Estonia Moves Forward with Plans for iGaming Tax Cuts

Estonia’s parliament, the Riigikogu, voted 51-31 to approve a previously announced cut to the country’s gambling tax, reducing it from 6% to 4% – a step toward Estonia’s goal of becoming one of Europe’s next major gambling hubs.

Estonia’s Goal to Become iGaming Hub Draws Near Despite Opposition

The initiative is being led by MP and former basketball player Tanel Tein, a member of the Finance Committee. The objectives of the reform include modernizing gambling regulations, improving transparency, and ultimately increasing tax revenues by attracting international iGaming operators to Estonia. According to Tein, the aim is “to bring global accounting to Estonia,” according to the public broadcaster Eesti Rahvusringhääling.

The proposal forms part of a broader effort by certain politicians to position Estonia as a European online gambling hub capable of competing with established centers such as Malta, Gibraltar, and the Isle of Man. Estonia’s latest decision comes after much debate about rivaling these other jurisdictions.

In October, the Estonian government announced plans for the gradual gambling tax reform. Despite the government reducing taxes on online gambling, Margus Tsahkna, Estonia’s Minister of Foreign Affairs, said the state will actually see an increase in revenue from gambling as the lower taxes should attract more operators to the Baltic country.

Some Oppose the Bill

While proponents of the gambling tax cut say this will increase revenue to the country, the bill faced strong resistance from critics. Many argued that it could divert funding away from cultural initiatives and introduce new oversight challenges. The Ministry of Finance also voiced objections, warning that a tax reduction of this scale could harm state finances if expected revenue increases fail to materialize.

The ministry cited projections suggesting that gambling tax income could decline by up to EUR 13 million (around $15 million) by 2029. Deputy Secretary General Evelyn Liivamägi further raised concerns about regulatory oversight, noting the practical difficulties of supervising online gaming operators that are largely based outside Estonia.

Members of the Reform Party, such as former finance minister and MP Mart Võrklaev, had earlier voiced criticism of the proposal. He argued that the plan should be postponed or abandoned, claiming it would offer no real benefit to the public. Despite that, he ultimately voted in favor. Finance Committee chair Annely Akkermann, who had also expressed reservations previously, ended up backing the bill as well.

The reform comes at a turbulent time for Estonia’s gambling industry, with Yolo Entertainment recently announcing significant layoffs in Estonia. The job cuts are part of a broader restructuring effort designed to consolidate operations under a single regulated brand, Yolo.com, while expanding into new international markets.