Speaker profile – Gábor Helembai – Focus on Hungary – The future of the Hungarian online gambling market

We are proud to announce that Gábor Helembai will be among the speakers of the “Focus on recent developments in Central Europe” panel at the CEEGC 2016 which will take place in Budapest on the 20th of September 2016.

A seminar type conference which is designed to encourage a Pan-European dialogue and create an in-depth report of the Central, Eastern and Northern European markets, with an additional Balkans gambling market overview allowing operators and suppliers to monetize the value of their reputations.

Gábor is a Senior Associate in the Corporate and Commercial teams in the Budapest office of Bird & Bird. He advises on both domestic and cross-border transactions and investments in various industries. He has a special sector focus on gaming/betting, advising major online and land-based operators, and slot machine manufacturers on regulatory matters. Gábor has represented clients in negotiating a concession agreement with the Hungarian State, assisted different clients from non-gaming industries in their gaming related matters (e.g. promotional games), and supported clients in transaction matters in the gaming sector.

In a recent interview in our EEGReport Magazine, Gábor explained the current state of the Hungarian market. Below you will find a short preview of the interview, which you can read in full by accessing the online version of the magazine here.

EEGaming(Zoltan Tundik): The Hungarian online gambling sector has been subject to debate for quite some time now. What are the recent developments, and are foreign operators likely to be able to apply for licensing in the next few years?

Gábor Helembai: The Hungarian regulatory environment has not been a success story in recent years. Following some unexpected changes of the Act XXXIV of 1991 on the Organisation of Gambling (the “Gambling Act“), we have finally arrived at a relatively still period, which to be honest does not project a bright future for the regulated online gambling market in Hungary at present.

What makes the situation controversial is that the Hungarian licensing procedure remains a two-step system: a private (i.e. non-State owned) operator is awarded a concession right first by the Minister for National Economy, and once the gambling organiser has obtained such concession right, he/she may then apply for a licence for the actual operation from the Gambling Supervisory Department of the National Tax and Customs Authority (the “GSD“). The main concern is that the Minister for National Economy has discretionary power to decide on who should be awarded either a land-based casino, or an online casino concession right.

In practice, however, the Gambling Act does not stipulate that private operators are not allowed to enter the market and set up a business in Hungary, it is a fact that currently only Szerencsejáték Zrt., the 100% State-owned gambling organiser, is the one and only operator with an online gambling license in Hungary. In addition, presumably this is also the reason why only three concessionaires operate 8 (eight) casinos throughout the entire country. Taking into account the current state of affairs, we do not expect that such very exclusive club of concessionaires will expand in the near future.

The number of land-based concessionaires is also important for online business, as under a recently introduced requirement a remote gambling operator should first have a land based casino concession to be entitled to apply for an online casino concession (and an operation license afterwards). As a result of the above legal regulations and facts, there is not much opportunity left for potential online operators considering opening a business here, apart from finding a way to somehow co-operate with the land based casino concessionaires.

The Gambling Act does not regulate how the land-based casino concessionaires should offer online gambling services. Accordingly, in theory it is possible to “outsource” the operation to a third party, which opens up the possibility to online gambling operators to enter the Hungarian market by means of co-operation with the land-based casino concessionaire. Due to the lack of relevant regulation so far, the parties may agree on the terms and conditions relatively freely.

Last year, there were several rumours how land-based casino concessionaires – who are of course in a very privileged position – are planning to exploit the advantages they have, but a formal obstacle prevented all parties from proceeding with this matter: no implementation rules were adopted by the competent Ministry. Thus, the GSD literally could not assess and make a decision on any application. The problem were solved at the very end of 2015 when the Ministry for National Economy adopted and published secondary legislation, which provides detailed personal, financial and technical requirements for online casinos. Accordingly, we expect significant developments on the regulated market this year, and to soon find out what was happening behind the scenes last year.

EEGaming(Zoltan Tundik): Why are you always mentioning online casinos?

Gábor Helembai: Following a recent amendment to the Gambling Act, online betting has been monopolised by Szerencsejáték Zrt., the State gambling organiser company, while other competitors from the private sector are excluded from Hungary in this respect. This means that in practice only casino games may be offered legally to Hungarian customers via the Internet, of course which makes the Hungarian market even less attractive. We will see how much lobbying influence the concessionaires have, and whether the legislator would change this highly restrictive measurement in the near future.

EEGaming(Zoltan Tundik): As we know it’s all political, however there is huge interest coming from the operators. What is the size of the Hungarian market based on niches? Sports betting, casino, poker?

Gábor Helembai: Regarding the figures of the Hungarian online gambling market, we have only very limited information available, due to the fact that currently all of the remote gambling operators are operating illegally in Hungary, and therefore no recorded data is published. What can help us to orientate ourselves, is that it has turned out that Szerencsejáték Zrt. had a revenue of HUF 110 billion (approx. EUR 350 million) from sports betting in 2014, which includes both the online and the land based versions. Furthermore, from this amount online betting alone generated more than HUF 11 billion (approx. EUR 35 million), and this number has most probably been growing. Allegedly, this legal way of sports betting is only the smaller part of the entire market, but there is no available information on the actual figures, unlicensed operators’ data is not registered. Taking into account that Szerencsejáték Zrt. does not deal with online casino games, no indicative figures are available regarding the potential market size.

Read more….

Be sure to save the date and secure your ticket to the CEEGC 2016 Budapest, which will be held on the 20th of September 2016 at the Hilton Westend City Budapest Hotel in order to hear the fresh and recent information Gábor Helembai is going to discuss. The “Focus on recent developments in Central Europe” panel is going to start 12:00 (Hungary local time).

The conference provides an efficient way of meeting new and prospect clients in the special networking session and sit down lunch.

Special reports and exclusive updates will be given by the top 20 speakers of the industry and the event is limited to 150 delegates to maximize the engagement among the peers.

The tickets can be purchased at an Early Bird rate of €200 by the end of July.

Should you have any questions, please don’t hesitate to contact us on +40 735 559 234 or by mail on organizers@ceegc.eu.

WE LOOK FORWARD TO SEEING YOU IN BUDAPEST!

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The conference provides an efficient way of meeting new and prospect clients in the special networking session and sit down lunch.

Special reports and exclusive updates will be given by the top 20 speakers of the industry and the event is limited to 150 delegates to maximize the engagement among the peers.

By ordering a ticket on this page, you are entering into an agreement with EEG Media under the following Terms and Conditions.

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Should you have any questions, please don’t hesitate to contact us on +40 735 559 234 or by mail on organizers@ceegc.eu.

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