Market Update: Hungary – Gabor Helembai (Bird&Bird Hungary)

Mr. Helembai, thank you for accepting this interview. Our last interview with you was published in last year in EEG Report Magazine, where you said that the Hungarian regulatory environment-regarding the online gambling sector-has not been a success story for quite a long time. Have there been any changes since last year? What is the present situation in this sector in Hungary?

First of all, thank you for the opportunity to share my thoughts again here. Regarding your first question, the regulatory environment has not really changed since our latest discussion, but the notable “Unibet” judgement of the Court of Justice of the European Union may have a huge impact and I think not only on the Hungarian market. The CJEU was clear that the current legislation is not in line with the EU principles; thus, we can hardly wait for the reaction of the Hungarian regulator.

It is known that Szerencsejáték Zrt., which is a 100% state-owned gambling organiser, is the one and only operator with an online gambling license in Hungary. What do you think, will this change in the near future and what advantages would such a change bring for this sector?

To be precise, Szerencsejáték Zrt. has “only” monopoly in the online sports betting sector. The readers may know that one of the land based concessionaires has recently launched Hungary’s currently one and only licensed online casino and it is likely that further concessionaires will launch their online casino in the near future, as well. The bigger competition will of course be beneficial for the players, who will then have a wider selection of legally available games. Simultaneously it will make the unlicensed operators’ life more difficult, because the players will not have to find tricky ways to the blocked operators if they want to find high level service and gambling experience.

What can you tell us about the situation of online casinos?

As mentioned above, presumably the first online casino will be followed by others soon. From this aspect, a tough competition will start for the Hungarian players among the licensed operators. On the other hand, the Hungarian online casinos had to and still have to compete with the foreign/international operators, and this struggle was highly supported by the Hungarian regulator, which continuously blocked and imposed fine on such unlicensed websites so far. Nevertheless, the latest judgement of the CJEU may materially change this somewhat convenient status of the Hungarian operator(s): in case the blocking of the foreign websites was unlawful and therefore will be stopped in the near future, hard times will come for the Hungarian concessionaire(s).

What is your opinion how attractive is the Hungarian market for the investors of this section, knowing that the legislation is very restrictive?

As far as I know, the Hungarian market is still attractive for the investors, a lot of inquires could be heard from them regarding potential business opportunities in Hungary; accordingly, I think investors believe that the Hungarian market is still very promising. Although, as you said, the regulation is indeed very restrictive not leaving much scope for action for the potential investors. I am sure that if the market was open up to such investors, the Hungarian market would boom again.

The Court of Justice of the European Union has made a ruling this June against Hungary. The official press releases stated that, “The Hungarian legislation on the authorization of online games of chance is not compatible with the principle of the freedom to provide services,” However, this was awaited by the suing party (Unibet), but nobody has expected that the Hungarian Parliament will not comment on this. What is your personal opinion about this situation?

It is indeed a very interesting situation and such uncertainty is somewhat annoying: as far as I know the government has not yet published its official standpoint regarding the judgement and its further plans. It seems that the regulation have to be changed in certain ways, but no one knows in which direction the regulator will move on. In my personal opinion, it would be a bit surprising if the government completely changed its mind suddenly and let every operator to enter the market without restrictions after the struggle against them for so many years. I do not expect shocking alterations in the legal regime, but can hardly wait to see the next steps.

Next year is election year in Hungary. How much and in what way will the result of the election influence the online gambling market of Hungary?

Since the current situation has been evolved due to the firm and consistent standpoint of the government ruling continuously in the past 7 years, I do not believe that significant changes will occur if the present-day governing party, FIDESZ, won the election in 2018 again. In case the opposition parties won, I am sure that the whole system will be thoroughly revised because it is a recurring topic on the opposition politicians’ agenda. Nevertheless the big question still remains: will the new government prefer the local operators likewise or will they install a new, EU principle friendly regulation and let the foreign/international operators in.

What is your opinion what should be changed at the present to have a safer, more open market in Hungary?

The most important change would be if either the requirement to have a land based casino first to be able to open an online casino was cancelled or the relevant regulation gave more freedom for the land based casinos to cooperate or collaborate with (foreign) operators and subcontractors. Any of these two measurements would ensure an easier way to provide high quality services in the Hungarian market.

What advice would you give for those investors who are planning to set up a business in this sector in Hungary?

Taking into account that the current Hungarian regulatory environment is quite restrictive the investors have to be patient and/or prepared for elaborated legal structures. This circumstance also requires increased attention and efforts from the investors to be able to find the perfect solution which complies with the applicable rules.

What is your opinion about the East –European market in general?

The region is developing well and some of the countries around here have already recognized that how significant advantages they could gain from a well-regulated market. I am afraid that Hungary will not follow Romania or Bulgaria from this point of view and may lag behind in this area in the near future. Nevertheless, I truly hope that the good examples that can be found in the region will prove their reason for the existence and may be adhesive in more and more countries.

Who is your favorite actor or actress?

Leonardo Di Caprio is the number one for me not only because of his outstanding qualities as an actor, but his devotion to the environment protection and struggle against the climate change.

Where would you travel the most in Central Europe?

After focusing on Western Europe and other far destinations on the globe in the recent years of my life, I have started to rediscover the beauty of our region being really within our reach. I would like to check so many places between the sunny beaches of Bulgaria and the beautiful northern coast of Poland, but if I had to highlight something, I would definitely mention the stunning mountains of Transylvania.