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Hungary - online gambling regulations

Published by Niki | August 3, 2020 | Last updated: April 23, 2023

Gambling in Hungary

For people across the globe, online gambling remains one of the most attractive forms of entertainment. Not only are you able to indulge in superb quality games from the comfort of your own home but you also stand a chance of cashing in on some big wins.

Despite the allure of online gambling, many countries have gone out of their way to ban this form of entertainment while others choose to legalize it in an effort to boost the country’s annual income. Hungary is a rather interesting territory with an interesting history when it comes to online gambling.

In this guide, we take you through a quick walk of the laws and legislation, as well as whether or not you’ll be able to play on both local and foreign sites. As an avid online casino player or even someone looking to break into this form of entertainment, it’s always best to know the basics before you start spending your hard-earned cash.

Online gambling regulations in Hungary

History and laws of gambling in Hungary

Where some countries have had a long legal battle with gambling, Hungary is one of the countries where it has been legal to gamble since 1991 with the implementation of the Gambling Act. Land-based gambling was regulated by the National Tax and Customs Administration of Hungary (the NAV) from the start.

Online gambling only became legal in the country in 2013 and was also controlled by the NAV which is controlled by the state-owned and operated company, Szerencsejáték Zrt. For a long period of time, foreign gambling companies and EU officials negotiated with government officials in an attempt to open the Hungarian online gambling market to foreign operators. According to the EU, the Hungarian rules and regulations were too strict and made it nearly impossible for any foreign companies to enter the market. With the Gambling Act being amended in 2013, 11 operators were able to acquire an online casino licence.

In Hungary, the casino licences are divided into 3 classes, and operators have to meet certain requirements before they receive their licence. According to the 2013 amendments, these operators were also limited to a certain number of gambling machines per category.

In the middle of 2017, the EU top court slammed Hungary’s restrictive online gambling laws. According to the verdict, the restrictive laws can prevent the company from taking action against gambling operators that are licensed in other European Union countries.

The very first online casino was opened in the second half of 2017 by LVC Diamond Kft. The company is owned by Andrew G. Vajna who is a famous producer of Hungarian descent. The only thing in this country that remains the same is the state monopoly on all forms of the lottery, online lottery, and lottery-type games, as well as Sports Betting.

At the beginning of 2018, there were major talks about the case against Sporting Odds Ltd, which was offering services to Hungarian citizens without a local licence. The Court of Justice for the European Union (CJEU) ruled in favour of the operator, saying that the refusal of government officials to grant any licences to operators who don’t own a land-based casino was excessive. It also went against EU rules and legislation.

Currently, in Hungary, there are many disputes, especially between government officials and the EU. It seems that the Hungarian government is determined to keep a state monopoly on the gambling market. With the CJEU’s ruling, however, foreign online casino operators are less afraid of offering their services to Hungarian citizens.

Furthermore, as of January 1st, 2023, some additional amendments came into effect. To attain authorisation from SZTFH, all operators must have at least five years of previous experience in offering online gaming services in the European Economic Area. 

The new legislature that is to come will include allowing players to participate using multiple balances with the same operator. They will also be able to cash out early in applicable circumstances.

There is hope that Hungary will eventually loosen up and open its market to foreign operators, as this will be beneficial to the country, especially in terms of revenue. However, with the latest amendments made to the Gambling Act in 2017, it seems that Hungary is even more determined to shut down any illegal gambling activities. The new amendments required that local financial institutions place a block on all payments to unauthorized gambling sites.

Are online gambling winnings taxable in Hungary?

It is clear that Hungary aims to keep a tight grip on the online gambling market, and aims to keep foreign operators at bay. Whatever the case may be there is still one very important aspect to consider before diving into online gambling entertainment.

One of the biggest factors that can quickly ruin a good win is the taxes required on it. Luckily in Hungary, casino players are not required to pay taxes on any winnings made at any land-based or online casino. Thus, you get to keep your winnings without having to worry about declaring it as income tax or paying a steep tax percentage on it.

For online casino operators, unfortunately, this is not the case. Hungary has from the start made their tax rates on annual revenue incredibly high. Operators are also required to pay fees when applying for an online casino licence. The fees and tax rates are part of what makes the Hungarian online gambling market less alluring for prospective foreign operators.

Is online gambling legal in Hungary?

Online gambling has been legal in Hungary since 2013. Unfortunately, the laws and regulations make it extremely difficult for foreign online casino operators to enter the market.

That being said, there are still various licensed online casinos that Hungarian residents can access, from the desktop, tablet or mobile phone.

With the current laws and regulations being too strict and looked down on by the EU, it is also easy for foreign operators licensed in other EU countries to provide their services to Hungarian players. While the Hungarian government tries to block and penalise these operators, it is at a disadvantage when the CJEU is called in on the case.

As an online casino player, you can access both legal and not locally licensed online casinos. These have all been vetted and reviewed and provide the best entertainment, services and rewards in a safe and secure environment.

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