Estonian authorities have approved a reduction in the tax rate for online casino revenues

The Estonian government has approved amendments to the Gambling Regulation Act that will reduce the tax rate for online casinos. The tax burden on this sector will decrease from the current 6% to 4%. The official aim of this initiative is to create a sustainable source of long-term funding for the development of sports and culture in the country.
Foreign Minister Margus Tsahkna presented specific forecasts related to this decision. He stated that if the projections hold true, revenues could rise from the current €22 million (approximately $24 million) to €30 million (around $33 million) by 2028. The additional income will be directed towards cultural and sports organizations, creating a stable financial mechanism and easing the burden on the state budget.
However, this legislative initiative has sparked significant controversy. Former Finance Minister Mart Värklaev criticized the plan, pointing to anticipated budget shortfalls. According to his estimates, the revenue shortfall could reach €6 million (about $6.6 million) in 2026, €8 million (approximately $8.8 million) in 2027, and €10 million (around $11 million) in 2028. He emphasized that after the tax increase in 2023, nine new operators entered the market, which contradicts the argument that a tax reduction is necessary to attract business.
Another strong counterargument has been the comparison with the tax policies of other European countries. Critics highlight that even the current rate of 6% appears quite moderate compared to 21% in the UK, 24.5% in Italy, and 54.9% in France. Thus, the economic rationale for reducing an already low tax rate is being called into question.
Notably, a native of Estonia recently won a record jackpot at the online casino Optibet.