Deal Running Into 2061 Puts Agency in Crosshairs

The related government resolution published in Magyar Közlöny on Aug. 31 and signed by Prime Minister Péter Magyar calls for a review of the Supervisory Authority for Regulated Activities, or SZTFH, and of its statutory framework, in order to establish what regulatory means could carry out the termination of the authority and the transfer of its functions to bodies under government control. Justice Minister Márta Görög must report by Sept. 30.

In a statement dated Sept. 2, the government said the previous administration created the body in 2021 and handed it supervision of entirely unrelated areas: tobacco retail, the bailiffs’ chamber, gambling, mining, the liquidators’ register, and activities governed by concession contracts. The common feature, it wrote, is that all of them drew heavy criticism over political entanglement. It added that the authority’s independence is questionable because a former administrative state secretary of the Prime Minister’s Cabinet Office was appointed to lead it for nine years, and its senior posts required no open competition. This was Marcell Biró, the first president, who left the role in 2024 to become national security chief adviser to then-prime minister Viktor Orbán. The current president, László Nagy, was appointed that year, also for nine years.

At Wednesday’s government press conference, Magyar said the SZTFH “served private interests, not public interests,” cost the state extra, and would be abolished with its functions distributed. Spokesperson Anita Köböl said its veto right over concession contracts would go. The government will put the removal of those powers to Parliament, and the Concession Council would be abolished with them. Magyar said casino and tobacco concessions are both under full review, with a final decision expected within a fortnight.

What brought the authority into the line of fire was reported by the business paper Mfor on July 23. A Hungarian limited-liability company that holds the concession for the casino at Sopron, on the Austrian border, had its ten-year license expire on Jan. 15. The SZTFH extended it by six months, to July 31, and then granted a new term running to 2061. No tender was held because Hungarian law permits contracting with a “reliable gambling organizer” without one.

A concessions review was already underway. A resolution published on June 18 tasked four ministers with examining tobacco concessions and three with casinos. Transport minister Dávid Vitézy said at the time that some pre-election awards run to 2061 and that among the beneficiaries “there are political actors, so you can get as far as a former cabinet member.”

In a statement issued Sept. 1, the SZTFH responded by describing itself as an autonomous regulatory organ answerable only to Parliament, and said the sectors it supervises employ more than 50,000 people directly and generate over 1,000 billion forints ($3.16 billion) a year in state tax and contribution revenue. It pointed to enforcement against illegal online gambling operators, tobacco rules protecting minors, a geothermal framework, and a national cybersecurity audit regime where nearly 90% of covered entities passed – an oddly wide range for a regulatory body. European Union law itself requires certain state functions to be exercised by a body independent of central government, forming part of the agency’s argument – but the statement closes by saying it will cooperate fully with the minister named in the resolution.

Previously, crypto was also part of the authority’s remit. From 2024 to this summer, Hungary required every conversion of crypto into money or into another crypto-asset to be validated first by a licensed provider, a regime with no equivalent elsewhere in the EU, and the SZTFH licensed and supervised those validators. Elsewhere in Europe, the direction is also toward more supervision rather than less: Brussels is weighing a bloc-wide iGaming levy whose modeled version would fall hardest on Malta and Spain, and the ESMA has ruled the EU retail ban covers many prediction markets.