Estonia Stuns Europe With Massive Gambling Tax Cut — Operators Are Celebrating

In a move that marks a sharp U-turn from earlier plans, Estonia’s parliament has approved a phased reduction of the country’s online gambling tax — a decision aimed at attracting international gambling operators and reshaping Estonia’s role in the global iGaming market.

From 6% to 4%: What the Vote Does

On Wednesday, the Riigikogu voted 51 to 31 in favour of amendments to the gambling tax regime, brought forward by the Eesti 200 party and supported by some members of the Reform Party. Under the new law, the online (remote) gambling tax will gradually fall from 6 percent to 4 percent over a two-year period.

The legislation also revokes earlier plans to raise the rate to 7 percent in 2026.

Why Estonia Took This Path

Supporters of the tax cut — led by MP Tanel Tein — argue that it’s part of a broader strategy to modernize Estonia’s gambling regulatory framework, attract foreign iGaming operators, and increase transparency.

With physical casinos unlikely to expand in Estonia, lawmakers see licensed remote-gambling operators as the key to boosting state revenues. The hope is that by lowering the tax burden, more international operators will choose to register under Estonian licences — increasing the overall tax base.

Proponents also envision redirecting gambling tax revenue towards public goals. Under the updated legislation, some of the proceeds are earmarked for sports and culture, including potential support for new sports infrastructure.

Critics Raise Concerns Over Revenue and Oversight

The move has sparked criticism from opposition lawmakers and officials within the Ministry of Finance, who warn that the tax cut could lead to a decline in public revenue — especially if the influx of new operators doesn’t materialize.

According to government estimates cited by the Ministry, the reduction could result in a loss of €6 million in 2026, rising to €13 million by 2029 if revenue targets under-perform.

Beyond the financial risks, critics also caution that lowering the tax may impair regulatory oversight. Remote gambling operators often run cross-border operations — with servers, management, and customers spread across countries — making supervision challenging. A Strategic Gamble on iGaming Growth

This tax reform marks a departure from the trend in many European countries — which are increasingly tightening gambling regulations and raising taxes. Instead, Estonia is banking on liberalisation to strengthen its competitiveness in the fast-evolving iGaming sector.

Supporters frame the decision as a long-term investment in Estonia’s digital economy: by positioning the country as an attractive hub for online gambling firms, the government hopes to generate stable, increased revenue and channel some of that into culture, sports and infrastructure.

Whether this gamble will pay off depends on the reaction of the global iGaming industry — and on whether Estonia can navigate the regulatory and financial challenges that come with lower taxes.