The summer of 2013 may reserve good opportunities for the gambling sector in Hungary as two, somewhat unexpected, changes were introduced last month. The Hungarian Parliament finally adopted the brand new remote gambling regulation following the long period of inaction on this matter in recent years and the government indicated it will issue ten new casino concessions in the near future.
The new law, entering into force in July 2013, widens the scope of games legally available via the Internet, as remote gambling shall include not only online horserace betting and online card games (as the previous version of the law stipulated), but also sports betting and online casino games. As remote gambling qualifies as a non-liberalized gambling activity under Hungarian law, it means that it shall only be performed by the state gambling organizer company (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 period of maximum five years, with the minimum concession fee applicable for the year 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, but 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 competent 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.
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, but ultimately 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 been decreased from 24,000 to a few hundred.
Nevertheless, based on the news published last week, the Hungarian government is planning to launch 10 closed bids for opening casinos in 10 cities outside of Budapest. They argue that due to the ban of slot machines outside of casinos, the revenues of the existing casinos skyrocketed; and many former players have turned to illegal gambling (illegal slots + online gambling) 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.