In recent years, Eastern European countries have been accelerating the modernization of the gambling industry, with Hungary leading the way with its progressive reforms. Since 2023, Hungary has officially opened its online gambling market, ending years of monopoly and providing opportunities for foreign operators to enter, also ushering the country's gambling regulatory system into a new phase.
Historical Background: From State Monopoly to Open Transformation
For many years, Hungary's online gambling market was controlled by the state, with the only legal operator being the state-owned company Szerencsejáték Zrt., which has monopolized lottery and most sports betting businesses since its establishment in 1991. Foreign operators, even if serving the Hungarian market, could not obtain a legal local license and were only operating in a gray area.
This situation has long been criticized by the European Commission, which argued that the country's restrictions on foreign capital violated the EU's free market principles. With pressure from the EU and the development of the digital economy, the Hungarian government formally proposed a regulatory reform plan in 2022, which took effect in 2023, ending the state monopoly on online gambling and initiating a licensing mechanism.
Current Laws and Regulatory System
The main legal basis for gambling activities in Hungary is the Gambling Act (Act XXXIV of 1991), which was significantly revised in 2022 to provide a legal foundation for opening the online gambling market. According to the new regulations:
Operating License Issuance Mechanism: Both foreign and local operators can apply for online sports betting and casino game licenses, but must have a legal entity in Hungary and be approved by the National Gambling Regulatory Authority (SZTFH).
Initial Licensing Requirements: Applicants must have at least one legal European gambling operation experience in the past five years, capital requirements of over 300 million forints (about 800,000 euros), and pay a security deposit of 200 million forints.
Tax Rates and Fee Structure: Under the new system, operators must pay a 15% gross gambling revenue tax (GGR) and pay an annual regulatory fee to the regulatory authority. Compared to the previous punitive fines for illegal operators, this structure is more predictable.
Responsible Gambling Regulations: Operators must comply with strict user protection regulations, including mandatory age verification, deposit limit mechanisms, mandatory time limits, etc. Additionally, advertising must adhere to ethical standards and not mislead users or target minors.
Market Status and Participants
As of early 2025, several mainstream European gambling companies have submitted applications, some obtaining temporary operating qualifications. Currently, brands such as Tipico, Bet365, Unibet have begun low-key operational tests in the Hungarian market, competing with Szerencsejáték Zrt.'s online platform TippmixPro.
The local players' response has also been quite positive. According to Hungarian media reports, within a year after opening the market, the number of active users in the online gambling market increased by nearly 35%, with most new users being under 30 years old. Meanwhile, tax contributions have also shown signs of growth, providing a new source for the fiscal budget.
Challenges and Future Outlook
Although the reforms have shown initial success, Hungary's online gambling regulatory system still faces some challenges:
Limited Enforcement Capability: Despite the establishment of a legal license system, the technical blocking and crackdown on illegal sites are not yet mature, and many unauthorized platforms still bypass regulation through VPNs and e-wallets.
Advertising Regulation Gray Areas: Although there are advertising restrictions, there is a lack of clear legislative basis for new promotional methods such as social media and influencer marketing, leading to regulatory lag.
Competition with Traditional State-Owned Platforms: TippmixPro still enjoys brand recognition and user loyalty advantages, while new foreign platforms need time to build market trust.
In the future, Hungary may draw on the experiences of countries like Sweden and the Netherlands to further introduce whitelist systems, dynamic tax mechanisms, and behavioral regulatory models, enhancing market standardization and transparency. There are also calls for the government to set up special-purpose funds from gambling revenues, such as for education, healthcare, or addiction treatment, to enhance the industry's social credibility.
Conclusion
The opening of Hungary's online gambling market marks the country's entry into a more mature, transparent gambling regulatory era. For international operators, this is a highly potential new market; for the government, it is not only a new channel for fiscal revenue but also an institutional commitment to responsible gambling concepts. As regulations continue to improve and regulatory mechanisms continue to optimize, Hungary is expected to become one of the most competitive online gambling markets in Central and Eastern Europe.
