Hungary is a land-locked country in south-east Europe. It borders Slovakia to the north, Ukraine to the north-east, Romania to the south-east, Serbia to the south, Croatia to the south-west, Slovenia to the south-east and Austria to the west.
Overview
Only in recent years has the state-run monopoly for online casino games and sports betting been broken up, and like most European countries, it took several battles with the European Commission before this was the case.
Prior to this, licenses were already given for online poker and horse betting, so there wasn't really that much of a change over to regulating a more open environment for online casino games and online sports betting.
After the said improvements, Hungary hasn’t been very friendly to operators in the sense that taxes and fees are pretty high. In fact, no online casino operators had entered the market up through 2013, and they were having a hard time attracting any in 2014 as well.
Considering the fact that these were...
... the first years which promoted licensed online sports betting, casino games, horseracing and greyhound racing betting, as well as other table games, it doesn’t get anyone’s hopes up.
Operators wishing to enter the market at the time needed to set up a server inside the country’s territory, if they were otherwise located outside the EEA. Other than that, license applications required up to HUF200 million, while a fine for catering to Hungarian players illegally cost operators between HUF100 and HUF500 million. By mid and late 2014, the country identified the need to offer changes to their potential interactive operators – they reduced taxes to 15% of the net profit, and set the maximum supervisory quarterly fee at HUF10m. The yearly fee, however, was set at HUF102.4 million per game, paid to the state.
Foreign operators were authorized to legally enter the Hungarian gambling market under one of the key points of the specific changes.
Thus, the blacklist underwent an update...
... and players were ultimately able to enjoy a wider range of interactive gambling activities.
During the past two years, 2017 and 2018, clashes with the EU and the Commission continued to arise. They mainly revolved around the government’s tendency to restrict the industry, as opposed to the EU’s policy towards greater industry and individual freedom of choice and action.
Ultimately, such difficult circumstances with the taxing and licensing policy have been driving operators away rather than into the country. The state-owned sports betting and lottery monopoly of Szerencsejáték Zrt through the Tippmix platform remains a licensed and secure platform for all interested players, although a changing climate seems to be promising even further expansion.
Licensing
The way that licensing works is that...
... the operator pays a set fee and then pays taxes based on their net profits.
This is pretty high in terms of rates for online gambling, and that's why they're having problems attracting operators.
If a site operates in Hungary without a license, then they try to add them to ISP-based blacklists so that players cannot access them, and they also try to exact fines from those companies. This has limited results because of jurisdiction issues. Licenses for companies regulated in Hungary have historically held some weight because they enforce their rules in a major way, but this is overshadowed by the fact that their fee and tax schedules keep out most operators.
Thus, just the most recently introduced interactive gambling segment – casinos, has been subject to a 15% gross win tax, making it harder for operators to stabilize in the new marketplace.
Player Protections
Players are protected in a number of ways with the way that regulation is done in Hungary. Complaints are taken seriously and escalated to a level where they can be taken care of appropriately. Nowadays, they can freely address the dedicated Gaming Board of Hungary, in charge of regulating and enforcing the specific policies, and resolving any demeanours.
Along these lines, players have certain advantages when playing with regulated sites compared to unlicensed ones. The downside is that the high taxes are likely to limit the bonuses and promotions and value that players can get, so it's a bit of a trade-off.
Further Reading
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