An unusual situation has arisen in the Estonian gambling sphere: a typo in the new law has exempted online casinos from tax for the current year. The reform originally planned a gradual reduction in the fee rate from 6% to 4% by 2028, with a 0.5% decrease annually.
Consequences for the Budget and the Industry
As reported by ERR News, the text of legislation specifies that the 5.5% levy now applies only to skill-based content. The document makes no mention related to games of luck. As a result, most digital gambling will remain tax-free in 2026. The error was discovered by a lawyer who represents one of the local real-money entertainment companies.
The provisions for subsequent years were drafted more carefully and included internet gambling. Thus, starting from the next stage of the reform, it will continue as planned.
Riina Sikkut, the Riigikogu Finance Committee's member and the Social Democratic Party’s politician, expressed a firm stance on the situation. According to her, national culture and sports are being deprived of expected revenue. The typo, now enshrined in law, exempts the industry from paying a significant portion of taxes.
Ms Sikkut also added that the fiscal initiative was prepared in a hurry, apparently under political pressure. Thus, it turned out to be incomplete and affected the state budget.
Reducing the Tax Burden: Process Nuances
Let us explore the visions of the major related figures:
- Madis Timpson. The Estonian Reform Party’s member and the Legal Affairs Committee’s Chairman actively supported the proposal. He viewed the rate moderation as a way to make the country a haven for iGaming and attract revenue from other European states.
- Kristen Michal. The national Prime Minister also backed up the initiative, despite criticism. Some coalition representatives were hesitant, believing that international companies value economic stability more than small tax breaks.
- Mart Võrklaev. The Reform MP and the former Minister of Finance called the decision a very poor one, made under pressure. He noted that the alliance was held hostage. If the law had not passed, the budget would not have got the votes. Thus, the coalition would have collapsed.
The latter also proposed partial compensation. Mr Võrklaev offered cutting maritime transport subsidies by €9 million, which would have saved €40+ million over 4 years.
This situation, which arose from a clerical error, demonstrates that even robust regulatory models can fail. It is a good reminder for operators to conduct a proper legal assessment of jurisdictions, explore risks, and develop a flexible growth strategy.
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