Lucrative legislation
October 26, 2009
The proposed legislation would target the likes of 22-year-old poker player Peter Traply.
After winning 170,000 euros at a European poker event in Monte Carlo, he picked up a cool $348,000 (230,000 euros) at this summer's World Series of Poker in las Vegas and became the first ever Hungarian to pick up the competition's coveted poker bracelet.
"Poker is really growing fast in Hungary right now,” he said. “And I think this winning really encourages it. With even more players, poker will be even more popular than it is now."
Traply started playing the game online at the tender age of 18 “as a joke” and soon realized that it might be more lucrative than searching for a day job.
The former business student is not the only Hungarian with lucky cards. Former broker Denes Kalo, who is Hungary's number one player, has won some 1.6 million euros in the gambling craze.
Businessmen turn to gambling
Hungary's wealthiest man, real estate tycoon Sandor Demjan, was recently seen chasing a jackpot worth about 860,000 euros at the World Series of Poker Europe.
Finance State Secretary Laszlo Keller is now demanding his share of the money and wants to introduce a poker tax.
“Casinos are already paying concession fees to the state,” he explained. “I know that poker players say their situation is different because they view themselves as sportspeople, not as gamblers, like a casino. Parliament should determine the status of poker. I expect that to happen soon.”
In addition, under the proposed poker law a maximum of 10 poker tables would be allowed in a club and customers would only have to pay low entry fees to participate in a game.
Legislation sparks controversy
The Hungarian Poker Association has warned these rules would mean the end of international competitions in Hungary, and drive more people toward online games.
About a quarter of a million Hungarians play poker, quite a lot for a nation with a population of 10 million, explained Association President Gergely Tatar in a recent interview. “About 40,000 players go to clubs, the others play online.”
Instead of taxing poker winnings and introducing more regulation, Tatar believes Hungary should introduce a fixed tax per table, similar to the one in neighboring Slovakia. He estimates these measures would bring Hungary tax revenues of around 1 million euros annually, as well as the venues' corporate and labor taxes, and create one thousand jobs.
A group of Hungarian men at a poker event in Budapest appear in no mood to talk about a looming tax. Accented shouts of “call”, “deal” and “cut” reverberate throughout the room. All eyes are on the hands of a young woman in charge of dealing the cards that may make them rich.
Recent years have seen hundreds of unregulated poker clubs spring up in Hungary. The Hungarian Poker Association would like to see these establishments continue to thrive.
Eastern Europe trend
Hungary is not the only country to contemplate so-called "sin taxes" to boost public financing. While Hungary has got its sights set on poker, Slovakia wants to crack down on bar owners who sell bootleg liquor and Bulgaria plans to punish its many chain smokers by increasing tax on cigarettes by as much as 43 percent.
Even beer drinkers are threatened. The government of the Czech Republic - a country with one of the highest rates of beer consumption in the world - believes the time is right for new taxes on the Czech's favorite brew. From 2010, the tax on beer, whether produced locally or imported, will rise 33 percent to 32 koruna (1.23 euros) per 100 liters.
Czech authorities also plan to raise tax on spirits next year. If people continue to drink as they do now, the Finance Ministry expects the measures will raise 66 million euros in revenue in 2010 alone.
Back in Hungary, Peter Traply remains poker faced. Despite all these tax threats, he believes the future remains bright with “many more Hungarians” putting their cards on the table in the hope of winning a big pay-off and the prestigious poker bracelet.
"There are a lot of talented players in Hungary. So for sure I think within three years there will be another bracelet for Hungary, for sure," he said. And, if the Hungarian government has its way, there'll be a tax collector looking over their shoulders.
Reporter: Stefan J. Bos, Budapest (jg)
Editor: Sam Edmonds