Estonia Moves Quickly to Correct Tax Oversight Affecting Online Casinos

Tax Law Error Creates Tax Exemption for Online Casinos in 2026

A recent drafting error in Estonia’s updated gambling tax legislation has inadvertently created a loophole allowing online casino operators to avoid paying taxes scheduled for 2026. This mistake was discovered after the bill had been passed by the Estonian Parliament, Riigikogu, and received the president’s approval late last year.

Key Oversight Excludes Online Gambling from Upcoming Tax Changes

Aivar Kokk, a member of the Finance Committee, was the first to highlight this issue. He noted that discussions within the committee had already revealed potential concerns. The current legal text only specifies tax calculations for “skill-based games” and omits any reference to chance-based casino games. As a result, online gambling activities, which represent a significant portion of the market’s revenue, are left untaxed under the new rules.

Kokk explained that while the law contains provisions for tax changes in future years, the immediate gap may cause substantial losses to the state budget if not promptly addressed. The reforms were intended to gradually reduce the gambling tax rate from 6% to 4%, beginning with a reduction to 5.5% in 2026. However, due to the wording error, online casino operators would currently owe no tax at all for that year.

Annely Akkermann, head of the Finance Committee, acknowledged the mistake and assured a swift correction. She remarked that in her legislative experience, she had not encountered such a clerical error in a bill she worked on. Despite multiple reviews by lawmakers, ministry experts, legal advisors, and even the president’s office, the discrepancy went unnoticed.

Prompt Action Planned to Amend Online Gambling Tax Regulations

Akkermann outlined two potential approaches to fix the problem: incorporating the correction into another bill already under consideration or proposing a standalone amendment to clarify the language. To expedite the process, the committee plans to opt for the first method.

The urgency for correction is driven both by fiscal concerns and feedback from the gambling industry. Representatives from gaming companies have contacted the committee, emphasizing that no one interpreted the original change as exempting online casino products from taxation. The business community believes this is an unintentional drafting error rather than a deliberate policy change.

The broader tax reform approved after extensive discussions last year aimed to position Estonia as a more attractive destination for international online gambling companies. Advocates argued that lowering taxes would encourage more businesses to register and operate in the country. However, critics cautioned that reducing tax income might weaken regulatory oversight and impact overall government revenues.