Szabo Kelemen and Partners Successful for Gambling Operators in Claim for Damages Against Hungarian State

Szabo Kelemen and Partners has successfully represented Berlington Hungary kft. and several other Hungarian gambling operators against the Hungarian State in their claims for damages caused by the Hungarian legislation, which, in 2012, banned the operation of slot machines in arcade halls without providing a transitionary period and without indemnification.

According to a summary provided by Szabo Kelemen and Partners, “according to the Hungarian Supreme Court’s recent partial-and interim judgement … if a national/domestic piece of legislation violates one of the fundamental freedoms of TFEU and the Charter of Fundamental Rights of the European Union, this violation of EU law may serve the basis for a damage claim for not only EU-domiciled persons other than Hungarians but also for Hungarians.

This is because of the principle of the prohibition of reverse discrimination between EU-domiciled persons, which, according to the Supreme Court, [can be inferred] both from EU law and the Hungarian Constitution. In addition, the Supreme Court, alongside the CJEU’s earlier decision handed down in [this case] in 2015 … in the framework of a preliminary reference ruling, held that the prohibition indeed violated EU law and that the Hungarian State had not been able to rely on any public interest that might have exempted such violation, therefore the plaintiffs are entitled for damages in accordance with the CJEU’s Francovich and Brasserie-decisions.

However, the case is continuing as to the amount of actual damages the plaintiffs suffered. It is also noteworthy that at the same time, the Hungarian Supreme Court rejected the plaintiffs’ damages claim based on gambling tax increase of 2011 by stating that such increase had not violated EU laws.”

Source: CEE Legal Matters

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