Estonia is fast-tracking a review of its tax cut for online gambling after growing budgetary pressures raised doubts about the efficacy of the lower tax rate to create interest among new market players.
Kristen Michal, Estonian Prime Minister, said:
Certainly this debate will happen. The first clear principle I stated is that culture must not lose out. We have already compensated the missing funds caused by this legislative mistake, and we must find the rest as well so that culture does not suffer.
Michal ordered the Riigikogu to reassess the measure on August 28, 2026. The tax on licensed online gambling income was reduced from 6% to 4% in December 2025, with an initial review planned for 2028.
Originally, the measure was aimed at attracting new international iGaming players and increasing the tax base. However, on June 2026, the Finance Ministry announced that since the tax cut no new online casino had entered the market, and two license applications were pending.
The review of the tax reduction comes amid ongoing preparations for the 2027 Budget. The Finance Ministry forecasted that gambling tax revenues in 2026 will drop by €6 million and may potentially decline by €13 million by 2029 if sufficient investors do not arrive to operate in the country.
Michal stated:
If tax revenue does not increase, there is no point in continuing with further tax reductions
The tax cut was created by Eesti 200 with the aim to lure in international operators and boost the funding in culture and sport. However, the lack of significant results has intensified the pressure for the reconsideration of the tax reduction policy.
