Hungary

The local parliament has introduced new online gambling legislation. It will allow private operators to enter the Hungarian market. Since 2014 betting has been available only via the state monopoly. Land-based casinos were the only ones who could apply for online licenses, including poker.

New legislation will allow the operators within the European Economic Area to apply for a license. The number of licenses that can be issued is not limited yet. Any operators who have offered igaming in Europe without a license during the ten years before their application will be prohibited from operating in Hungary.

All interested parties must have share capital of at least HUF1bn (£2.4m/€2.8m). License fees will cost HUF600m (£1.4m/€1.7m). Operators are also obliged to provide a minimum guarantee of HUF250m (over €705 000/over £595 000), while the tax rate for operators is yet to be determined.

The bill is subject to a standstill period following its notification to the European Commission, which runs until 4 May.

Ivan Kurochkin comments

Another country (now Hungary) is planning to expand its list of gambling verticals allowed in the country by eliminating the state monopoly on online sports betting (previously, online casinos licenses were only available for private companies, predominantly to those with a land based footprint in the country).

Interestingly, for some reason, this move reveals that the Hungarian state previously saw a bigger threat to the population in sports betting rather than in online casinos (it is interesting that in the Russian Federation this is reversed, judging by the verticals allowed in the state).

At the same time, apparently, the Hungarian government decided to at least make fairly high financial barriers to entry into the betting market (but still cheaper than in Ukraine), as well as establish a so-called bad actor clause, which involves a ban on obtaining a license for those who previously operated in the country without it. Meanwhile, the establishment of such a provision on the prohibition of obtaining a license for those who previously operated without a license is always a bold step from the government, since this is a deliberate restriction on the list of licensees and, as a result, state revenues.

The truth remains unclear about the details of such a bad actor clause, namely how to avoid it (if such a thing is even possible). Similar provisions can be found in countries such as the Netherlands (we never miss a chance to tip our hat to the Dutch regulator), Romania, and also in at least one of the US states, specifically New Jersey.

 

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