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Gambling has long been a prohibited entertainment option, but the incredible demand on this pastime changed the game rules. The industry legalization brings significant advantages, as the countries’ governments can control the sector and get additional budget income through taxes. Casinos are legit in multiple European countries, including Hungary and Italy. The regulations in the region are pretty similar, but there are still some peculiarities in every state. Let’s explore the economic impact of gambling activities in Italy and Hungary and conclude about the benefits of legalizing the industry.
Economic Contributions
The Italian gambling industry has been booming in the last few years: according to reports, around 35% of the country’s population engages in the activity. The number of gaming establishments has grown, respectively. Such a demand significantly impacted the job market in the state, as every high payout casino creates additional workplaces. The gambling industry is taxable in Italy: operators must pay 20% of their gross profits. The industry revenue reached €1.55 billion in 2023 and is projected to experience a 5.8% annual growth.
At the same time, the Hungarian gambling market has lower revenue: it was approximately €500 million in 2023 and is predicted to grow by €586 million by the end of 2024. Around 4% of the country’s residents are engaged in casinos and betting. Gambling operators in Hungary have to pay a 15% tax and a 2.5% supervision fee from their GGR, implying lucrative conditions for foreign companies entering the state market.
Social and Cultural Impacts
Since gambling is allowed in both Hungary and Italy, tourists visiting these countries often prefer to engage in this entertainment. Therefore, players get more fun, while the governments can receive additional income to their budgets. Both states have restrictions on unlicensed casinos; in other instances, the entertainment is more than accessible to all users over 18.
On the other hand, compulsive gambling is an industry challenge that should be addressed globally, and Hungary and Italy are no exception. The prevalence of this disorder in Italy is around 1.1%, which is considered quite low. However, AAMS, the local regulatory authority, regularly initiates amendments (like the ban on crypto usage in casinos) to make the industry more controlled and manageable. In this case, responsible authorities can minimize the harmful gambling impacts on the country’s residents and tourists and provide a more transparent environment for everyone involved.
At the same time, the gambling addiction rate in Hungary reached 1.9%, which is considerably high for a European country. Therefore, the government and regulatory authorities have already launched a set of initiatives to inform users of potential negative consequences.
Regulatory Framework and Policies in Italy and Hungary
As already mentioned, gambling is legal in both countries, and regulations are pretty similar. Hungary and Italy allow their residents to join only licensed and secure casinos, providing worthy conditions to their members. The Supervisory Authority of Regulatory Affairs is the main body controlling the sector in Hungary; it accepts both domestic gaming clubs and overseas operators with an appropriate certification. Operators desiring to acquire licensing from SZTFH, the main regulatory body in the state, must have at least five years of experience in the European market.
In Italy, gambling is prohibited when the outcome depends on the player’s skills, which doesn’t concern online casinos. Therefore, slots, table games, and many more entertainment options are allowed within the country. The Autonomous Administration of State Monopolies is the Italy’’s central regulatory body and license issuer. The recent legislation provides multiple opportunities for gambling companies launched in Italy; however, the latest amendments imply restrictions on cryptocurrency usage. The state’s market is also free for international operators. They must ensure compliance with the local legislation, including the availability of certification from responsible authorities and providing fair and transparent conditions to their members.
Economic Challenges and Resilience
The world financial crisis couldn’t but impact both the Italian and Hungarian economies, and numerous factors affect this process. The slowing GDP rate (-0.6%) is the primary challenge Italy will face in 2024; at the same time, Hungary is projected to experience a decrease of 2.6%. Higher inflation will also impact both states, significantly affecting the entire EU’s purchasing power.
Of course, these difficulties will also touch the gambling markets in the countries, as customers simply lack funds for entertainment. Even though the industry is forecasted to grow, these challenges can still affect the trend. Hungary and Italy’s updated fiscal policies and reforms aim to solve the problem and minimize potential risks for the countries’ economies.
Final Insight
Gambling has been a part of the population’s culture for centuries, and the popularity of this entertainment is boosting in 2024. Legalization of this activity in Italy and Hungary allows states to get additional tax income to their budgets and create job opportunities for thousands of people. Therefore, casinos within these countries should operate according to the actual legislation and track all the latest amendments. Overall, Italy and Hungary are similar in their gambling industries, providing safe and transparent environments for businesses.
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