Hungary makes moves towards liberalising remote gambling sector 

Hungary

On 3 February 2022, the Hungarian government notified the European Commission of its intention to end the current monopoly of the public gaming operator (the fully state-owned Szerencsejáték Zrt.) to organise remote gambling and liberalise the remote gambling sector.

Based on the Draft Laws communicated to the Commission (TRIS notifications no. 2022/66/HU and 2022/67/HU) and laid before the Hungarian Parliament, economic operators established in the European Economic Area (EEA) will be able to organise remote gambling on the basis of a licence issued by the Hungarian regulator, the Supervisory Authority of Regulatory Affairs (SARA). The Draft Laws do not limit the number of licences that can be issued, but excludes operators that organised gambling without a licence in any EEA state within five years prior to the submission of the application for a Hungarian licence.

According to the new regime, the maximum duration of the remote gambling licence is seven years, and an applicant for remote gambling must have at least five years experience as a gambling operator, a share capital of HUF 1 billion (approximately EUR 2.5 million), and a minimum of HUF 250 million (approximately EUR 625,000) payable to SARA for security. An applicant must also pay a remote gambling organising fee of HUF 600 million (approximately EUR 1.5 million) for the duration of the licence.

An EEA-based applicant may organise remote gambling in Hungary only through a branch based and registered in Hungary. In this way, a remote gambling operator in the EEA will be able to operate legally in Hungary via a Hungarian branch office. The Draft Laws place further requirements on the representative of such a branch office. A remote gambling operator must prepare an annual player protection action plan informing SARA on its implementation in writing and thereafter via personal consultation with SARA. During consultation meetings, the remote gambling organiser’s beneficial owner and managing director must be present.

According to the Draft Laws, a remote gambling operator can only accept bet payments:

  • by transfer from the player's payment account held with a bank or another payment service provider authorised by the Hungarian National Bank;

  • by online payment with a credit card linked to such account; or

  • at its physical point of sale or betting office (if applicable).

The Draft Laws also set down obligations for payment service providers including allowing SARA to order indefinite financial restrictions on payment accounts that are related to illegal gambling activities, preventing such accounts to send or receive money. These financial restrictions will be binding and must be enforced by Hungarian payment service providers. The payment service providers must also monitor the registry of restricted payment accounts on the SARA website and enforce decisions without further notice.

Although the Draft Laws aim to ensure compliance with CJEU judgments in the Unibet and Sporting Odds cases concerning Hungarian online gambling regulation, this proposed legislation will not change Hungary's online casino games regime whereby only the holder of a concession license for a traditional Hungarian casino is entitled to operate online casinos. The regime remains unchanged even though the CJEU concluded that Hungarian gambling law contradicts EU law because it restricts the freedom to provide services within the Union.

The Draft Laws are expected to enter into force on 1 January 2023.

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