Hungary Is Trying to Kill Its Own Gambling Regulator, and the Timing Is Not Accidental

Key Points

• Government Resolution 1277/2026 orders the justice minister to report by 30 September on abolishing the SZTFH, Hungary’s gambling, tobacco and mining regulator.
• The trigger was a 35-year Sopron casino concession granted to a politically connected company without a public tender.
• The SZTFH is pushing back with an EU law argument, and its president holds a nine-year appointment that cannot simply be reversed.

A Scandal Hidden in a Licence Register

It appeared quietly. Around 20 July, buried inside the SZTFH’s licence register, a 35-year casino concession had been granted to CAI Hungary Kft, a company linked to businessman István Garancsi, giving the firm the right to operate the Sopron casino until 2061. No public tender was held. Hungarian law does allow a simplified “reliable gambling organiser” procedure in limited circumstances, but the timing made that legal shelter almost impossible to defend. Weeks earlier, the new Péter Magyar government had publicly pledged to review all casino concessions awarded in the closing months of Viktor Orbán’s administration, several of which critics had described as politically selective. Granting a multi-decade monopoly right in exactly that window drew immediate and sustained scrutiny.

By 31 August, the government had responded. Government Resolution 1277/2026, published in the Magyar Közlöny, directed Justice Minister Márta Görög to examine how the SZTFH’s functions could be abolished and its duties transferred to bodies under direct government control. She has until 30 September to deliver that report. Prime Minister Péter Magyar signed the document.

What the Resolution Does (and Does Not Do)?

Read carefully, the resolution is a feasibility study, not a closure order. It commits the government to examining the option. Still, the direction is hard to misread.

The SZTFH regulates far more than gambling. Beyond casinos and online betting, the authority also supervises tobacco retail, mining, insolvency practitioners, court bailiffs, cybersecurity certification and Hungary’s domestic ESG framework. If dissolved, every one of those functions would shift to bodies under direct ministerial control, a significant consolidation of state power across multiple sectors at once. Justice Minister Görög must now determine whether abolition is even legally workable within the 30-day window, a severely compressed timeline for an institution with more than 400 staff and a statutory foundation in Act XXXII of 2021.

The EU Law Problem Few Are Discussing

The SZTFH’s formal response, published on 1 September, did not simply defend its enforcement record. It raised a structural legal argument that has received almost no coverage in the English-language press. The regulator stated: “The SZTFH is an independent regulatory body established by the Parliament by Act XXXII of 2021 on the Supervisory Authority for Regulated Activities, which is subject only to legislation in terms of its activities and is solely accountable to the Parliament for its operations.”

That argument carries real weight. The SZTFH has pointed out that EU law requires certain supervisory tasks to be carried out by an administrative body independent of central government. Moving those functions directly under ministerial control could create a compliance problem with Brussels at a moment when Hungary’s relationship with EU institutions is already under scrutiny. Compounding the legal complexity, SZTFH President László Nagy was appointed in 2024 for a nine-year term; that appointment cannot be erased by a government resolution without raising further rule-of-law concerns that Hungary’s new government has specifically pledged to avoid.

None of that guarantees the government will back down. But it does mean abolition is considerably messier than the resolution lets on.

This Restructuring Started Months Before Sopron

What the story about the Sopron concession often ignores is the fact that the Hungarian government had already taken steps to dismantle its system of gambling governance several months before that. Specifically, in May 2026, the Hungarian government passed Governmental Decree 90/2026, according to which the gambling industry became part of the competence of the Minister of Finance, shifting from the cultural and entertainment policy area to the economic governance sphere.

That decree also came with an explicit political charge. Kármán accused state gambling operator Szerencsejáték Zrt of directing revenues toward political messaging rather than the public treasury. The company generated roughly €3.25 billion in revenue in 2024 and paid approximately €447 million in taxes and regulatory contributions, making it one of the state’s most productive financial assets. Examining how those profits were distributed under Fidesz became a governing priority from day one of the Magyar administration.

The August resolution targeting the SZTFH is the second major structural move on gambling governance, not the first. Taken together, they point to a deliberate effort to rebuild Hungary’s regulatory architecture rather than simply patch it.

What the SZTFH Says It Has Actually Delivered?

The regulator was not quiet in its defence. On enforcement, the SZTFH stated: “In the gambling sector, it has achieved significant results in eliminating illegal online game organisers, and in the tobacco market, it has contributed to the protection of young people by strengthening measures and regulatory solutions for the protection of minors, including through tens of thousands of traffic inspections, consistent regulatory action as a result of these, and the blocking of illegal webshops.”

That record has some substance behind it. The authority began targeting unlicensed operators in 2014, and by 2024 and 2025 had issued more than 2,000 blocking orders, a figure cited as evidence that enforcement was pushing traffic toward licensed operators. Major international brands including Unibet, PokerStars and Betsson were among those blocked for operating without a local licence. Hungary’s channelisation rate currently sits at roughly 54 per cent according to H2 Gambling Capital data, which suggests the blocking regime has had real but incomplete results.

Despite pushing back against the government’s rationale, the SZTFH confirmed full cooperation: “The Regulated Activities Supervisory Authority will, of course, cooperate in every way with the minister designated in the Government Resolution in order to effectively complete the legal due diligence, taking full account of the applicable legal environment.” Cooperation, though, is not the same as conceding the legal argument.

Expert Analysis: Replacing Independence With Control Is Not Reform

We should ask an uncomfortable question here. The Magyar government came to power partly on a platform of reducing Orbán-era state capture and restoring independent institutions. Abolishing a parliamentary-accountable regulatory body and transferring its functions directly to ministries is structurally a move in the opposite direction. Removing the SZTFH because it granted a bad concession is not obviously different in method from how previous governments removed inconvenient institutions when they became politically awkward.

The Sopron concession was a serious regulatory failure, and scrutiny of the SZTFH is entirely warranted. Viktor György Radics of DLA Piper said publicly that a “comprehensive overhaul affecting both land-based and online sectors is now almost certain,” and Hungarian courts have already found the casino concession system in breach of multiple EU laws and principles. But scrutiny and abolition are different instruments. A strictly regulated, competitive and independently overseen market benefits the state, operators and players, as legal experts have consistently argued. Replacing one politically exposed structure with a more directly government-controlled one may resolve the Sopron embarrassment while deepening the underlying problem. By 30 September, Justice Minister Görög must answer a question that goes beyond legal feasibility: whether Hungary is dismantling a flawed regulator to build something better, or simply changing which hand sits on the same lever.