Version: 30042004
Editor: Franka Pals
Publisher: Novamedia
Disclaimer: Novamedia disclaims all liability for information provided within the "Novamedia European Gaming and Lottery Files".The information is supplied by independent journalistic sources. No parts of these files may be reproduced in any form by print, photo print, microfilm or otherwise, or re-distributed electronically in any form without written permission from the publisher.
The land locked Republic of Hungary located in Central Europe, borders with Austria, Croatia, Rumania, Yugoslavia, Slovakia, Slovenia and the Ukraine. After World War II Hungary, for the Hungarians 'Magyar Koztarsasag', became under communist rule. And who cannot remember the courageous revolt in 1956 and the dramatic announced withdrawal from the Warsaw Pact, which was encountered with a massive and brutal invasion by USSR military troops. What a relief it should have been for the Hungarian people to feel giving the rein by President Gorbachev in 1991. Now Hungary is a member of NATO and is the leader of the next wave of EU expansion countries.
Hungary is well known by Bela Bartok (composer, pianist) its famous football teams (twice Silver at World Championships) and water polo teams (7 times Olympic Champion). To date, Hungary has won 149 gold medals in Olympic games, which has earned them the prominent eighth place in the ranking of nations.
The Hungarian Government has offered its full support to the organization of the European Football Championships in Hungary in 2008. (The Hungarian national eleven has not played in the World Championships for sixteen years!) The Government has also set an objective of organizing the 2012 Olympic Games; the compilation of the bid is currently in progress.
Budapest, the capital of Hungary - the 'gem of the Danube' - is included in the World Heritage list of UNESCO. Hungary has the largest surface thermal water supply - after Iceland - and the hundreds of thermal springs enable thousands of people to cure a variety of illnesses. The spas are being modernized to attract younger tourists as well.
Established under a decree by Emperor Franz Joseph I in the city of Pest in 1864, the Commodity and Stock Exchange began its really spectacular course of development after the political compromise of 1867.
With the turn of the century approaching Hungary took an active role in European economy, and the quotes of the Budapest Exchange were also regularly published in Vienna, Frankfurt, London and Paris. The great economic crisis of the early 1930s also hit Hungary, and the Exchange was closed from summer 1931 to fall 1932.
The Budapest Stock Exchange re-opened its gates on June 21, 1990 as a result of the political and economic changes in the late eighties
| Population: | 10,045,407 (July 2003 est.) |
|---|---|
| Age Structure | :0-14 years:16.1%(male 832,033; female 787,336) |
| GPD | purchasing power parity - $134 billion (2002 est.) |
| Currency | Hungarian forint |
| Internet: | Internet: 15% percent of the Hungarians of 15 years and older was online in May 2003 |
| Telecom | Mobile subscriptions: 79,2 Mobile subscriptions per 100 inhabitants (February 2004) |
Website: http://www.szf.hu
The Hungarian Gaming Board, which competence is defined in the Act XXXIV of year 1991, gives out licenses for gambling and keeps records on activities which are permitted by the Gaming Board or/and on issues which are reported to the Gaming Board. The Gaming Board supervises the games that are subject to license or/and supervision.
In case of offence, the Gaming Board takes steps, so that the offence will be stopped. The Gaming Board can use sanctions against those who commit serious offences. The sanction can be a penalty, a suspension of the activity, or an activity ban: partially, for a certain period or definitely.
Furthermore, the Gaming Board is also the authority for offences with regard to slot machines and game machines. For each gambling, the Gaming Board can create further detailed rules in the form of 'general gaming rules'. The Board has used this possibility so far in respect of the operation of casinos and slot machines.
* Information on the Gaming Board and the Legislation have been provided by dr. László Oravecz, Tamás Merka and Attila Péteri.
"The Parliament passes the following Act, in the interest of defining the responsibilities related to the exercise of the gambling monopoly by the state, meeting the demand for organizing gambling activities, preventing gambling activities pursued without license, and/or those in conflict with good morals, controlling gambling organization activities, as well as using a part of revenues derived from gambling activities for public purposes."
The following shall qualify as activities aiming at the organization of gambling activities:
The Minister of Finance is authorized to define the detailed rules related to the;
The Minister of Agriculture is authorized to define the rules of horse race betting, furthermore, the Minister performing supervision of the National Office for Physical Education and Sports is hereby authorized to define the rules of the bingo game in legal rules to be created jointly with the Minister of Finance.
Website: www. szerencsejatek.hu
In Hungary, the organization of draws has long traditions going back to more than two hundred years. The first lottery draw was organized in Buda in 1770. After shorter and longer breaks, the latest history of Hungarian gambling games started in 1947, when the pools were introduced. 'Pools' is still the most popular Hungarian game, followed by the fivenumber draw lottery, introduced in 1957. Prize draw tickers were introduced in the Hungarian market in envelopes in 1967. For many years, Országos Takarékpénztár (National Savings Bank) was responsible for organizing traditional lottery and pools. As this activity was separated, Szerencsejáték Rt. national lottery company was formed in 1991. Since its foundation the Hungarian state has been its 100% owner, while the owner's rights are exercised by the Hungarian Privatization and Asset Management Company. Since 1991, professional supervision is exercised over gambling by the State Gambling Supervision, and Institution of the Ministry of Finance
Szerencsejáték Rt is now the only operator in Hungary which sells number games and sports betting, and issues and sells lottery tickets. In the nineties there were more than 20 different game operators, offering about 50 different types of lottery tickets (mainly scratch cards). Then there was annual revenue from lottery sales soaring beyond the HUF 3 billion.
Szerencsejáték Rt is a state monopoly which however does not mean that there is no competition. The toughest challenges are posed by slot machines, television shows with high prizes and Internet gambling. According to the Annual Report 2000 "Szerencsejáték Rt has had control of about two-thirds of the gaming business since its foundation."
Szerencsejáték Rt, which is fully owned by the state privatization and asset management company ÁPV, was established by the Government in 1991 following the spin-off of the toto-lotto network belonging to OTP bank.
That was also the year the gambling supervision board was established. The state also introduced the accumulated rolling jackpot (earlier wins were divided evenly based on hits of five, four, three and two).
In 1992, Szerencsejáték Rt also acquired shares in the casino and horse racing betting (the latter was abandoned in 1995) business. Telephone gambling was introduced in 1997.
In 2000 Szerencsejáték Rt reached for the first time in its history sales surpassing HUF 60 billion. To be more exact the 2000 turnover was HUF 63,733 million, which meant an increase of 13.2 percent compared with 1999.
In 2000 Hungary continued to top the list of per capita sales in East Central Europe with EUR 23.39, which was 7.5 per cent up on the 1999 figure.
The per capita sales increased even more in 2002 to EUR 43.
Other per capita sales of state-run games from WLA members in 2000 were (EUR percapita):
Source: WLA.
Hungary may sell a minority stake in its state-owned lottery operator Szerencsejáték Rt to the public in 2004.
The Hungarian government is speeding up state asset sales in part to narrow the budget deficit, a condition for adopting the Euro.
Hungary last month said it plans to raise 200 billion forint from selling state assets in 2004, cutting the budget deficit to 3.8% of gross domestic product next year from an estimated 4.8 % this year. Szerencsejáték achieved a net income of Ft 2.4 billion in 2002, compared with Ft 791 million in 2001.
Source: BBJ
Hungary's monopoly lottery and gaming company Szerencsejáték Rt, based in Buda's District I, expects to announce Ft 120 billion ($545.45 million) in revenues for 2003, well up from its original forecast of Ft 94.5 billion ($429.54 million).
The news was announced by László Somorai, Director of Communications at Szerencsejáték Rt. He explained that the new all-time record lottery jackpot of Ft 5.08 billion ($23.11 million), which finally produced a single winning ticket on December 1 2003, had contributed to this increase.
"The new record jackpot was the result of accumulated jackpots since March 1 of 2003, making it the biggest in all Europe during its peak," he said, adding that over the period (of 38 weeks) Szerencsejáték Rt had sold Ft 50 billion ($227.27 million) worth of tickets.
In the week before the win, the company sold 14.7 million lottery tickets. "In contrast to the betting week following the win which only saw sales of about 4 million tickets," Somorai said.
Last year the lottery alone generated Ft 41.46 billion ($188.45 million) of the company's total Ft 102.5 billion ($746.18 million) revenue, up 38% yearon-year and 25% higher than was estimated.
Szerencsejáték Rt had an operating profit of Ft 9.71 billion ($44.13 million) in 2002, compared to Ft 3.6 billion ($16.4 million) in 2001.
In 1999, the company had its first accu mulation roll-over exceeding the Ft 1 billion ($4.54 million) mark.
Source: The Budapest Sun.
Previous sales for Szerencsejáték Rt have been:
According to a leading Hungarian News Agency Hungarians spent Ft 164.16 on games of chance in 2002. That was 28.8% more than in 2001. Revenue from gaming machines totaled Ft 51.26, while the most popular numbers lottery, the 5/90 lottery, yielded the state a revenue totalling Ft 41.46. Gaming machine revenue was also up by 17.8% compared to 2001, while sales of the 5/90 Lotto were up by 58.0%.
Number lotteries, which are a government monopoly, yielded the state a revenue of Ft 83.44, an increase of 44.1% over 2001. Revenue from the football lottery was a mere Ft 2.86, down Ft 40 million year to year.
In 2002, there were 18,537 gaming facilities operating 29,859 gaming machines, and 6,851 video arcade games. There were 32 lottery games and 25 different types of scratchlotteries available.
Source: Hungarian News Agency
With a population of only 10 million Hungarians, around 3 million tickets are sold on an average week. Which is close to one ticket for every three Hungarians
In 2000 Szerencsejáték Rt had the following 2 product groups (total turnover in percentages)
Number Games (76.2 %):
Sportsbetting Games (18.4):
he year 2000 was a good year for Szerencsejáték Rt. On 31 December 2000, its assets totaled HUF 20.2 billion. And Szerencsejáték Rt had interests in eight businesses, with a book value of HUF 1.251 billion. The net book value of the equity investments of Szerencsejáték Rt. made up HUF 1.4 billion. The net growth in assets invested was HUF 952 million.
| Profit and Lost Statement | 1999 | 2000 |
|---|---|---|
| Sales Revenue | 223.0 | 243.6 |
| Other Income | 2.7 | 2.2 |
| Own Performance Capitalized Material-type Costs | 23.8 | 26.4 |
| Personnel Costs | 14.9 | 15.0 |
| Depreciation | 5.3 | 6.6 |
| Other Costs | 126.3 | 142.9 |
| Income from Financial Transactions | 7.9 | 10.0 |
| Expenses on Financial Transactions | 4.2 | 4.5 |
| Extraordinary Income | 0.3 | 1.3 |
| Extraordinary Expense | 1.3 | 0.7 |
| Taxes | 6.6 | 3.2 |
| Dividends Approved and Paid | 8.6 | 9.4 |
| BALANCE SHEET PROFIT | 8.4 | 4.8 |
| (EUR Million) |
Szerencsejáték Rt. paid in 2000 HUF 20.3 billion as direct taxes or contributions which was 20 percent more than in 1999. The VAT paid totaled HUF 2.8 billion. Furthermore the cooperation paid out a dividend of HUF 2.5 billion, it raised the dividend by 13.6 percent. In total in 2000 Szerencsejáték Rt made a total payment of HUF 25.6 billion to the state coffers.
Szerencsejáték Rt is involved in two casinos, which were launched in May 2000 and in January 2001, respectively the Tropicana Budapest and Casino Sopronw. The properties are owned by Szerencsejáték Rt.
Products offered:
Lotto Games:
Sports betting:
Numbers Games including Keno:
Instant Games:
| Product | 2001 | 2002 |
|---|---|---|
| Toto Pools | 2895 | 2856 |
| Goal Toto | 94 | 89 |
| Tippmix | 9077 | 10531 |
| 5/90 Lotto | 26247 | 10531 |
| 6/45 Lotto | 11572 | 15642 |
| Scandinavion Toto | 10594 | 10547 |
| Extra Lotto | 121 | - |
| Joker | 2145 | 3596 |
| Keno | 5470 | 5177 |
| Luxo | 1771 | 7108 |
| Instant Tickets | 4134 | 5297 |
| (in millions of HUF) |
Last week's jackpot of Ft 4.13 billion was the largest sum ever offered for a winning ticket in Hungary, and the largest lottery jackpot available in all of Europe at the time, Somorai said.
"Our revenues from ticket sales last week totaled Ft 3.099 billion, which compares to Ft 2.027 billion in the same week in 2002. Nearly two-thirds of the Ft 3 billion revenues came from the 5/90 Lotto game."
In 2002, Szerencsejáték had a total turnover of Ft 102 billion, of which Ft 40 billion went to the central budget in various forms, he said.
Somorai said Szerencsejáték collected record revenues of Ft 51.19 billion in the first half of 2003, up from Ft 46.44 billion in the corresponding period of last year. The record revenues on the 5/90 game came from sales of 12.2 million, 12.8 million and 12.6 million tickets, respectively, in the last three weeks.
Somorai said Szerencsejáték pays a flat gaming tax of 18 % on all revenues from all lottery game variations.
The same applies to 'Totó' and 'Góltotó,' which are games based on the results of national and international soccer games.
The gaming tax rate is 24% for sports betting game 'Tippmix' and combined ticket and drawing game 'Luxor.' However, in these cases, tax is only paid on the difference between revenues and payouts, he said.
Somorai said Szerencsejáték on average realizes the largest profits on lottery games, while sports betting games provide the smallest margin.
Somorai said the huge Lotto jackpot is attracting many tourists from neighboring countries.
"According to our estimate, every seventh ticket of the 5/90 game was purchased by a foreign citizen in the last few weeks," he said.
Somorai said the advertised jackpot amount is already taxed, so the winner can collect their prize without having to pay taxes or duties on it.
Source: Ceebiz.
An unidentified lottery winner has entered the Hungarian record books in November 2003 and become US$ 31.7 million richer at the same time, national news agency MTI reported.
State-owned lottery company Szerencsejatek Rt told MTI the US$ 31.7 million, or 5.082 billion forints, lottery payout - Hungary's biggest, is the result of 38 weeks without a winner in the popular "Otos" game, where players must match five winning numbers between one and 90.
The huge amount of cash has also attracted lottery ticket buyers in neighboring states, with weekly sales recently exceeding 10 million a week in a country of 10.1 million people.
Source: Reuters
The Board of Directors of State Privatization and Holding Rt (ÁPV Rt.), 100 per cent owner of Szerencsejáték Rt., proceeding in its capacity as founder of the company, acknowledged at its meeting of November 22nd, 2001, the resignation from the Board of Directors of Ferenc Hantosi, Chairman-CEO of Szerencsejáték Rt., with effect from 30 November 2001.
On the same date, the Chairman-CEO's contract of employment was terminated by mutual consent. Ferenc Hantosi cited personal grounds for his departure.
Also with effect from 30 November, Dr. Gábor Erent had resigned his Board of Directors membership. The Board of Directors of ÁPV Rt. appointed Margit Kovács and Dr. Magdolna Horváth Kovács as members of the
Szerencsejáték Rt Board. The mandate of the new Board of Directors members will last until 16 September 2003.
József Gébler was appointed President and CEO of Szerencsejáték Rt., effective from December 1, 2001. Mr. Gébler was formerly Deputy CEO of Szerencsejáték Rt. and had been working for the company since 1998.
It seemed that the management shake-up was not yet completed, because on July 5th, 2002 a board meeting of the (ÁPV) recalled the members of the board of directors of Hungary's national lottery company and elected new board members. The ÁPV board also came to an agreement with former CEO József
Gebler, who had to leave his post and was immediately (partly) replaced by Gábor Székely. Gábor Székely was appointed General Director of Szerencsejáték Rt. He has been President of the Proprietary Committee of the General Assembly of Capital since 1995.
The new President of Szerencsejáték Rt, Dr. Antal Pongrácz, was also appointed effective from July 5, 2002. He was the former President and CEO of Szerencsejáték Rt. between 1994-1998. At the present time he is Deputy General Director of National Savings Bank.
Number of staff is in 2001: 1146 (incl. 700 infront office/outlets).
On April 28, 2002, Szerencsejáték Rt has signed a three-year agreement to extend its data transmission system. Westel Mobil Távközlési Részvénytársaság will extend Szerencsejáték's data transmission capability by adding further mobile terminals that provide GPRS service and can be installed and reinstalled quickly and simply.
The implementation of the GPRS service (packet data transmissions by mobile phone) makes data transmission faster, more efficient and more economical. Recognizing this, Szerencsejáték Rt. decided in September 2001 to introduce the GPRS service with 15 mobile terminals on an experimental basis.
GPRS is particularly suitable for Szerencsejáték Rt because the fee has to be paid only after the data has been transmitted, i.e., when the terminals are recording and transmitting the play data, and the line holding fee does not need to be paid for periods when the terminal is not actually operating.
Satellite and wired technology will continue to be Szerencsejáték's dominant data transmission methods for online gaming. However, six months of field trials show that there is real potential for online terminals using the GPRS service.
State-owned lottery and sweepstakes company Szerencsejatek Rt has awarded a HUF 500 million (some EUR 2 million) contract to Hewlett-Packard Hungary Kft for setting up a nationwide online betting system.
The core of the network will consist of servers connected by optical cable at three different locations, including one remote site. The system, which is to handle transactions at 3,000 betting shops throughout Hungary with high security, is expected to commence operations in September.
source: Wire Reports
In Hungary two important Free Lotteries are operating.
Ingyenlotto.hu (http://lotto.fotexnet.hu/) and Lutri.hu (http://www.lutri.hu/) owned by Kapu. The latter has ceased its operations recently. Revenues of the site come from advertising. Lutri.hu was launched in May 2001 and within 6 weeks reached two million page views, a record for Hungarian websites. The prize for the lucky player choosing all seven out of 70 is about Euro 48,000.
According to information received from the Gaming Board, the so called "free lottery" is a game, which is - since there is no stake paying - not a gambling organizer activity and is not subjected to the Act XXXIV of year 1991 and to the competence of the Gaming Board, therefore this kind of activity does not require the permission of the Gaming Board.
Horse races tied to betting dates from 1827 by the Hungarian Jockey Club, and from 1879 by a company formed for Raising Horse Breeding. This company was merged in 1903 into the Budapest Trotter Racing Association and later in 1943 it became the Hungarian Trotter Racing Association. This was disbanded in 1949, and a strict ruled state institution was set up: the Horse Sports Enterprise. In 1972 six large agricultural plants founded the Hungarian Horse Racing Enterprise. Since 1990, the Hungarian Jockey Club has once again represented the interests of breeders and horse owners, but substantial change could only begin as a result of the 1994 Animal Breeding Act and the activities of the Hungarian Horse Breeders and Equestrian Sport Federation.
The operator to organize horse betting; the organization is Magyar Lóversenyfogadási Szervez_ Kft. (Hungarian Horse Betting Organizer Ltd.)
The regulations on casinos are created on several legislation levels. The basic rules are contained by the Act, which is created by the Parliament, based on the proposal of the Minister of Finance. The decree for the execution of the Act is issued by the Minister of Finance, which also regulates the fields of casinos. The Act authorises the Gaming Board to create detailed rules for the casinos, which are published as 'general gaming rules' in Pénzügyi Közlöny (Financial Gazett - the official government publication).
For a complete listing of casinos in Hungary check: http://www.casinocity.com/HU/cities.html