State revenue from taxes and licenses

Gambling in Hungary is a notable source of budget revenues. Money comes not only from the "game tax" (with GGR), but also through license/concession payments, corporate taxes, local fees, insurance premiums and indirect taxes on related services. Below is a map of flows, approximate structure and practical calculation using the example of a market with a ≈ of €2 billion GGR.

1) Main sources of state revenue

1. Operating revenue taxes (GGR taxes).

Charged for gross gaming income (bets minus winnings) by vertical: lotteries, bets, casinos/slots (including VLT), online games. Bets and details depend on the type of game and the rules in force.

2. Licenses and concessions.

One-time payments for obtaining licenses/concessions.

Annual permit maintenance and supervision fees.

For land casinos - concession model (fix/minimum + share of turnover/income under the terms of the contract).

3. Corporate and local taxes.

CIT (corporate income tax) on operators' income.

Local Business Tax - in favor of municipalities at the place of activity.

Payroll taxes (contributions, personal income tax of employees).

4. Indirect taxes and related revenues.

VAT/VAT on non-gaming services (F&B, entertainment, hotels), retail lotto channels, merchandise.

Advertising/media fees (if applicable).

Dividends from state-owned companies (for example, from a lottery operator) if the profit is transferred to the state.

2) What different verticals pay

Lotteries (Szerencsejáték Zrt).

GGR tax on lotto products.

Dividends to the state as a shareholder (if there is net profit).

Corporate/local taxes and staff contributions.

Commission to selling partners is a taxable base for VAT and local taxes.

Casino and slots/VLT.

Gaming tax with GGR.

Concession fee and annual supervision fees.

CIT, local taxes, contributions.

VAT on F & B/events at the casino.

Bets (online/offline).

Tax with GGR rates (including live and prematch).

License/annual fee.

Corporate/local taxes, contributions.

Online casinos and live games.

Online gaming GGR tax.

Licenses, annual supervisory fee.

CIT, local taxes (through a legal entity in Hungary), VAT on non-gaming services (for example, subscriptions/events, if any).

💡 For players: winnings from licensed operators, as a rule, are not subject to personal income tax from individuals; taxes are paid by the operator. For non-resident/unlicensed sources, the rules and risks are different - the game of unlicensed operators may entail blocking and lack of legal protection.

3) How it adds up to money: indicative structure

With a total GGR of ≈ €2 billion (lotteries, casinos/slots, bets, online), total government revenues (taxes and fees of all levels) are often estimated at €0.5-0.7 billion per year under the current market structure. Sample allocation logic:

Gaming taxes with GGR: the largest item (about half or more of all sector revenues).
Licenses/concessions/supervision: stable contribution (fixed + interest/minimums).
CIT and local taxes: depend on the marginality and geography of the business.
Contributions and personal income tax of personnel: grow with the expansion of the staff of operators/aggregators/studios.
Indirect taxes (VAT on related services): depend on sales in horeca/event activities and tourist flow.

4) Example of "end-to-end" calculation (simplified model)

Suppose a market GGR is distributed like this:

Lotteries: €800m
Casino/slots/VLT: €650m
Bets: €450 million
Other: €100 million

Next, we layer the typical industry rates and fees (conditional, to illustrate the logic):

The game tax gives, say, €300-400 million in total.
Licenses/concessions/supervision: €60-90 million
CIT + local taxes: €70-110 million (depending on expenses/depreciation).
Contributions and personal income tax from employment: €50-80 million.
Indirect taxes on related services: €30-50 million

Total in the corridor €510-730 million. This is consistent with the assessment that the sector returns ~ 25-35% of GGR to the state in the form of direct/indirect revenues (the share fluctuates due to product structure, online growth rates and year-specific rules).

5) What has changed after 2023 (opening online for private companies)

Tax base growth: more licensed operators ⇒ more GGR "in white."

Reducing leaks into the "gray" zone (locks and compliance are pushed to the license).

Competition in UX/content ⇒ higher turnover in live/slots and more rates from mobile ⇒ an increase in the tax base.

Investments in local legal entities/states ⇒ above CIT, local taxes and contributions.

6) Policies and "levers" for stable receipts

Transparent and predictable GGR tax rates by vertical.

Long concessions with clear KPIs (compliance, RG tools, investments).

Strong oversight and KYC/AML: Displacing unlicensed supply increases collectability.

Responsible advertising: balancing the growth of online and the protection of vulnerable groups.

Technologies: anti-fraud, behavioral analytics, real-time reporting - less "losses" in the chain.

7) Risks to the budget

Tightening promo/advertising can slow down turnover (especially online).

Cyber risks and bot traffic undermine pure GGR (proactive risk management is needed).

External shocks (tourism, macroeconomics) are reflected in offline and F&B cross-income.

8) What it means for stakeholders

The state receives a predictable tax base and control of RG parameters through digital channels.

Operators are a clear "price tag" for regulation and the ability to scale online.

Municipalities - local taxes and employment (cashiers, dealers, IT, marketing, security).

Players - access to licensed content, quick payouts and legal protection.

Bottom line: the Hungarian budget receives money from gambling through several channels at once: GGR taxes, licenses/concessions, CIT/local taxes, salary contributions and indirect fees. In a market with a ≈ of €2 billion GGR, this gives about €0.5-0.7 billion in revenues per year. The key to sustainability is predictable rules, displacement of the gray zone, technological supervision and the priority of responsible play.