From 1 January 2023 Hungary introduced an open sports betting licensing regime. This article summarizes the main licensing and financial conditions.
The Hungarian online sports betting regime has been subject to a major revision in 2022: after TRIS notifications no. 2022/66/HU and 2022/67/HU, the Hungarian Parliament has adopted amendments to the Gambling Act in July 2022, which was followed by significant amendments to the Act’s Implementation Decree by the Supervisory Authority for Regulatory Affairs (SARA) in December 2022. With the exception of the rules on payment account blocking that will be applicable from 1 July, the revised online sports betting framework has entered into force on 1 January 2023. In the following we outline the most important licensing conditions of the new system.
Among personal conditions, the Gambling Act provides that applicants (or their affiliates) must have at least 5 years of experience in online gambling operations. Such experience must have been gained in remote gambling or online casino games in an EEA State and the relevant authorisation should have been issued by the competent authority of the same EEA State.
The new system also include 5-year ‘bad actor clauses’, according to which no license may be issued if
- the applicant company,
- another company represented by the managing director of the applicant company, or
- another company owned by the direct or indirect owner of the applicant company,
has organised gambling without a licence within 5 years prior to the submission of the application and this has been established by an administrative authority of an EEA State or by a final decision of a court of an EEA State. The above rule also serves as a reason for license revocation.
In terms of financial requirements,
- applicants shall pay an administrative service fee of HUF 10 million (~EUR 25,000) when submitting their applications;
- operators must have an initial (share) capital of at least HUF 1 billion (~EUR 2,470,000);
- the minimum amount of their guarantee shall be HUF 250,000,000 (~EUR 620,000);
- operators shall also pay a remote gambling organising fee of HUF 600,000,000 (~EUR 1,510,000) for the entire duration of the licence;
- operators must pay a supervision fee, which is 2,5 % of the quarterly net gambling revenue, but a maximum of HUF 10 million (~EUR 25,000), and a monthly game tax that amounts to 15 % of the net gambling revenue. (Please note that other taxes may also apply.)
In addition, applicants have to demonstrate that with the rights holders regarding the rights involved in the games they want to organize concluded licence agreements (e.g. agreements concluded with sports associations regarding the right to offer bets on events organised by such associations).
Last but not least, to facilitate the principle of responsible gambling and player protection, organisers will have to prepare annual player protection action plans and inform the SARA about the implementation of these, even by means of annual personal consultations which shall be attended by their beneficial owner and manager.
In terms of procedure, EEA-state applicants may submit their application for a licence only through their representative and the SARA shall take a decision on the registration of representatives within 75 days. After the successful registration, applicants may use the form available on the SARA’s website and SARA shall take a decision on the license application within 120 days. In case they were granted a license, operators may only organise gambling through their Hungarian branches, which shall be established within 90 days of the issue of their license. The maximum period of licenses is 7 years and operators may operate one gambling website.
For sake of completeness, we note that the Hungarian gambling framework might change rapidly, which make the continuous monitoring of the legal environment essential for legal professionals and market players.