The Hungarian regulatory authority imposes a penalty for “masked games of chance.”

The STFHZ cautioned operators that there are no legal loopholes, and has levied a fine against the organizer of a property lottery.

The Supervisory Authority for Regulated Affairs (SZTFH) has imposed a fine of HUF 30 million (approximately €79,000) on the organizer of a lottery that offered property as prizes. The regulator has deemed such lotteries to be “masked games of chance” and therefore illegal according to Hungarian law, which defines gambling as any game where players can win prizes and requires payment for entry, with winning dependent primarily or entirely on chance.

The SZTFH has also warned against attempting to circumvent the law by claiming that tickets were given away with purchases of physical items like books or T-shirts, as it is evident that the main purchase was the lottery ticket. The regulator has cited indicators such as refunding players’ money if the draw does not occur, cancelling the draw unless a certain number of products are sold, or selling the product at an inflated price as signs of disguised games of chance. It has emphasized that the involvement of a notary does not render such arrangements legal.

The SZTFH has issued a stern warning, stating, “The organization of such lotteries is strictly prohibited, and the regulator may impose administrative fines ranging from HUF 500,000 to HUF 100 million against the organizers. Moreover, such activity can lead to criminal prosecution, as regular organizers of illegal gambling can face up to three years in prison.”

The regulator also emphasized that in the case of advertisements promoting unlicensed gambling, the advertiser, advertising service provider, publisher of the advertisement, and the person featured in the advertisement may be jointly fined a minimum of HUF 10 million.

Furthermore, the SZTFH reminded players that participating in unlicensed gambling is done at their own risk, as the regulator lacks the authority to compel operators to deliver prizes.

The Hungarian gambling regulatory authority enforces technical regulations to facilitate the opening of the gambling market

In March, the SZTFH issued a decree to establish technical requirements for Hungary’s newly liberalized gambling market. The decree introduces new regulations at the agency level and outlines the requirements for operators seeking to enter the market.

According to the decree, operators applying for authorization from the SZTFH to operate online gambling in Hungary must demonstrate a minimum of five years of experience in licensed online gaming within a European Economic Area state. Additionally, the decree explicitly prohibits the licensing of any operator that has engaged in unlicensed gaming within the five years prior to their application.

The state monopoly on gambling in Hungary officially ended on January 1, following an amendment to the country’s Gambling Act that was passed in February 2022. This amendment introduced a competitive licensing process, as the European Union Court of Justice had previously ruled that the monopoly system was not compatible with EU law back in 2017. As a result, players are now permitted to maintain balances with multiple operators.