Hungary PSPs ordered to comply with new SZTFH commands

The Supervisory Authority for Regulated Activities of Hungary (SZTFH) has announced that starting from July 1, it will initiate a campaign of enforcement against unlicensed online gambling businesses.

Updating relevant parties, SZTFH states that from 1 July it will be granted new regulatory powers to monitor illegal transactions. These powers have been granted under Hungary’s new “Act of the Reorganization of Gambling”.

From 1 July, domestic Payment Service Providers (PSPs) “are obliged to prevent the execution of financial transactions to and from unlicensed foreign online gambling sites”.

As such, domestic PSPs can only maintain payment accounts with gambling operators licensed by the SZTFH and included in the official register published on the SZTFH website.

The “Act of the Reorganization of Gambling” has enabled SZTFH to expand its surveillance of illegal gambling, including the ability to block websites, prevent transactions related to unlicensed online gambling, and impose administrative fines on payment service providers that fail to implement financial blocking.

Adopting new powers, SZTFH will maintain a “registry of prohibited payment accounts that have been restricted”. The register is publicly available on its website and must be monitored by payment service providers to implement financial blocking.

2022 saw Hungary begin to reorganize its gambling sector, which had been previously reprimanded by the European Court of Justice (CJEU). In 2017, the CJEU upheld complaints by Kindred Plc and Sporting Odds against the ‘monopoly interests’ of the state-owned operator Szerencsejáték Zrt.

Authorising the “Act of the Reorganization”, the Hungarian government has moved to liberalise its gambling market by choosing to end the monopoly of Szerencsejáték Zrt.

Hungary initiated the first phase of the market’s liberalisation this year, with EveryMatrix winning the tender to become the new sportsbook solution supplier for the Szerencsejáték Zrt flagship brand of TippmixPro.

New reforms adopted by SZTFH oblige operators to have at least five years of experience in licensed online gaming within the European Economic Area (EEA), maintain a capital reserve minimum of HUF1bn (€2.8m), and disqualify any business offering unlicensed gambling services to Hungarian consumers within five years of its application date.

The agency recommends a 15% gross gambling revenue tax for sports betting, with an additional 2.5% supervision fee capped at HUF10m (€29,000) – a cost observers deem high for entry into Hungary’s new gambling market.