New sheriff in Hungary after landmark Unibet case

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A new authority will preside over regulating gambling in Hungary, following the European Court of Justice (ECJ)’s discovery that the Central European country’s regulatory system violates EU law.

 

Previously, a department of the Hungarian Tax and Customs Administration wielded the power over gambling operators.

In June 2017, the ECJ rapped the Hungarian regulator on the knuckles, saying the licensing system it enforced – enacted in August 2014 – was non-transparent and in violation of EU law.

Gambling outfits from other EU states were deterred from navigating this murky system, the court said, and so were prevented from making applications – therefore, the freedom of services (provided for by Article 56 of the Treaty of the EU) was being stifled.

That judgement saved Unibet, one of Kindred Group’s 13 brands, from fines and expulsion from the country for operating without a licence, with the court deciding the penalties were invalid as they had been implemented pursuant to a licensing framework that violated EU law.

The case was heralded as a landmark judgement, as it established that penalties imposed by regulators presiding over non- EU-law-compliant systems could be fought successfully in the courts, even when gambling operators were in the wrong.

In 2016, Hungary’s enforcer performed over 13,000 inspections and issued 445 decisions, resulting in total fines of E5.55m.

The busted gambling operators lodged 80 court appeals, winning only 25 percent of them. A further 170 cases are pending.

Dóra Petrányi, of the multinational law firm CMS, noted: “As regards pending litigations, the newly established Authority will take over the place of the Administration [the old regulator] and now it is up to the competent courts how they interpret the statements of the ECJ.”


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