Date: 6th July 2015

Pictures: Zoltan Paczona

We reported in September last year on the opening of the Pbal Gallery pinball museum in Budapest.  But little did owner Balázs Pálfi and manager Attila Vigh realise that a state-sponsored undercover operation had been underway to close down the museum and confiscate all the machines.

Balázs Pálfi at the museum's front desk
Balázs Pálfi at the museum's front desk

Setting up a public museum is rarely free from red tape, and so the year before they opened, Balázs and Attila embarked on the lengthy process of obtaining the necessary permit to operate.  Attila told Pinball News, "It is an authorization granted by the Ministry of Human Resources which makes it possible for our pinball gallery to operate officially as a public exhibition. The people from the government and we both agreed that we didn't need to get any other permits, because the Gambling Act does not apply to pinball machines exhibited at museums."  However, that opinion was not shared by another branch of the Hungarian government.

The day after they opened in April 2014, the division of the National Tax Authority responsible for gaming - the Hungarian Gambling Supervision Commission - made the first of a series of undercover visits to the museum.  Their conclusion was in stark contrast to that of the Ministry of Human Resources.  They said the pinballs were not eligible for public display, not even at an official museum with the correct permissions.  They not only wanted the museum closed down and a hefty fine imposed, they considered the violation of the Gambling Act was severe enough to warrant the seizure of all the machines, despite the fact they belonged to Balázs' private collection.

Some of the machines at risk of confiscation
Some of the machines at risk of confiscation

Balázs and Attila told us, "This was the first time we realized there might be a problem.  Nobody had contacted us before; it was a covert operation. Needless to say we were shocked."

At the heart of the problem was the structure of the museum's entry fee, which contained an element to pay for playing on the machines (which were all set to free play).  Although this pricing system is not illegal in Hungary, the Commission thought it was unusual enough to warrant classification of the museum as an arcade or bar.  This would mean an annual operational licence costing tens of millions of Hungarian Forints (HUF 10,000,000 = $35,000/€32,000/£23,000) which would have undermined the museum's financial viability.

Over time the commission's attitude softened somewhat, with the threat to seize the machines and force closure removed.  But their classification system still didn't accommodate the museum’s unique hands-on educational nature without considering it as one big arcade.  So that was their ruling - pay a huge annual licence fee and a sizeable fine for the previous contravention.

Balázs asked Attila - who is also a lawyer - to file an appeal against the commission's decision with the court, and the campaign to save the museum began in earnest.

Balázs explained the steps they took once their appeal had been filed.  He said, "We spoke with several other lawyers and experts in order to get other useful opinions.  We also asked for a private meeting with representatives of the Ministry for National Economy to alter the related law itself. This is in progress and we'll see the outcome.  We consulted with the Tax Authority in person too and our views seemed to be converging; they verbally confirmed to us a way to smooth future operations, envisaging only some small alterations to the structure of the ticket price. But in their written decisions they dealt with the issue in a completely different spirit.  That was our main problem.  Lots of our friends also expressed their great support in various ways."

Attila explained how they put their case against the commission's ruling.

He said, "I wrote and made the appeal along with many petitions, proposals and remarks during the past year, while my high-school friend (another lawyer) represented the case verbally this June at the trial. Very briefly, the application consisted of three parts:

  1. The imposition of a totally impossible condition demanded by the Tax Authority, plus a proper and thorough explanation of the Gambling Act and why it does not apply to our machines.

  2. The exact definition of an interactive museum and the educational nature of our institution.

  3. Plenty of examples of other legitimate Hungarian interactive exhibitions and museums. We had a famous museologist witness too, although in the end they didn't need to be heard by the jury."

The court's decision came on July 2nd.

In a resounding victory, the educational nature of the museum was recognised by the court's ruling, pinball machines were confirmed as non-gambling devices, the fine imposed by the commission was overturned, and all legal costs incurred by the museum will be reimbursed.

Balázs was delighted with the outcome.  "I consider it to be a great success. It's also emotionally comforting to be able to continue our work, to focus on the most important things now.  This hobby is an essential part of my life and much more than a hobby (as to all of us). The authorities did not terminate a huge, thriving and enthusiastic pinball community, although they said it was not their goal."

Most importantly, the museum will re-open on August 5th.

The museum's doors will soon re-open
The museum's doors will soon re-open

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