CEE Esport Report: Why Hungary’s National Lottery Company introduced esports betting

CEE Esports Report is a fortnightly series covering the Central and Eastern Europe region, written by Esports Insider’s esports business media partner Esport1 CEE.

Zsofia Banhegy CCO Szerencsejáték Zrt
Zsofia Banhegy, CCO of Szerencsejáték Zrt. Image via: Esport1 CEE

Since 2020, Hungarian esports fans have been able to legally bet on esports in the country through the National Lottery company (Szerencsejáték Zrt).

In this edition of CEE Esport Report, we sat down with Zsófia Bánhegyi, Chief Commercial Officer of the Hungarian National Lottery, to ask what drove the company to enter the esports industry, how important it is from a financial point of view, and what it’s doing to avoid betting fraud.

Esports Insider (ESI): Why is it important for Szerencsejáték Zrt. to actively engage with the esports market in Hungary? What goals did you set out with to conquer esports betting?

Bánhegyi: “We have been preparing to add esports betting to our offerings for several years, when the Covid pandemic broke out, and international major sports events stopped all of a sudden. This situation had a dramatic effect on our sales revenue, there were weeks when we realised a 70-90% lower sports betting turnover. In response to this situation, we accelerated our developments and introduced esports betting to the market at breakneck speed in three months. 

On August 11, 2020, we launched the only licensed esports betting service available to Hungarian bettors. This clearly made us more competitive, as our unlicensed global rivals had esports available for a long time. Based on our calculations, the segment could provide up to 10% of our sports betting revenues in the medium term, since according to recent surveys, 3.6 million Hungarian adults play video games or follow related streams.”

ESI: What were the results of entering the market, and what do you consider to be the company’s biggest success in entering the esports market over the past three years?

Bánhegyi: “We had optimistic plans, which were confirmed by our Hungarian players. Today, out of the 57 sports on offer, esports is the fourth most popular after football, basketball and tennis. We currently offer leagues for 14 popular international games. It is a defining and exceeding success that lotteries show a great willingness to bet on esports events that originally take place in the online world from the start.

“Sport simulation games (FIFA, NBA2K) are the most popular here, accounting for 90% of the total esports revenue. Their popularity is mainly due to their decades of popularity in the form of video games, and since they are based on real football and basketball matches, it is easier to follow the rules and gameplay. In this regard, Hungarian betting habits differ significantly from international trends, where strategy and action games such as CS:GO, League of Legends and Dota 2 dominate the esports betting market. I see this peculiarity as an opportunity for our further development and expansion.”

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ESI: Several betting fraud scandals have surrounded the international esports world in recent years. How does Szerencsejáték Zrt. protect itself against such cases?

Bánhegyi: “The possibility of cheating or cheating itself can arise in any sport. The organisers of the competition series work with all available means to filter out abuses. Szerencsejáték Zrt. only includes highly important, reliable tournaments in its esports betting offer through its contracted international data provider. Szerencsejáték Zrt. is a responsible game organiser and a member of the international monitoring system (GLMS, now known as ULIS) operated by major national lottery companies. 

“This system is connected to European and international associations and law enforcement authorities, so egregious cases are usually followed by a thorough investigation. Based on the assessment of the Gam-Gard international responsible gaming organisation rating system, the rating of esports is the same as that of the traditional sports betting Tippmix and Tippmixpro games. I would like to highlight one more thing, the continuous integration of artificial intelligence into esports can be of great help in more effectively filtering out fraud.”

ESI: In connection with esports betting, the company often speaks of ‘responsible gaming’. What tools are used to draw the attention of the industry’s young audience to the dangers of betting?

Bánhegyi: “Based on the surveys, Szerencsejáték Zrt. has the highest public trust index among large Hungarian companies, which is our priority to preserve, primarily with the tools of a responsible gaming organisation. When we entered the esports market, we followed the same principle as in the field of traditional sports. We assumed a strategic role in strengthening the integrity of the young, up-and-coming sport, in strengthening the competition systems, and in the professional development of athletes and judges. 

“We also consider extensive education for responsible and conscious gaming to be an important goal. In this, we entered into a strategic partnership with the Hungarian Esport Federation, HUNESZ. One example of this is the Tippmixpro CS:GO Masters, a league format tournament, which, in addition to addressing the competitors, is an important point of education about responsible gaming activities.

“Only teams with legal personality and only adult competitors can participate in the tournament, in addition to the strictest domestic competition regulations. These preparations made it possible for the final of the championship to be included in the Tippmixpro e-sports betting offer as the first Hungarian betting event.”

ESI: Szerencsejáték Zrt. operates as a state-owned company in Hungary. How does this affect the position of the Hungarian state regarding esports?

Bánhegyi: “The Hungarian national lottery company added esports betting to its offer based on market demand and is successfully developing it. Esports can offer our players twice as many betting markets as football. This is an excellent betting product. At the same time, our sponsorship and educational presence helps the responsible development of this young sport in Hungary, and we hope that as the main sponsor of the national esports team in the past two years, we have contributed to the increasing number of Hungarian international esports medals. 

“It is a great achievement that the e-athlete of the year is also chosen at the Athlete of the Year Gala along with traditional athletes. Esports shows an unstoppable expansion trend globally, and according to a PwC study, its economic growth potential is greater than that of football in the next 10 years. The number of viewers of some of its events rivals the biggest football leagues, and it seems inevitable in the future.”

ESI: What mid- and long-term goals does Szerencsejáték Zrt have for the esports market

Bánhegyi: “During 2023, we will renew our online sports betting site, tippmixpro.hu, providing Hungarian players with a number of innovative services. At the same time, the esports offer is also increasing. It will be possible to bet on new games, including Valorant, and the number of matches available for live betting is expected to increase several times, especially in the case of the simulator genre.”

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