CJEU bids against Hungarian online gambling laws

2 Mar 2018

The Court of Justice for the European Union (CJEU) threw the book at Hungary once again for its restrictive legislation on online gambling.

The UK operator Sporting Odds Ltd, a subsidiary of Sportingbet was fined HUF3.5m (€11,130) for offering wagering services without license in Hungary, which lead the EU’s Supreme Court to issue a preliminary ruling.

The CJEU decided that Hungary’s policy to unauthorize gambling licenses to any international operator not operating a land casino in the country, is controversial with its main argument that the severe betting rules are especially designed to discourage punters from gambling excessively and are therefore unlawful. 

As the EU top court claimed, “the land-based prerequisite does not constitute a condition indispensable to the achievement of the desired objectives, and that there are less restrictive measures which are capable of attaining them.”

The EU legislation on the matter, allows member-states to ban operation of gambling companies operating in other member-states provided that this restriction is not blatantly unfair and aims mainly to protect consumers and limit gambling addiction.

In other words, Hugary’s laws are irrespective to the European ones and Sportingbet’s case was not the first. Last June, Hungary was punished by the CJEU for a Unibet’s case. More specifically, Hungary was slammed for discouraging companies not having a “ten year trustworthy activity in the country, violating that way the Treaty and Functioning of the European Union (article 56), which prohibits unnecessary restrictions on trade in goods and services between EU member states.

Gambling Laws in Hungary

The online gambling market in Hungary is regulated since 2013, after years of negotiations with the EU officials and international betting companies. Even though online betting is very popular, state-held Szerencsejáték Zrt enjoys a betting monopoly and issuing a gambling license in Hungary is far from easy. Besides, operators bear all the brunt in terms of taxes, leading to unbearable taxation for foreign casinos.

Last December, Hungary modified its betting legislation, authorizing national and international local institutions to block financial transactions with unlicensed online casinos. These amendments have to be approved by the European Commission by the 16th of March in order to become low of the country.

What is more, Hungary is the 66th country in the Transparency International’s 2017 Corruption Perception Index ranking, having dropped nine points and ranked better only from Bulgaria which took the 71st position.

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