Two applications, one withdrawal
Estonia’s reduced online gambling tax has not produced the rise in new operators the government expected, six months after the Riigikogu approved the cut. Lawmakers passed amendments lowering the tax on remote gaming from 6% to 4% in stages, starting in 2027, aiming to attract foreign online casinos to register in the country and grow the tax base over time.
Evelyn Liivamägi, deputy secretary general for financial and tax policy at the Ministry of Finance, said two licence applications have been submitted since the reform passed. Both are still being processed and are unlikely to begin operating before the end of this year or early 2027. A third operator withdrew its application.
The numbers leave the reform without the immediate surge in registrations that backers had pointed to when the tax cut was introduced.
A funding gap surfaces early
Online gambling tax generated €815,000 in January and €1.12 million in February. A €220,000 shortfall in that period was covered by a supplementary transfer from the state budget to the Cultural Endowment of Estonia, which receives a share of gambling tax revenue.
The gap drew attention in Tallinn but has not translated into a lasting change in licence applications. The most recent figures show the reform still at an early stage, with too little data yet to show whether operators are changing their plans because of it.
Tein: licensing speed will decide the outcome
Tanel Tein, the Eesti 200 MP who proposed the reform, said its effects will take time to show up. He said licence approvals can run from six months to ten months depending on the application, and that approval speed matters as much as the tax rate when companies pick a jurisdiction.
Tein said it is too early to draw financial conclusions from the policy, arguing that the reform is already generating interest and should be judged over several years rather than months.
His comments point to a longer evaluation window: the tax cut’s effect may only become visible once the current applications clear and more companies decide where to base new entities.
Finland’s market opens next year
Tein said Estonia needs to stay competitive as Finland prepares to open its own regulated online gambling market in 2027. Less attractive conditions in Estonia, he said, could push operators already active there to relocate north once Finland’s licensing regime is live.
He said licensed companies face strict vetting under the new rules, including added compliance requirements and a mandatory local contact person. Tein added that the tax is not designed to increase the number of physical casinos, but to fund sport and culture in Estonia, and that a less competitive tax regime risks lower tax revenue and a net loss for the state budget.
The reform stays in place as written, with the next stage of the cut due in 2027. Whether it changes operators’ registration decisions will depend on how the pending licence applications are resolved and how Finland’s market launch reshapes the regional picture.
Source: ERR
