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Number of gaming machines plunges after tax hike

The number of gaming machines in Hungary plunged 53% after the monthly tax on the machines was raised from HUF 100,000 to HUF 500,000 on November 1, Krisztian Molnar, who oversees the the machines for the National Tax and Customs Office (NAV), said on Thursday.

The number of gaming machine rooms fell by 47% after the tax was raised, Mr Molnar said at a talk organised by fortunaweb.hu. Last year there were 21,500 such gaming rooms in the country, he added.

Hungarian Gaming Association (MSzSz) head Istvan Schreiber said the number of gaming rooms was likely to continue to drop in the coming months, falling as much as 80%.

The higher tax is expected to cut revenue of gaming machine operators by HUF 20bn to HUF 60bn this year. The tax they pay on the machines is seen falling to about HUF 30bn.

Mr Schreiber said it would cost gaming machine operators about HUF 200bn to meet new technical requirements on server-based machines by the deadline, at the end of 2012. It will take about three and a half years to recoup the investment, he added.

He estimated that one-fifth of the 1,100 businesses that operate gaming machines could leave the segment for good, resulting in the loss of more than 10,000 jobs, 5,500 in the gaming sector and the rest in the catering sector.