Estonia Approves Phased Reduction of Online Gambling Tax to Attract International Operators

Parliamentary Approval for Tax Cut

Estonia's parliament, the Riigikogu, has officially approved a phased reduction of the online gambling tax. The decision, passed with a 51-31 vote in December 2025, marks a significant shift in the nation's approach to its remote gambling sector. This legislative change will see the tax rate gradually decrease from its current 6% to 4% by 2028.

The initiative was championed by the Eesti 200 parliamentary group, with MP Tanel Tein leading the bill through parliament. Reform Party MP Madis Timpson also played a key role in drafting the measures. Proponents argue that the reduction is essential for modernizing existing gambling regulations, increasing transparency, and making Estonia a more appealing destination for international online operators. MP Tein stated, 'We want to bring global accounting to Estonia,' emphasizing the goal of attracting foreign tax revenue.

Strategic Goals and Economic Impact

The primary objective behind the tax reduction is to bolster Estonia's competitiveness within the European online gambling landscape. By offering a more favorable tax environment, the government aims to attract foreign investment and position Estonia as a rival to established iGaming hubs like Malta. This move reverses a previous trend, as Estonia had increased its remote gambling tax from 5% to 6% in 2024, and had even considered a further hike to 7%.

The reform is also linked to broader national development goals, particularly in the areas of culture and sports. The plan includes the creation of a national sports infrastructure fund, to be developed in collaboration with the Estonian Olympic Committee, and a private co-financing mechanism. Additionally, a second fund will allocate 20% of new gambling tax revenues to matched donations for cultural and sports initiatives.

Concerns and Opposition

Despite its passage, the tax reduction proposal faced significant criticism. Opposition parties, notably the Centre Party, and some members of the ruling Reform Party, voiced concerns regarding the potential impact on cultural funding and the effectiveness of the measure in attracting investment.

The Ministry of Finance issued warnings about potential declines in state budget revenues, estimating losses of €6 million in 2026, rising to €13 million by 2029, if revenue projections do not materialize. Deputy Secretary General Evelyn Liivamägi highlighted ongoing regulatory challenges in overseeing remote gambling operators, many of whom have their operations and executives based abroad.