No monopoly for Hungary, Italy’s expecting Global reforms
4H and Legalbet will tell you about the upcoming large-scale changes on the European markets.
The local parliament
New legislation will allow the operators within the European Economic Area to apply for a license. The number of licenses that can be issued is not limited yet. Any operators who have offered igaming in Europe without a license during the ten years before their application will be prohibited from operating in Hungary.
All interested parties must have share capital of at least HUF1bn (£2.4m/€2.8m). License fees will cost HUF600m (£1.4m/€1.7m). Operators are also obliged to provide a minimum guarantee of HUF250m (over €705 000/over £595 000), while the tax rate for operators is yet to be determined.
The bill is subject to a standstill period following its notification to the European Commission, which runs until 4 May.
Ivan Kurochkin´s comments
Another country (now Hungary) is planning to expand its list of gambling verticals allowed in the country by eliminating the state monopoly on online sports betting (previously, online casinos licenses were only available for private companies, predominantly to those with a land based footprint in the country).
Interestingly, for some reason, this move reveals that the Hungarian state previously saw a bigger threat to the population in sports betting rather than in online casinos (it is interesting that in the Russian Federation this is reversed, judging by the verticals allowed in the state).
At the same time, apparently, the Hungarian government decided to at least make fairly high financial barriers to entry into the betting market (but still cheaper than in Ukraine), as well as establish a so-called bad actor clause, which involves a ban on obtaining a license for those who previously operated in the country without it. Meanwhile, the establishment of such a provision on the prohibition of obtaining a license for those who previously operated without a license is always a bold step from the government, since this is a deliberate restriction on the list of licensees and, as a result, state revenues.
The truth remains unclear about the details of such a bad actor clause, namely how to avoid it (if such a thing is even possible). Similar provisions can be found in countries such as the Netherlands (we never miss a chance to tip our hat to the Dutch regulator), Romania, and also in at least one of the US states, specifically New Jersey.
The American Gaming Association
However, only 18.2 million are going to bet online, at a retail sportsbook or with a bookie. Another 15.5 millions will bet casually with friends or as part of a pools or squares contest. Research claims that 76% of Americans believe that it is important to bet via legal bookmakers. This is an 11% increase from the last year.
The Ministry of the Economy and Finance has proposed new safeguards to move the local gambling market forward. The Italian MPs failed to approve any gambling reforms to be adopted by Italy’s Budget Law for 2022. A new year pointed to further conflicts between licensed operators and the Agency of Customs and Monopolies (ADM) – as incumbents require definitive resolutions on betting shops, gaming machines, online and land-based gambling concessions.
Stepping in as peacemaker, the Ministry of the Economy has put forward ‘a preliminary draft’ outlining its desired principles for the future of Italy’s regulated gambling sector. The Ministry seeks to reform Italian gambling on the key objectives of “minimising problem gambling, terminating black market activities and optimising tax income from licensed businesses”. Much focus has been placed on the “territorial reorganisation” of Italian gambling’s retail operators (betting shop, arcades, bingo halls). It is proposed to gradually reduce and concentrate them in safe and controlled venues.
Market safeguards will see the Ministry impose a new central player registry that all problem-gambling self-exclusion schemes and licensed operators (retail and online) must be integrated with. The reorganisation plan favours a reduction in ‘stake and win limits’, however, the Ministry did not provide any detail on which gaming/product vertical the measure would be applied to. Tackling black market threats head-on, the Ministry has called on the ADM to be granted more powers to coordinate investigation of unlicensed operators with the federal police.
Concluding its draft proposal, the Ministry outlined that it could implement a reform framework within a 12-to-18 month period, with legislation introduced by Italy’s Parliament through the approval of ‘one-or-two legislative decrees’. Nevertheless, the Italian gambling market needs to find a way to settle these problems as soon as possible. The gaming machines and betting licenses’ expiry date is currently set on June 30, 2022.
Ivan Kurochkin´s comments
Moving further across the vast globe, one can find examples of not only emerging markets, but also of already established ones (for example, Italy) announcing a full-scale reform of the existing regulations.
It is a bit unexpected to see Italy in this situation, since regulation in Italy is already quite effective (at least it produces a positive economic result for the state) - according to the Italian regulator, the annual GGR of the gambling market was about 13 billion Euros with a population of about 60 million people (as they say, “If its not broke then dont fix it”).
As for the essence of the changes, it is proposed that the innovations will mainly affect the land-based sector, as well as the tools and mechanisms of responsible gambling. In this context, changes related to responsible gambling can already be called a trend that is being observed and introduced in many European countries, and even in the CIS countries, no matter how surprising it may sound.
For example, as has been repeatedly noted, in Georgia, recent changes were dictated precisely by more scrupulous attention towards various institutions and instruments of responsible gambling. In this context, for instance, Russia is no exception either, where it is planned to legally regulate and establish the self-exclusion lists for players.