The online gaming industry will be altered in Hungary following a law passed by that country’s parliament recently.
All online gaming companies operating in the central European nation will require a five-year state concession under the new law, which was highly supported by Parliamentarians, evidenced by the 235 votes for it compared to the 69 against.
The concession will have a fee of HUF 100 million (around US$440,540) per year for each company operating in Hungary. There will also be a fortnightly tax of 20 per cent on each service’s net earnings as well as a quarterly supervision fee of 2.5 per cent.
With the fees and taxes that have been implemented, the Hungarian Government has estimated that will gain an extra HUF 10 billion (just over US$44 million) in annual revenue as a result. Online gaming services that are not granted a permit would be blacklisted and blocked within Hungary’s borders, while those who do obtain a permit must restrict access to Hungarians under the age of 18.
While the measures may result in some of the money used in online gaming staying within Hungary, the taxes and fees that are being charged are quite high for a number of companies. In their current form, the taxes and fees are likely to attract only the major players in the poker world to operate in the country.
Even then, the fact that Hungary is not a large market for online poker would likely make the larger companies think twice about operating under the country’s new measures. Relatively speaking, Hungary is a small country, with a population of just under 10 million people.
Its economy is experiencing growth – something seen in few European countries at the moment – but its small online poker market would likely not help boost business’ profits with the new financial measures in place.
It is highly likely, however, that Hungary’s online poker and gaming industry will continue to exist in spite of the new and arguably high monetary concessions imposed.