Introduction

The gambling sector in Hungary may look back on this summer as one that opened up new opportunities after two somewhat unexpected changes were introduced last month. The Hungarian Parliament finally adopted the brand new remote gambling regulation following a long period of inaction on this matter in recent years, and the government indicated it will issue 10 new casino concessions in the near future.

Remote gambling

The new law that takes effect in July 2013 widens the scope of games legally available via the Internet. Remote gambling now includes sports betting and online casino games, not just the online horserace betting and online card games that the previous version of the law stipulated. As remote gambling qualifies as a non-liberalized gambling activity under Hungarian law, it can only be performed by the state gambling organizer (which launched its brand new website in May 2013) or by a concession company that contracts with the Hungarian State.

The concession is valid for a maximum of five years, with the minimum concession fee applicable for 2013 set at approximately $450,000 per game type. Licensed operators will be subject to a 20 percent tax on gross gaming revenues (GGR) payable every two weeks, as well as quarterly supervisory fees calculated at 2.5 percent of GGR, totaling at least approximately $450 and no more than approximately $225,000.

The Hungarian government intends to emphasize the importance of blocking unlicensed remote gambling operators in Hungary; therefore a group of new provisions provides the possibility for authorities to order the data relating to illegal gambling operations published via an electronic telecommunications network to be temporarily inaccessible for a period of 90 days. All telecommunications service providers shall be bound by the decision of the authorities.

New casinos

The beginning of 2012 looked encouraging for slot machine operators as the government intended to implement a brand new regulation based on a server based system. Ultimately, it took a 180 degree turn and ordered a complete ban on slot machines outside of the three existing casinos. Due to this radical change, the number of licensed slot machines in operation has decreased from 24,000 to a few hundred.

Nevertheless, based on the intended changes in July 2013, the Hungarian government is planning to launch closed bids for opening casinos in 10 cities outside of Budapest. They argue that due to the ban on slot machines outside of casinos, the revenues of the existing casinos skyrocketed. Many former players have turned to illegal gambling like online gambling and illegal slots from which the state gets no revenue. The government would like these 10 new casinos to generate taxes and requested closed bids arguably for state security reasons