The European Court of Justice has ruled that actions by the Hungarian national legislature on gaming licensing may be illegal.
Until October 2012, slots could be operated in Hungary in casinos or arcades. Up to a year earlier the tax on operations was around €324 per playing position per month. But that was increased to €1,620 on November 1, 2011.
The operation of slots in arcades was also subjected to a proportional tax of 20 per cent of the net quarterly revenue from the machine over €2,916.
In October 2012, slots were confined to casinos, killing off the use of payout machines in arcades and action was started in the Hungarian courts by several companies. They claimed that EU law prohibits the imposition of drastically increased taxes and then banning the use of the machines with almost immediate effect. They sought damages and the Hungarian courts asked the European Court whether the measures were compatible with EU law.
The ECJ has now ruled that national legislation authorising the operation and playing of games of chance only in casinos is a restriction on the freedom to provide services. And the measure that increased substantially the tax on slots in arcades for a short time and them totally banned them, could be subject to legal challenge.
The revoking of arcade licences, it ruled, should be accompanied by a compensation system or a transitional period of sufficient length for the licence holder to adapt.
Kieran O’Keeffe, general secretary of Euromat, the European federation of coin machine trade associations, commented: "Euromat welcomes the ruling. The court has looked at Hungary's extremely restrictive measures and rightly found them in conflict with EU law. The ruling is a boost for operators who have battled against legislation which has inflicted serious economic damage on the sector."
