Estonian MP defends online gambling tax cut amid calls for early review
Tanel Tein says there are signs that Estonia’s lower igaming tax rate may be attracting businesses.
Estonia.- The Eesti 200 MP Tanel Tein has defended the controversial reduction in online gambling tax in Estonia after Prime Minister Kristen Michal instructed parliament to bring forward a review of the measure, which was introduced this year. Tein, who was one of the main proponents of the tax cut, argues that critics are drawing conclusions too quickly and that the policy should be given more time to demonstrate its intended effect of attracting international igaming operators to the country.
As of this year, Estonia’s remote gambling tax rate is being reduced by 0.5 per cent a year, from six per cent in 2025 to four per cent from 2029. A legislative hiccup led the tax to be abolished completely for online casino gaming for this year, but that has since been corrected and operators have volunteered to make up the difference and pay the intended 5.5 per cent rate.
Michal has called for an early review of the measure amid a 9.7 per cent decline in gaming tax revenue during the first seven months of 2026. Isamaa leader Urmas Reinsalu has questioned the measure, as has Margus Allikmaa, chairman of the cultural foundation Kultuurikapital, which receives funding from gaming tax revenue.
However, as reported by the public media service ERR, Tein has pushed back against claims that the lower igaming rate is responsible for the sharp reduction in overall gaming tax revenue. He argues that the contributions of the state lottery and land-based gambling have also fallen.
“A 9.7 per cent decline in total gambling tax receipts is not the ‘loss’ caused by the remote gambling tax cut,” he’s quoted as saying. “The legislative amendment changed the remote gambling tax rate. But total gambling tax also includes Eesti Loto and traditional gambling, whose tax rates were not reduced by this reform,” Tein said.
Tein noted that the legislative error affecting the first two months of the year had influenced figures and said that the Kultuurikapital foundation’s funding shortfall linked specifically to remote gambling tax revenue was approximately €956,000, representing only a small portion of the overall decline.
The Eesti 200 MP also challenged Reinsalu’s assertion that the tax reduction would cost the state €31m in revenue. According to Tein, that figure is based on projections, rather, and depends heavily on assumptions about future market behaviour. He also argued that increasing the tax rate from five per cent to seven per cent would amount to a 40 per cent rise in the tax burden imposed on operators.
“The €31m mentioned in today’s report is a forecast. Reinsalu himself told ERR that, according to the Finance Ministry’s forecast, this is a figure calculated through 2029 compared with the previous assumption. That calculation assumes, among other things, how the tax base will behave in the future. It is precisely this assumption for which I want to see an impact assessment,” Tein said.
Amid claims that Estonia has yet to show any signs of becoming the next Malta, Tein suggested that there are indications that the lower tax regime may already be helping to attract new businesses. He said six companies that had not previously been active in Estonia secured operating licences during 2026, exceeding the number granted throughout all of 2025.
He also argued that there is often a considerable delay between a company’s decision to enter a market, obtaining regulatory approval and ultimately generating taxable revenue. “It would be mistaken to claim that the eight new operators that entered the market in 2024 came because the tax was raised from 5 per cent to 6 per cent,” he said.
According to Tein, 2026 should be viewed as a transition year as operators adapt to tighter standards and anti-money laundering requirements. Raising taxes at this stage, he argued, could jeopardise Estonia’s efforts to attract larger international gambling companies over the longer term.
He argued: “Let’s give the agreed strategy time. If someone wants to reverse it now, I would first like to see an impact assessment showing that a higher tax rate will provide Estonia and Kultuurikapital more tax revenue.”
