Estonian Prime Minister Kristen Michal has instructed the national parliament (Riigikogu) to initiate an early re-evaluation of the tax reduction granted to licensed online gambling operators. The measure, enacted in December 2025 as part of the coalition budget, reduced the gross gaming revenue tax rate for remote casinos from 6% to 4%. While the policy was originally scheduled for a comprehensive review in 2028, growing fiscal pressures and negotiations over the 2027 state budget have accelerated government scrutiny.
The tax cut was strongly championed by the junior coalition partner Eesti 200, which argued that lower rates would attract major international iGaming enterprises, turning Estonia into a northern European technology and licensing hub similar to Malta. However, Estonia’s Ministry of Finance revealed that no new online casino operators have entered the market since the policy came into force, with only two licence applications currently under consideration. Meanwhile, the Treasury projects revenue shortfalls from gambling taxes of €6m in 2026, potentially rising to €13m by 2029 if market expansion fails to materialize.
With Estonia facing a projected government budget deficit of 4.4% of GDP alongside increased defence spending exceeding 5% of GDP, the government is seeking to plug revenue gaps. PM Michal emphasized that public funding for national culture and sports, traditionally financed by gambling duties, must not suffer. He noted that if lowering tax rates fails to broaden the tax base and generate higher aggregate receipts, maintaining the preferential rate is fiscally unsustainable.
For international iGaming operators and software providers holding or pursuing an Estonian licence, this early legislative review indicates that the 4% tax rate may be reversed back to 6% ahead of the originally planned 2028 timeline.
Source: SBC News
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