Estonia has taken a significant legislative step by approving a phased reduction of its online gambling tax, setting the rate on a path from 6 percent to 4 percent over two years. The decision followed a 51–31 vote in the Riigikogu, advancing a plan promoted by the Eesti 200 parliamentary group and its members on the Finance Committee. One Reform Party MP abstained, while two others did not participate in the vote.

Lawmakers Back Reduction Aimed at Attracting International Operators

MP Tanel Tein led the bill through parliament, presenting it as a way to modernize existing gambling rules and make the country more appealing to online operators that serve international markets. Supporters argue that the change strengthens efforts to draw foreign companies to register in Estonia, increasing transparency and broadening the tax base.

“We want to bring global accounting to Estonia,” Tein said. He stated that physical casinos do not see Estonia as a market for expansion, which shifts the focus toward generating revenue from international business instead. He also said that “a concrete funding model has been created” to advance his campaign promise of building a major new arena.

The amendments also establish two new endowments under the Cultural Endowment of Estonia. One will target private investment, while the second will direct support toward sports facilities. Several Reform lawmakers had earlier raised concerns about reducing the gambling tax, though many ultimately voted in favor. Former finance minister Mart Võrklaev had urged reconsideration of the initiative before backing it during the vote. Finance Committee chair Annely Akkermann had also questioned the plan before lending her support.

The Finance Ministry reiterated its position that the lower tax rate carries financial and regulatory risks. Estimates project a decline in gambling tax receipts of €6 million in 2026, €8 million in 2027, €10 million in 2028 and €13 million in 2029 if expectations fall short. According to Eesti Rahvusringhääling (ERR), Deputy Secretary General Evelyn Liivamägi said that regulatory challenges tied to remote operators remain a serious issue, explaining that “it’s difficult to exercise oversight [abroad] now, and it will remain difficult going forward.”

MP Liina Kersna, the sole abstention, pointed to the projected cultural funding decrease as a reason she could not vote for the proposal. She highlighted that “according to official forecasts, €13 million will be pulled from culture over the next three years.” Tein disputed those projections and maintained that comparisons with the Foresight Center show that culture and sports “definitely won’t receive less money next year.”

The broader political goals behind the reform include positioning Estonia as a competitive location for online gambling businesses, with comparisons to established hubs such as Malta, Gibraltar and the Isle of Man appearing throughout the debate. Proponents believe the lower tax framework could support new investment and increase interest in Estonian licenses, which already benefit from efficient procedures and a digital infrastructure that appeals to remote operators.

Sector Developments Highlight Wider Industry Context

The tax reduction coincides with adjustments within Estonia’s online gambling sector. Yolo Entertainment recently announced large-scale redundancies as part of measures to move its operations under one regulated brand. At the same time, analysis presented in the public discussion has emphasized that high taxes can weaken long-term operator performance and increase the likelihood of unlicensed activity.

The gradual reduction—set to reach 4 percent by 2028—aims to address those pressures. Estonia’s government had previously considered increasing the rate to 7 percent before shifting direction and backing the reduction. Lawmakers who support the bill view the updated structure as a tool for enhancing Estonia’s competitiveness within Europe’s regulated gambling landscape.

The legislative approval marks the start of the transition period, during which tax rates will decrease by 0.5 percentage points annually. Additional debates are expected as authorities evaluate the impact on cultural programs, enforcement capacity and the broader gambling market.

• SCCG Management. The Gambling Industry’s Global Connector. Access Here.
• Source: https://news.worldcasinodirectory.com/estonia-moves-forward-with-online-gambling-tax-cut-120843