Estonian Parliament Moves Quickly to Address Online Gambling Tax Oversight

Estonia Acts to Close Online Gambling Tax Loophole

Estonia’s parliament has identified and is rushing to resolve a loophole in the nation’s gambling tax regulations. A recent legislative change unintentionally allowed online casinos to evade taxes starting in 2026. The Estonian legislative body, known as the Riigikogu, is preparing an urgent amendment to reinstate taxes on remote gambling activities.

Efforts by Finance Committee to Implement a Prompt Solution

Parliamentarian Tanel Tein introduced the corrective measure to ensure that online gambling is taxed on par with land-based casinos. The loophole arose after a law enacted on January 1, which aimed to reform the gambling tax system and increase support for sports and arts, but contained ambiguous language.

The revision to the Gambling Tax Act had inadvertently applied taxes solely to “games of skill,” omitting remote games of chance from taxation. To rectify this, the new amendment removes these restrictive terms and mandates that both chance and skill-based remote gambling attract a uniform tax rate of 5.5%.

This tax rate aligns with Estonia’s strategy to gradually reduce gambling taxes from 6% down to 4% over time. The Finance Committee has scheduled the amendment to take effect on March 1, 2026, allowing operators and tax authorities ample time to update their systems without disruption.

Potential Impact of the Tax Exemption Oversight

Committee member Aivar Kokk was among those who initially raised concerns about inconsistencies in the legislation, though the full scope only became evident once the law was active. He cautioned that the current wording would lead to substantial losses in government revenue, threatening the financing of public programs.

The committee chair, Annely Akkermann, acknowledged the oversight was unexpected given extensive scrutiny from legislators, ministry officials, legal experts, and even the president’s office during the bill’s review process.

Feedback from the gambling industry further stressed the need for swift correction. Legal representatives for gaming companies clarified that operators never intended to claim a tax exemption and recognized the omission as a clear drafting error rather than a policy change.