For many years, the payment-related sanctions of the Hungarian Gambling Act were rather underdeveloped and without actual enforcement provisions, which situation, as well as the fact that the EU law compliance of the relevant laws was questionable, led to the absence of enforcement on the part of Hungarian authorities.
This status quo might change because, together with a new online gambling licensing system introduced from 1 January 2023, revised and detailed rules on payment account blocking will enter into force from 1 July 2023.
According to the new payment blocking rules, in case the Supervisory Authority of Regulatory Affairs (SARA) have established that an operator provided “prohibited gambling” (i.e. not licensed by the SARA) towards Hungarian players, it shall also issue a decision ordering the restriction of the payment account used for the payment of bets or winnings by the given gambling operator.
This restriction will be ordered for an indefinite period and will be published by SARA on its website. Under the new Gambling Act, payment service providers (PSPs) will have to immediately refuse or return payment orders or payment transactions to be debited from or credited to such accounts.
In case of not complying with the payment blocking order the SARA will impose an administrative fine of HUF 1 to 5 million (~EUR 2500 to 12,500) on PSPs (some rare exceptions apply only); the fine may be imposed repeatedly.
There are many significant uncertainties about the practical implementation of the PSP blocking rules as some definitions of the new Gambling Act are yet to be interpreted. Also, the EU law compatibility of the new system will have a great impact on the actual enforceability of any sanction imposed on unlicensed operators and on PSPs.
As a result of the growing EU law concerns of the new Hungarian online gambling licensing system, PSPs might end up in the centre of serious EU law disputes between international operators not licensed in Hungary and the SARA where international operators will likely argue for the inapplicability of the Hungarian laws and so the nullity of SARA’s resolutions on payment blocking on EU law basis.
Drafting and negotiating all types of commercial agreements connected with the operation of gambling activities and/or the promotion of those activities
Providing regulatory advice for gambling operators within Hungary or elsewhere
Representation in front of the Hungarian Gambling Authority
Representation in court litigation
Challenging the decisions of the Hungarian Gambling Authority
Therefore, in the course of the preparation for the new rules effective from 1 July, PSPs should not only be prepared for monitoring SARA’s blacklists in order to identify what obligations they might have in terms of online gambling related payment blockings but probably should also take into account whether the resolutions of the SARA, together with the underlying Hungarian online gambling licensing system, comply with EU laws and so enforceable in Hungary.
For our brief introduction to the most important rules of the new Hungarian licensing system, see our previous articles:
January Update: Forms are available for companies to apply for Hungarian online sports betting licenses
Update: Liberalization of the Hungarian online sport betting system is now officially published in the Hungarian Gazette
Update: Parliamentary vote for liberalization of the Hungarian online sport betting monopoly
An important step forward in the liberalisation of the Hungarian online sports betting monopoly
The Hungarian regulator renews its activism against international gambling operators