Government-close businessmen taking over online betting in Hungary?
The Hungarian authorities are once again blocking the biggest online betting sites such as bet365, Unibet and Betfair. The aim is to protect players, but those who are close to the government would still benefit.
In an interesting timing, the Hungarian authorities have again started blocking international online sports betting sites that have been declared illegal – mfor reports. The state-run Supervisory Authority for Regulated Activities (with the Hungarian acronym: SZTFH) announced on 7 September that it will block websites such as bet365, Unibet and Betfair, which means these globally known sports betting sites are not accessible from Hungarian IP addresses.
According to the official statement, the purpose of the SZTFH is only to protect players. The timing is interesting, as the authority announced at the end of June that it will work with banks to block bank accounts linked to illegal gambling, i.e. restrict deposits and withdrawals from unlicensed gambling sites from July. Hungarian banks will refuse to accept credit card payments to illegal gambling sites. These sites not only violate Hungary’s strict regulations on the protection of minors and vulnerable groups, but also fail to ensure the protection of players’ personal and banking data.
– goes the reasoning of the authority, which has promised to keep illegal online gambling under constant surveillance, impose fines if necessary and block the websites concerned.
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Online betting is currently possible on the sites owned by entrepreneurs close to Fidesz
In July this year, the monopoly of the state-owned Szerencsejáték Plc. was abolished. This has led to huge competition in the 100 billion forints (EUR 259 740) online sports betting market. The company of Árpád Habony and István Garancsi (two well-known Fidesz-oligarchs), LVC Diamond Ltd., has been granted the state licence. On 27 June, the Regulatory Authority for the Supervision of Regulated Activities granted a remote gambling licence to LVC Diamond Ltd. under the name Vegas Sports. This means that the company, which also operates casinos in Budapest, can now legally place bets on various sporting events on the vegas.hu website, according to the registry of the SZTFH.
It is a market worth hundreds of billions of euros. Therefore, it is not surprising that the Garancsi-Habony duo have set their sights on it. Szerencsejáték Plc. ended last year with a turnover of 822 billion forints (EUR 2 135 000) and CEO Andrea Mager has said in several interviews that online sports betting accounts for 20% of their turnover, or around 160 billion forints (EUR 415 584). Previously, betting was legal just on the Tippmixpro website. This ended in June, when Vegas sports started its operation.
The blockade was started by the National Revenue and Customs Administration
Meanwhile, foreign competitors are being blocked by the authorities. Of course, blocking is not that easy and foreign betting websites can defend themselves against it. They have a number of alternative links from which players can access the sites right now. Thus, the blocking may have limited results, and for a visible proportion of players, it is worth the risk to choose them. After all, to bet on foreign sites you can get bigger winnings, on a wider range of sporting events and better service. Back in 2014, the tax authority passed a series of resolutions to exclude these sports betting sites from the market.
But the betting sites went to court and won their case against the Hungarian state. Hungary’s highest judicial body, the Curia, ruled in 2018 that the blocking violated EU law on the free movement of services and that the bans must be lifted. However, the SZTFH has now blockaded the online sphere again, and it remains to be seen what international companies will do about it.