Cultural Endowment chief: hopes behind casino tax cut were based on fiction
Margus Allikmaa, head of Estonia's Cultural Endowment, wants the online casino tax rate restored to 7 percent because the expected rise in licence applications has not happened. The fund forecasts a €6–7 million shortfall next year.
The head of Estonia's Cultural Endowment (Kultuurikapital, the state body that funds major culture projects), Margus Allikmaa, says the expectations behind cutting the online casino tax were based on fiction. He told the programme "Esimene stuudio" that the rate should return to its original 7 percent.
The cut, passed last December, lowers the rate in steps from 6 percent to 4 percent by 2029. The hope was that a surge of casino licence applications in Estonia would offset the lost revenue. That has not happened: only two new applications followed, and one of them was refused. The tax break applies to online casino operators whose customers are in other countries, not those targeting the Estonian market. Such operators usually obtain licences from jurisdictions including Malta and the Isle of Man.
Revenue is falling
Tax receipts dropped 9.7 percent in the first seven months of 2026, and the Cultural Endowment expects a €6–7 million shortfall next year. The fund receives 47.8 percent of this revenue, so every cent lost to the state budget also means half a cent less for culture.
Allikmaa said that, according to the Estonian Gaming Association, taxable turnover in 2025 was €450 million, so one percentage point equals €4.5 million. If the rate falls to 4 percent, the state budget will lose €10 million or more.
Proposed fix
He proposed skipping next year's planned further 0.5-point reduction and holding the rate at the current 5.5 percent, without the six-month notice period. After that, he said, the rate should be raised back, in six-month or annual steps, to the level set out in the 2023 state budget strategy for 2024 to 2027.
Allikmaa acknowledged that the intention was good: Estonia needed a large arena and money to build it. In his view, information from casino operators was trusted more than that of the Finance Ministry, despite early warning signs. He said Eesti 200, the party, and its MP Tanel Tein, who championed the cut, could admit the mistake and correct it. The Cultural Endowment also funds sport; a new national sports arena is planned for Tallinn, Tartu or Pärnu.
