Estonia's Online Gambling Tax Cut Fails to Attract New Operators

Estonia's online gambling tax cut, enacted through legislative amendments passed by the Riigikogu late last year, has so far failed to deliver the anticipated influx of new operators. The tax is being reduced gradually from 6% to 4% to encourage foreign online casinos to register in Estonia.

Only two license applications have been submitted, both still under review, with operations likely to begin no earlier than late this year or early next year, said Evelyn Liivamägi, Deputy Secretary General for Financial and Tax Policy at the Ministry of Finance. One other operator has withdrawn its application.

A legislative error discovered in January temporarily exempted online casinos from the gambling tax, leading operators to make voluntary payments instead. About €815,000 was collected for January and €1.12 million for February, with a €220,000 shortfall later covered by a supplementary budget transfer to the Cultural Endowment.

MP Tanel Tein (Eesti 200), who initiated the reform, emphasized that the effects will take time to materialize and should be assessed over several years. He warned that Estonia must remain competitive, especially as neighboring Finland prepares to open its own regulated market next year. If Estonia becomes less attractive, operators may relocate northward, reducing tax revenues. Tein noted that licensed companies undergo strict checks, and new rules include additional compliance measures and a requirement for a local contact person.