Estonia Plans Gradual Reduction of Online Gambling Tax
Estonia’s Initiative to Lower Online Gambling Tax
The government of Estonia has agreed to reduce the tax on online gambling from the current rate of 6% down to 4% in a phased approach. Advocates of this change believe it will make Estonia a more appealing destination for international gambling operators and provide a steady source of funding for cultural and sports activities.
Details of the Tax Reduction and Expected Impact
Margus Tsahkna, Estonia’s Minister of Foreign Affairs, mentioned that the government expects online gambling revenues to increase from approximately EUR 22 million (about $25.44 million) today to EUR 30 million ($34.7 million) by the year 2028, assuming the projections hold true. All generated funds will be allocated to cultural and sporting initiatives.
The tax decrease will be implemented incrementally, with reductions of 0.5% at a time. These reductions will only continue if the government reaches certain revenue targets, such as EUR 27 million ($31.2 million). Mechanisms are set up to pause the cuts if the anticipated growth in revenue from new gambling companies does not happen.
The proposal to lower the online gambling tax has been under discussion for several weeks. Earlier in October, Madis Timpson, a member of the Reform Party and chair of the Legal Affairs Committee, introduced legislation aimed at positioning Estonia as a leading iGaming hub in Northern Europe.
Prime Minister Kristen Michal supported the plan, comparing it to previous corporate tax reforms that initially faced skepticism but eventually drove significant economic growth. Michal emphasized that licensing and financial oversight of gambling firms will continue to be rigorously managed by Estonia’s Financial Intelligence Unit (FIU). He also assured that if the tax cut leads to any shortfall in cultural funding, it will be supplemented from other budget resources.
Concerns and Criticism of the Tax Cut
Some opposition voices have emerged against the tax reduction. Mart Võrklaev, a former finance minister and Reform Party politician, criticized the move as premature and potentially damaging to the country’s finances. According to the Ministry of Finance’s estimates, the tax cut could cause revenue losses of EUR 6 million ($6.4 million) in 2026, EUR 8 million ($8.5 million) in 2027, and EUR 10 million ($10.6 million) in 2028.
Võrklaev also questioned the optimistic view that new companies will join the Estonian gambling market. Noting that nine new operators entered following a previous tax increase in 2023 but only contributed an additional EUR 4 million ($4.3 million) in revenue, he argued that the government appears to prioritize the interests of a small group over the general public.
Additionally, Andrei Korobeinik, deputy chair of the Parliament’s Finance Committee and a member of the Center Party, labeled the proposal as “cynical,” highlighting the contradiction of the government reducing gambling taxes while increasing taxes on ordinary citizens.
