Biró Marcell, Chairman of the Supervisory Authority for Regulated Activities of Hungary (SZTFH), has submitted a report to the Chamber of Commerce and Industry, tackling the recent measures implemented against unlicensed gambling operators.
The SZTFH is the Hungarian regulatory authority responsible for the monitoring of gambling, tobacco, cyber security, and mining sectors. The said industries produce a combined turnover of over HUF 2,000 billion per year and provide employment to more than 50,000 people.
As of 2022, the country chose to put an end to the existing monopoly regime and liberalize its gambling market, enabling offshore providers to apply for a license to legally operate in the country. At the very start of the current year, Hungary officially opened up its online marketplace, thus abandoning the previous model, where the state-owned Szerencsejáték Zrt was the sole provider of gambling services.
The introduction of a competitive licensing system necessitated amendments to the Hungarian Gambling Act (1991), concerning the requirements for obtaining a license, the applicable taxes, safer gambling practices, and the protection of players.
The report further detailed that before these amendments took place, Hungary had to face over 160 appeals filed by international gambling companies. What they challenged was the stance of the Hungarian state in support of its former gambling monopoly. Consequently, in 2017, the European Court of Justice urged Hungary to adjust its gambling legislation to meet the established EU standards for fair business competition.
Although the regulatory amendments took effect on January 1, 2023, the report revealed that an additional 32 appeals have been filed. They challenged the new regulations enforced by the Hungarian monitoring authority. Among other measures, they included a requirement for a capital reserve minimum of HUF1 billion (€2.8 million), as well as a license fee amounting to HUF600 million (€1.6 million).
Additionally, applicants who have provided illegal gambling services to Hungarian citizens over the last five years would be automatically disqualified from the application process.
Biró Marcell Reports Three Specific Mechanisms Used against Unlicensed Online Gambling
In light of the above-mentioned measures concerning the liberalization of the gambling marketplace in Hungary, Biró Marcell has firmly advocated all actions taken by the SZTFH to ensure the smooth regulation of the sector. The transition from a monopoly model to a competitive gambling market required setting strict standards that must be observed.
SZTFH’s Chairman explained that the authority utilized three separate mechanisms to thwart illegal gambling operations. They included blocking access to unlicensed operators, preventing payment flows associated with illegal gambling, and filing criminal charges.
The Chairman of the regulatory agency further added that in view of the legal proceedings undertaken by the international operators they “have clearly expressed that they do not wish to become part of the legal Hungarian market”. As of September 2023, SZTFH had not processed new applications from foreign operators.