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More Stringent Controls Expected on Online Gambling in Hungary

July 2, 2010

A more stringent policy on online gambling may be expected in Hungary with the election of a new center-right government. The Fidesz Hungarian Civic Alliance recently won Hungary's elections, at the same time making history as being the first Hungarian political party to ever obtain a two-thirds majority within their parliament.

Fidesz is a center-right party and their conservative nature is leading many to believe that they will sharpen regulations on online gambling, creating more stringent policies than what has existed in Hungary up until now.

Currently, the local offline gambling market is strictly monitored by the Hungarian Government. Land-based poker clubs are highly restricted and the land based gambling industry faces high taxes of poker winnings. There is a 15% restriction on profits and a further 30% tax on revenues. This same monitoring does not exist at online poker sites.

Due to the stringent taxes on land based poker, many poker venues in Hungary have been forced to close, in turn forcing players to move to online casinos and poker rooms. The reasoning behind the stringent arrangements, according to the Hungarian Poker Association is to spread poker players out to regular casinos. The Ministry of Finance State Secretary, Laszlo Detrekoi, partly supports this overall plan. He believes that this arrangement has been designed with both casino and poker interests in mind. However, the result has been that poker players have moved to online options for their more user-friendly options.

Currently, Hungary does not regulate online casinos and this is the area where the newly elected Fidesz party is likely hone in on. Instead of choosing to regulate online casinos, it is likely that the conservative party will simply choose to create more stringent measures.

The expected strengthening of regulations aims to protect local conventional gambling venues. One of the ways that the Hungarian Government may consider controlling online casinos will be in much the same way as Denmark and Norway do already. The Scandinavian countries use ISP-blocking and financial limitation to limit and control online gaming. At the moment, the Hungarian media is still speculating on the precise direction that the new Hungarian Government will take. Only time will tell the exact route that the Fidesz Government will take and the extent of their policy on gambling in Hungary. In the meantime, the online gambling industry is expecting tough times ahead of them.

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