Estonian gambling tax cut passed by parliament

Estonia is reversing the trend of many European nations that are increasing their gaming taxes. This Wednesday, the Riigikogu, the nation’s parliament, approved a gradual reduction in the tax on internet gambling in Estonia.

According to the Act, the Estonian Remote Gambling Tax would be gradually reduced by 0.5% annually, with a final rate of 4% by 2028. This reversed the gambling tax change from the previous year, which increased the Remote Gambling Tax on net bets from 5% to 6%.

Despite opposition, Riigikogu ultimately voted 51-31 in favor of the bill, which was put forth by former basketball star and Eesti 200 MP Tanel Tein. The legislation’s declared goals are to modernize gambling regulations, improve transparency, and eventually raise tax income by drawing more foreign online casino companies to Estonia.

Tein had maintained that since physical casinos would not open in Estonia, the goal was to draw in international investment, which may put Estonia in a position to rival Malta as a hub for online gambling companies. Additionally, he said that the action will support his campaign pledge to build a sizable new sports venue in Estonia.

Some Reform MPs expressed worries that it might increase oversight risks and cut funding for culture. The proposal was criticized by the coalition government’s own Ministry of Finance, which cautioned that if revenue estimates are not met, the tax cut will have a negative impact on the state budget. Gambling tax receipts are predicted to drop by €6 million in 2026, €8 million in 2027, €10 million in 2028, and €13 million in 2029.

Evelyn Liivamägi, deputy secretary general, stated that regulators already had difficulty keeping an eye on remote gambling companies, the majority of which have executives, servers, and operations located overseas.

Mart Võrklaev, a Reform MP and former finance minister, initially opposed the idea but ultimately voted in favor of it. After this week’s vote, he told the state media outlet ERR that while he still considers it a “very bad piece of legislation” but said:

It’s no secret the coalition has been held hostage over it: the threat has been that if this bill doesn’t pass, then the state budget won’t get the votes and the coalition will fall.

He added:

This bill would have passed with or without my vote. However, I saw a need to make savings in the state budget. I proposed cutting €9m from the maritime transport subsidy for one year – that’s over €40m across four years. That was my compromise: if we’re going to move forward with this bill anyway, then let’s at least save money in the budget.

In recent years, gambling taxes have been raised in a number of Western European nations. The UK last week announced an increase in Remote Gaming Duty for online casino operators to 40% starting in April 2026. Sweden upped its tax rate last year, while France and the Netherlands followed suit this year.

Now, other European nations might want to keep an eye on Estonia to see if Tein’s proposal works. It has been observed that this year’s increase in the Netherlands’ gambling tax actually resulted in a decrease in tax income. In 2026, the government still intends to implement a second increase. If Tein is right and Estonia can increase tax revenue by lowering the gaming tax, it will be interesting to observe.