Estonia is preparing to review its lower gambling tax rate for licensed online casinos after the measure failed to attract the expected influx of new operators and reduced state revenue.
Prime Minister Kristen Michal has called for an early review of the reform. In December 2025, Estonia’s parliament approved a reduction in the gambling tax on licensed online casinos from 6% to 4% over two years. The aim was to attract international operators and increase tax revenue.
So far, that has not happened. The Finance Ministry said in June that the tax cut had not brought new operators into the market, although two licence applications remain under review.
Michal said further tax reductions would not be justified unless they generate higher revenue. He also said the government had already compensated part of the shortfall affecting funding for culture and would need to cover the remaining gap.
Supporters of the reform had hoped Estonia could compete with Malta for international iGaming companies. The government forecast that annual gambling tax revenue could rise from €22 million to €30 million by 2028.
The Finance Ministry had previously warned that the tax cut could instead create losses of €6 million in 2026, €8 million in 2027, €10 million in 2028 and €13 million in 2029.
The rollout was also affected by a drafting error that temporarily allowed online casinos to operate without paying gambling tax in 2026. The error was corrected in February, while most operators voluntarily covered the resulting shortfall.
The government must now decide whether to keep the reduced tax rate.
No final decision has been announced.
Source: ERR / iGaming Today
