The remote gambling industry in Estonia is headed toward significant reforms. On September 23, a faction of coalition MPs from Eesti 200 and the Reform Party submitted a draft legislation to the parliament, proposing to reduce the tax rate on gambling to 4% from 2029. Lawmakers aim to attract gambling operators and establish the nation as Eastern Europe’s biggest remote gaming hub.
Estonia Studies Gambling Tax Cut: Key Insights
- Coalition MPs believe that the tax relief will encourage gambling operators currently based out of Malta to migrate east, turning Estonia into the new remote gambling paradise.
- The draft legislation proposes reducing the gambling tax rate by 0.5% points annually until it reaches 4% in 2029. This is in stark contrast to a previous proposal to increase taxes to 7% by next year.
- Centre Party MP Andrei Korobeinik believes there is insufficient data to support the coalition MPs’ claims that a tax cut will immediately attract foreign gambling operators. This would result in the government losing valuable tax revenue.
Tax Cuts to Turn Estonia into a Remote Gambling Paradise
MPs from Estonia’s ruling coalition government submitted a draft bill to the Riigikogu, the country’s parliament, proposing to reduce taxes on gambling operations to 4% by 2029. This marks the first significant amendment to Estonia’s 2009 Gambling Tax Act. Lawmakers believe this will significantly boost the country’s economy over time.
The draft bill is headed by Reform Party MP Madis Timpson, the Chairman of Estonia’s Legal Affairs Committee. He explains that this move would encourage gambling operators to relocate from Malta, making Estonia a prime destination for online gaming companies targeting consumers globally.
Timpson explains:
A remote gambling paradise is indeed what we could become. The idea would be that those foreign firms, which are currently operating somewhere with their place of business officially registered in, for instance, Malta, would come to Estonia. Those people who are playing somewhere, I don’t know, in France, in Spain, their profits would come to us.
As online gambling continues to gain widespread popularity in Europe, with online casinos in Finland being a prime example, the demand for licensed casinos is projected to rise. The bill’s supporters argue that, despite the lower tax rate, gambling revenue will increase as more operators set up shop. Lawmakers plan to utilise the additional revenue to develop sports, cultural infrastructure, and community development projects.
Timpson also added:
We have been talking here about this famous large [sports] hall that could be built, but all the time it’s as if we deliberate and deliberate. In fact, I signed on to this initiative primarily as a member of the support group for elite sports and coaches. Every cent we manage to obtain to fund this large hall is, in my opinion, a welcome deed for athletes and cultural figures.
Tax Cut Poses Risk of Potential Losses
The draft legislation proposes to cut gambling taxes annually by 0.5% points to 4% by 2029. This is in sharp contrast to the government’s previous plan to raise taxes to 7%. While the government is quite hopeful of a favourable outcome, not everyone shares the same opinion.
Centre Party MP and Deputy Chair of the Riigikogu finance committee, Andrei Korobeinik, warned that the tax cut could reduce annual tax revenue, lowering projected GDP. He believes there is insufficient data to suggest any long-term gain from the redesigned tax regime.
The initiators of the bill believed the lobbyists, who promised that if this tax rate is lowered, then immediately casinos and remote gambling service providers will come here. The reality is that no analysis has been carried out, and the experience of other countries shows that such a small percentage drop does not affect the market much. For them, a stable economy and that certainty is much more important.
On a positive note, Korobeinik is hopeful that a debate on the bill will increase transparency regarding the funding of sports and cultural projects, which have historically been pretty inconsistent.
Up to 2017, we had the gambling council, which one could love or hate, but at least there, the decision-making process was transparent. There were experts who made proposals. Right now, nothing like that exists. If the government wants to support some major event, it just makes the decision to. The Riigikogu cannot influence it. They don’t ask an expert’s opinion, so why some other major event is left without support, no one knows.
As the gambling ecosystem evolves globally, governments have had to restructure existing tax brackets to accommodate new verticals, such as online gambling. While Estonia prepares to cut taxes to attract investments, neighbouring Latvia has taken an alternative route. Earlier in September, the Latvian government confirmed plans to increase gambling taxes starting January 1 2026, preponing the timeline by one year.
Similar incidents were also reported in Mexico, where the government proposed to increase taxes from 30% to 50% of GGR and in Poland, which plans to increase tax on gambling winnings to 15%. If Estonia cuts down gambling taxes, it would make it one of the most operator-friendly nations within the European Union.