The government of Hungary has been warned that legal challenges persist on the terms of the Gambling Act (1991), despite recent amendments to liberalise remote gambling services.
The notice came from a report submitted to the Economic Chamber by Biró Marcell, the Chairman of the Supervisory Authority for Regulated Activities (SZTFH).
SZTFH is the Hungarian supervisory body for regulatory and economic affairs related to gambling, tobacco, mining and cyber defence.
Industries supervised by SZTFH are reported to generate an annual turnover of “more than HUF 2,000 billion, while offering jobs to around 50,000 people, thus indirectly ensuring the livelihood of nearly 100-150,000 people”.
Gambling Act amendments sanctioned in 2022 saw Hungary end its monopoly on remote gambling services on 1 January 2023, allowing SZTFH to launch a new licensing system.
SZTFH endorsed amendments as bringing in a new licensing system that will tax online gambling businesses whilst incorporating much-needed ‘protection guarantees’ for national consumers engaging in online gambling activities.
Prior to adopting amendments in 2022, SZTFH’s report detailed that “since 2015 multinational gambling groups had initiated over 160 cases against the Hungarian state” challenging terms favouring monopoly operators.
In 2017, the European Court of Justice (ECJ) sided with appeals submitted by European online gambling firms, which determined that Hungary had sanctioned unfair restrictions on foreign businesses in favour of its national monopolies. The ECJ intervention demanded that Hungary update its online gambling laws to align with EU standards on fair business competition practices.
At the start of the year, Hungary’s Parliament approved for the state-monopoly system to be replaced by a ‘competitive licensing process’, to allow for new operators to compete in the market.
Yet despite undertaking regulatory changes, SZTFH’s report cited that a further 32 legal challenges have been initiated against the reforms of the Gambling Act.
New proceedings have challenged SZTFH enforcement measures monitoring remote online gambling activities such as enforcing IP blocks, obstructing payments and pursuing direct criminal charges.
Further challenges questioned why SZTFH has been allowed to disqualify businesses from the new licensing system, due to prior involvement in Hungarian online gambling, during the period that the Gambling Act was under dispute.
Licensing provisions granted to SZTFH stated that it can disqualify any business that has been involved in providing unlicensed gambling services to Hungarian consumers within a ‘five year period of its application date’.
As of September, SZTFH had not received any foreign applications to join Hungary’s new regime, only state-owned Szerencsejáték Zrt (SZRT) and three land-based casinos for online casino services.
Defending SZTFH’s regulatory actions on gambling, Biró Marcell reported to the Economic Chamber: “We have three tools in the fight against illegal online gambling: making illegal game organisation sites inaccessible, blocking payment flows, and filing criminal charges.
“With their legal actions, these multinationals have clearly expressed that they do not wish to become part of the legal Hungarian market.”
This week, Szerencsejáték Hungary’s national lottery operator, launched its new ‘TippmixPro’ sportsbook brand, powered by the OddsMatrix sportsbook platform of EveryMatrix.