From the 2026 Budget Audit
Hungary has a tobacco regulator because the state decided who can sell cigarettes.
The SZTFH polices gambling licences, the tobacco-retail concession monopoly, and mining permits — arrangements the state created. Remove the concession, and the supervisor has nothing left to supervise.
14,327 million Ft gross, partially offset by 6,254 million Ft of fees from the regulated activities — fees ultimately borne by anyone who buys tobacco, gambles, or uses energy. The net cost is real; the gross cost is a measure of how much state-constructed licensing creates work for itself.
What you see — and what you don't
The seen: an authority issuing concessions, policing licensed tobacco retailers, auditing gambling operators. The unseen: the ordinary competitive market in tobacco retail that a concession lottery replaces — and every prospective retailer who cannot compete because the concession was awarded to someone else, regardless of merit.
Objection
"Gambling and some retail activities need regulation to protect consumers from exploitation and addiction."
Answer
Genuine consumer-protection functions — fraud prevention, addiction safeguards — are retained in the residual. What the phase-out removes is the administration of the tobacco-retail concession regime and the gambling-licensing construction: arrangements that restrict who may operate, generate rents from those restrictions, and then require a regulator to police the allocation. Where the underlying licensing regime is reformed toward general business licensing, the supervisory load disappears with it.
Share if you think the real problem is not who gets the concession, but that there is one at all.
The analyst's verdict
Supervisory Authority for Regulated Activities
Rationale
The SZTFH supervises a set of activities the state has chosen to license or to operate as monopolies — most prominently gambling, the tobacco-retail concession system, and mining and geological activity. This is the clearest case in the chapter of a regulator whose existence is evidence of the underlying arrangement rather than a solution to an independent problem. The Hungarian tobacco-retail market is a state-constructed concession monopoly: the state restricted who may sell tobacco to a limited set of concession-holders, and the SZTFH then administers and polices that concession regime. The gambling regime is similarly a licensing construction. A concession-licensing authority and a gambling regulator address symptoms of state-monopoly and state-licensing arrangements, not the underlying cause — the state licenses what it need not license or operates monopolies whose rent allocation it then has to police. Where the underlying activity is deregulated — the tobacco-retail concession opened to ordinary licensed retail, the gambling concession regime reformed toward general business licensing — the corresponding supervisory load falls, and the authority contracts to whatever genuinely irreducible residual remains (mining and geological oversight has a stronger standing rationale than the concession-policing functions and would be the natural residual or could be folded into a general resources authority). A 6-year phase-out tracks the pace at which the underlying concession and licensing regimes can be reformed. As with the other fee-funded regulators, the 6,254.0 millió Ft of own revenue is levied on the regulated and licensed activities and declines as those activities are deregulated.
Transition mechanism
Linear phase-out over 6 years of the concession-policing and gambling-supervision functions, tracking the reform of the underlying licensing regimes; retain a residual for mining and geological oversight or fold it into a general resources authority. The protected party is the authority's permanent staff — on the order of 350-450 employees with administrative, legal, and technical skills. Fee revenue declines in step with deregulation.
Affected groups
Authority staff, facing a 6-year transition; tobacco retailers and prospective entrants, for whom a deregulated market replaces the concession lottery; consumers, who face a competitive rather than concession-restricted retail market.
Szabad Társadalom Intézet
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