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The government of Hungary established the Gambling Supervisory Authority, a.k.a. the GSA, with the express purpose of overseeing all gambling-related activities in Hungary.
By decree #183/2017, on 5 July 2017, the government of Hungary set up the Gambling Supervisory Authority. Prior to this, the Hungarian Tax & Customs Administration was the sole authority over gambling-related activity in the country. Otherwise known as the Administration, the Hungarian Tax & Customs Administration is now separate from the Gambling Supervisory Authority. The Minister for National Development is responsible for the GSA, and is tasked with all responsibilities in this regard. The separate administrative body was created, owing to the increased need for manpower to monitor the gambling industry in Hungary.
In 2016, some 160 authorizations were issued by the Administration, with some hundreds of decisions rendered, HUF 1.7 billion in fines issued, and 13,000 inspections undertaken. Front and centre for the Administration was the online gambling industry. Remote gambling services without the appropriate licensing and regulation were the single-biggest bugbear for the Administration. With scores of judicial reviews still pending from the Hungarian Tax & Customs Administration, many decisions remain in pending status.
European Court of Justice (ECJ) Seeks Greater Transparency of Gambling Laws
Supervision of online gambling activity in Hungary has also fallen under the purview of the ECJ (European Court of Justice). An important judicial review from June 22, 2017 found that the administration vis-a-vis online gambling was in direct violation of Article 56 of the TFEU. The European Court of Justice declaration sought greater transparency with respect to online gambling services and stated that any online gambling entity is eligible for licensing and regulation.
The newly-formed gambling authority will supersede the Administration in all matters relating to online gambling activity. Hungarian and European courts will now make decisions regarding the European Court of Justice (ECJ) statements. Further, the Gambling Supervisory Authority is tasked with the protection of minors with decree #294/2017 issued on October 10, by providing gambling operators with a strict regulatory framework regarding self-restraint, self-exclusion, and responsible gaming practices. Other ministerial decrees (#30/2017 and #34/2017) are geared towards joint player accounts and AML (anti-money laundering) measures respectively.
History of Gambling Regulations in Hungary
While all forms of gambling activity are regulated and restricted, gambling is legal in Hungary. Back in 1991, the Gambling Act was passed, giving the government control over all gambling in the country. The biggest gambling operator in the country is a state-owned company known as Szerencsejáték Zrt. It currently owns 2 casinos, with substantial investments in an additional casino. This provider owns controlling rights over lotteries and the majority of drawing games in the country. In 2010, the Hungarian authorities eliminated many live poker games restrictions. In 2012, all slot machines not licensed in casinos were outlawed. Sports betting was legalized in 2013, with 11 casino licences issued, dividing casinos up into 2 unique categories.
Szerencsejáték Zrt created online gaming product in 1998, and by 2002 SMS betting was permitted. Legal-age Hungarian players can purchase lottery tickets, play instant win games, and place sports bets online. As it stands, licensing fees in Hungary are prohibitive, preventing many online casino operators from entering the market. At this stage, Hungarian citizens can play at foreign-based online casinos, most without the Hungarian language option. Restrictive measures such as geolocation-based technology, and ISP blocking, limits the number of offshore casinos that residents can access.
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