Hungary

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Initially, the article will reveal how the gambling industry has grown in Hungary. It will then go into depth on online sports betting. Lastly, taxation is discussed and Hungarian player-friendly sites are mentioned. In conclusion, we give our opinions on what lies ahead for sports betting.

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Flag of Hungary

High Fees and Taxes Limiting Options for Outside Companies

The central European state of Hungary, which up to the end of the First World War was one of the centres of the Austro-Hungarian Empire. It became a Soviet satellite state after being devastated by World War II in 1945 until 1989 when it finally gained independence.

In the latter years of the cold war, it enjoyed more economic freedoms than other eastern bloc countries. At the end of 1980s, communism collapsed and Hungary became a democratic republic and joined the EU in 2004.

Until the 1991 Gambling Act, Hungary had been practising underground gambling, which became the only place one could gamble after communism collapsed [1]. This law permitted any form of gambling including sports betting, but it required every operator to be controlled by a public entity.

The bookmaker company, Szerencsejáték Zrt, was the right choice for running the sports betting business in Hungary since pari-mutuel betting took up most of the sports gambling there.

The government of Hungary finally ended this monopoly in 2013 after the EU forced it to implement new rules on gambling by changing its laws [2]. The main target of these legislative amendments was the increasing popularity of internet gambling although it allowed licensing other companies to provide Hungarian customers with opportunities for betting.

To date, no other operator has come forward to compete with ‘SzZt’ due to the high entrance fees and taxes imposed by the government.

Monopolising the Hungarian Market

In 1998, SzZt launched an online site which is still the only legal one in the country. In 2004, Hungary joined EU and a UK operator Sportingbet tried to launch a Hungarian language website. Sportingbet did not change their opinion that its activities were allowed under EU legislation; however, Hungary gambling watchdog sued them and fined Hungarian media buyer of Sportingbet Provimar Kft for 500 thousand forints.

Just like the growing internet gambling industry, it also became harder to stop online sports betting sites. In 2006, Hungary made another attempt and aimed at Sportingbet as well as other gambling sites, online casinos, and poker websites. There was also pressure on domestic banks and credit card providers to block payments towards international gaming establishments.

The Hungarian monopoly online market has been widely condemned by the EU. As a result, new legislation was implemented in 2013 that opened up the market to foreign companies.

However, it is unfortunate that the system passed was not so transparent as it had seemed earlier with each service costing about $440 thousand [3] and needing to be renewed after five years that the state operators would bypass since they were grandfathered into the market.

No foreign firm has yet sought for one of these licenses even though numerous continue to cater for the Hungarian market. Despite there having been efforts to ISP block major operators, no laws have been enacted that make it illegal to bet on such websites.

Sportingbet, Bet-at-home and Betclic first appeared on the blacklist of July 2013 [1]. In addition to these there were Bwin.party and Ladbrokes in 2014 [2]. In fact, despite such limitations, many other international operators keep offering Hungarian users their portfolio of services for betting activities plus several ingenious ways people have devised to go around the restrictions []

Wooden gavel on flag of Hungary

Taxation for Hungarian Sports Bettors

Currently, in Hungary, gamblers are not required to pay income tax on the winnings they make within the country or abroad.

You Can Access Online Bookmakers But Euros Are the Best Option

Apart from the local betting sites that only serve Hungarians, there are several international sites that have made it easy for you to use them by making themselves available in Hungarian. But unfortunately, very few of them will allow you to keep your balance and wager in forints but instead best options are Euros. However, you can still deposit and the site will convert the currency.

There are a lot of restrictions that different Hungarian banks impose on processing gambling transactions to international sites, but you can still see some cases whereby MasterCard and Visa credit card transactions may still go through.

Another option is to use a prepaid card or an electronic voucher, but it is better to consult with the support team of your favorite website so as to consider what options are available.

The simplest way for the majority of people is to use an E-wallet such as NETeller or Skrill. Once you have deposited money into these wallets, you can transfer and withdraw from most websites without limitations; moreover, if you are a frequent mover of money or a very fluid person in terms of your financial transactions, holding your purse in euros could help you get rid of constant conversion rates.

Hungarian forint banknotes

Sports Betting in Hungary to Remain Largely Behind Closed Doors

Despite the introduction of new laws in 2013 to open the markets, it is clear that they were designed to ensure that the state monopoly remains unchallenged and IP blocks on foreign operators will most probably be retained and may even increase further. In effect this implies that any likely future changes are expected to come within one of the blocked operators who will appeal to EU, listen and rule out. In other words, change could be a while off yet.

Many countries across Europe have attempted to imitate these foreign site blocks but the black or gray market has risen considerably as a result. This is currently true for Hungary, although whether the government will notice that by charging less they could recover more taxes and open up legal markets still remains to be seen.

References

[1] Legal Study of Hungarian Gambling Laws – PDF

[2] Gambling Legislation in Hungary Has Changed – Burlywood Capital. The gambling legislation in Hungary has taken on a new look recently.

[3] Hungarian Operator Fees – Calvin Ayre

[4] Hungary Ban Operators – SBC News

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