.

Online Gambling in Hungary

The activity of online casinos in Hungary is also legal. The first games for Internet resources were released in 1998 by Szerencsejáték. Since 2002, citizens of the country have been able to bet on sports via SMS. The final changes, valid as of 2017, were introduced in July 2013. It was then that the state granted the right to organize online casinos to foreign operators.

The activity of gambling resources is regulated by the law "On Gambling" from 1991 and the amendments made later. The monopoly right to open online casinos belongs to the state. To create a resource, it is necessary to obtain the appropriate concession. The company that opens the portal must have a legal address in Hungary. The term of validity of the license for organizing the activities of online resources is 5 years.

However, according to well-known operators, opening an online casino in Hungary is associated with high costs. As a consequence, foreign providers did not seek to formalize licenses. Today, licensed online portals created by well-known operators are practically absent in the country.

Online Casinos in Hungary

The first licensed online casino in Hungary, Vegas Portal, only opened in February 2017. The owner of the site became the company LVC Diamond. The collection of slot machines includes models from well-known developers: Microgaming, iSoftBet, and Play'n Go. Thanks to this, Hungarian players have access to popular slot games such as Sizzling Hot, Book of Ra, Lucky Lady´s Charm, and others. In addition, users can play roulette, video poker, blackjack, and table games with live dealers.

Gaming landscape and gambling business development in Hungary

It is quite difficult to predict how successful the gambling business in the country will be. Experts' opinions differ on this matter. On the one hand, many citizens of Hungary have a negative attitude toward the development of gambling. The corresponding policy of forming public opinion is carried out by the mass media. Thematic programs often touch upon the issue of the negative impact of gambling on the psychological health of the nation. In addition, market participants note rather strict licensing conditions and high levels of expenses for the organization of activities. However, there are also positive factors. Well-known operators are persistently trying to change the situation.

In addition, the Hungarian authorities have once again received recommendations from the European Union to amend the existing legislation. As a result of Unibet's complaint about "discrimination and non-transparent laws", the EU advised new amendments to the Gambling Act of 1991.

Finally, one of the most expected events is the creation of "Hungarian Las Vegas," the largest gambling center being built by an Austrian tycoon on the border of Hungary and Slovakia. According to the preliminary estimate of the Ministry of Finance, the state will be able to receive about 2.5 million USD immediately after the opening of the project. And this amount is an argument in favor of the development of gambling in the country.

In January 2023, Hungary further amended the Gambling Act with many technical changes to facilitate the new gaming market. Previously, the law limited a player to having only one account with an operator. Under the new rules, a consumer can have multiple accounts linked to each game. Previously, the law limited a player to only one game account with an operator. Under the new rules, a consumer can have multiple accounts linked to each game.

Among other changes, the legislation also allowed players to withdraw money in advance if the game allowed it. According to the text, withdrawals are subject to the same rules and restrictions as the payment of winnings.

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