Estonia Approves Gradual Cuts to Online Gambling Tax
Estonia has adopted amendments to its Gambling Tax Act, paving the way for a gradual reduction in online gambling taxes from 6% to 4%. The bill passed on October 21 with 48 votes supporting and 18 opposing it, reversing earlier plans to increase the rate to 7% in 2025.
The government argues the move will enhance Estonia’s competitiveness, attract global operators and strengthen stable funding for cultural and sports programs. Officials hope the policy will help Estonia rival Malta as a hub for betting businesses.
Foreign Minister Margus Tsahkna said annual tax revenue is expected to rise from €22 million to €30 million by 2028 if new operators enter the market. The decrease will be implemented in 0.5-point stages and will only continue if revenue targets (such as €27 million ) are met. Safeguards will allow authorities to halt rate cuts if projections fail.
Opposition warns of financial risks
The policy has sparked strong backlash, including from former finance minister and Reform Party member Mart Võrklaev, who called the decision premature. He warned of fiscal damage, noting finance ministry projections of losses amounting to €6 million in 2026, €8 million in 2027 and €10 million in 2028.
Võrklaev disputed claims that lower taxes will bring operators flooding into the market, referencing nine new entrants after a tax hike in 2023 that brought €4 million annually. He argued the assumption of a major influx is “unstable and optimistic.”
Government defends “strategic move”
Tsahkna rejected the criticism as politically motivated, insisting the policy is grounded in solid analysis. Prime Minister Kristen Michal also backed the cuts, comparing them to Estonia’s corporate tax reforms, which were initially dismissed but later credited with boosting economic growth.
Michal stressed the objective is not to stimulate gambling volumes but to bring more licensed operators into Estonia under robust oversight. Plans include strengthening the Financial Intelligence Unit’s role.
Push to become “remote gambling capital”
The reform is a key initiative from Madis Timpson, chair of the Riigikogu Legal Affairs Committee, who envisions Estonia becoming a “remote gambling paradise.” He believes lower taxes could attract operators currently headquartered in Malta and drive investment in Estonia’s tech-driven betting industry.
