The Estonian government has initiated a large-scale reform of gambling regulation. A bill has been submitted to Parliament that, if approved, will enable the country to compete with leading international gaming jurisdictions, such as Malta or Gibraltar.
The Casino Market team has prepared a detailed overview of the initiative and its potential for the state. Our experts offer professional guidance on registering and operating an online gambling business.
Expert Assessment of the Bill
The national economy has already been recognised as one of the most digitalised in the world. If the new government project is adopted, the iGaming industry will receive an impressive technological foundation for sustainable long-term growth.
Margus Reiland, WIDEN’s Attorney at Law, claimed that Estonia is confidently moving toward becoming a more attractive and competitive jurisdiction for casino operators. The initiative currently being debated in Parliament represents the most comprehensive update to the local gambling legislation in the last 15 years.
Key Provisions of the Proposal
The most anticipated regulatory changes:
- increasing noncompliance fines by at least 10-fold;
- reducing the fiscal rate for all online gaming formats;
- updating the definition of remote and additional content;
- introducing mandatory annual audits of financial statements;
- clarifying the list of requirements for anti-money-laundering programs;
- transferring all licensing powers to the Estonian Tax and Customs Board;
- tightening rules for brick-and-mortar casinos located near youth institutions.
Another highlight mentioned in the document is the expansion of certified brands’ capabilities to provide ancillary services. These encompass IT, accounting, and other solutions within a single group of companies.
Mr Reiland noted that the purpose of the bill is to modernise the outdated system, strengthen industry oversight, and significantly increase the transparency and reliability of regulation. The adopted measures will probably encourage certified operators to develop their activities in Estonia, rather than seek more favourable conditions abroad.
The timeline for implementing the proposal has not yet been determined, as the document is currently under consideration by Parliament. Experts assess the likelihood of its adoption as high, given that the government coalition remains stable and the project is expected to be approved in the foreseeable future.
Draft Law’s Effect on the State’s Tax System
The initiative, put forward by MPs from the Eesti 200 and Reform Party factions, calls for a gradual easing of the fiscal burden on remote gambling services. The annual reduction is set at 0.5%. The rate is expected to reach 4% by 2029.
According to Mr Reiland, this step is aimed at strengthening the country’s position in the global entertainment segment. Local operators welcome this strategy, viewing it as political recognition of the obvious regulatory challenges.
Despite a positive reaction from the industry, the reduction clause has sparked widespread debate among parliamentarians. The main question is whether the initiative will bring tangible benefits to the economy or will favour only commercial market players. The most vocal opponents are Keskerakond‘s members, who believe that the bill is merely a form of lobbying and will not yield any real positive results.
Supporters of the project, on the other hand, consider it a strategic step forward. Tim Heath, Yolo Group’s Founder, noted that a year ago, Parliament was planning to raise the tax rate. The recent radical change in course required significant courage and decisiveness.
This situation demonstrates that the government has become more closely aligned with the industry and has a deeper understanding of its needs. The expert is confident that reducing barriers will attract more operators to the country, paving the way for new investments, the creation of additional jobs, and larger budget revenues.
Digitalisation: Estonia’s Top Competitive Advantage
The strengths of the national regulatory program extend far beyond fiscal incentives. Even without the new legislation, the process of obtaining and renewing local licences remains relatively fast and free from excessive bureaucratic procedures.
To significantly increase trust in authorities, the country has created:
- a well-developed IT infrastructure;
- robust cybersecurity standards;
- an effective AML system.
According to Mr Reiland, Estonia has always been a reliable and promising jurisdiction. It has simply not received the international attention it could have obtained with the new framework.
One of the key indicators of the state’s digitalisation is X-Road, a national data exchange system. This unique service unites public and private databases, facilitating a massive portion of management processes. It is actively used for overseeing the gambling sector and interacting with licensees.
The solution enables sharing information between:
- government bodies;
- healthcare organisations;
- commercial sector representatives.
This technological foundation creates a significant competitive advantage for the state in the global iGaming market. The next step in attracting new investment flows will be to allow the use of cryptocurrencies as a means of payment in gambling services. This provision is also included in the draft law.
Decentralised Wallets and EU Compliance
Many European jurisdictions have significantly tightened their policies regarding digital assets in recent years. Estonia has taken a different path, making virtual tokens an approved transaction method, which allows casino owners to offer cryptocurrency bets alongside traditional fiat operations.
The key requirement is strict compliance with established legal norms, including:
- conducting systematic, in-depth financial audits;
- providing users with an expanded range of self-regulatory tools;
- applying the highest AML and KYC standards to blockchain-based flows.
Predictability and Digital Expertise
Some industry representatives are cautious about the new government reform, recalling last year’s initiative to increase gambling taxes, which was quickly withdrawn. Such fluctuations, they say, create a sense of political instability.
According to Mr Reiland, the situation does not look alarming. His central thoughts:
- Stability. Estonia has had a unified legal framework in place for many years. The only notable changes recently have concerned the online modernisation of the system itself. If the draft law is approved, it will only strengthen the existing regulatory model.
- Growth and safety. The combination of stability and a developed digital infrastructure could be key to attracting new operators to the jurisdiction. The bill also provides for the expansion of the national self-exclusion registry, HAMPI.
- Potential amendments. Various options for updating the program have been discussed, but the latest version appears rather restrained. Nevertheless, the expert is confident that HAMPI’s provisions will be reviewed in the near future, as they no longer reflect current market needs.
Additionally, Mr Heath noted that the upcoming shifts lay the groundwork for a safer and fairer industry. He believes that users will probably trust the robust security system more.
Estonia’s Bill as a Model for Other EU Countries
If the government successfully implements the proposal, the latter could become illustrative for gambling regulation throughout the European Union. Mr Reiland expressed confidence that Estonia’s results may set a new standard for the EU. He hopes that once the framework demonstrates its effectiveness, it will become the basis for restructuring legal formats in many regional jurisdictions.
In the introduced bill, the state moves away from harsh restrictions and prohibitions, focusing on creating a secure and resilient IT realm for data exchange and business support. This approach underscores the country’s commitment to technology, transparency, and a balance between user protection and the development of the operator sector.
According to Mr Reiland, after the initiative’s adoption, the Ministry of Finance will present a package of additional offers covering all remaining aspects. The pool will include detailed explanations on the use of cryptocurrencies and the expanded functionality of HAMPI. Mr Heath added that the government bill exemplifies how small but technologically advanced countries can shape the global market.
The Main Things About Estonia’s New iGaming Legislation
Essence of the Bill
Key Provisions
- +10× higher fines for noncompliance
- Gradual tax reduction — down to 4% by 2029
- Annual mandatory audits & AML strengthening
- Licensing transferred to the Tax and Customs Board
- Permission for certified brands to offer IT & accounting services
- Restrictions for land-based casinos near youth facilities
Fiscal & Political Context
- Proposed by Eesti 200 and Reform Party factions
- Debate: economy vs. lobbying interests
- Supporters see it as a strategic step, attracting jobs & investment
- Critics fear reduced revenue in the short term
Digital Edge
Crypto & Compliance
Requirements:
- Full AML / KYC compliance
- Deep annual audits
- Self-exclusion & safety tools (HAMPI registry)
Strategic Impact
The expert community is unanimous: the introduced project reflects the stability, reliability, and sustainability of the national economic ecosystem. If approved in its current form, the proposal could generate sufficient revenue to cover its costs in the coming years.
Let us review central notions from the article:
- The most anticipated regulatory changes include increased noncompliance fines, a reduced fiscal rate, updated definitions, mandatory annual audits, and clarified requirements, among others.
- The timeline for implementing the bill has not yet been determined, but niche experts assess the likelihood of its adoption as high.
- Supporters of the project view it as a strategic decision, indicating that the government has become more closely aligned with the industry and has a deeper concern for its needs.
- The country has a well-developed IT infrastructure, robust cybersecurity standards, and an effective AML system, which significantly enhances trust in the authorities.
- Estonia focuses on formalising virtual tokens as an approved transaction method, which allows casino owners to offer cryptocurrency bets alongside traditional fiat operations.
If you would like to open a successful entertainment business with the Estonian gambling licence and robust protection systems, feel free to contact us.
Have questions or want to order services?
Contact our consultants:
- e-mail: manager@casino-market.com
- feedback form.
Check the information used to contact us carefully. It is necessary for your safety.
Fraudsters can use contacts that look like ours to scam customers. Therefore, we ask you to enter only the addresses that are indicated on our official website.
Be careful! Our team is not responsible for the activities of persons using similar contact details.
