Estonia PM Orders Fresh Review Of Online Casino Tax Cut
Estonian Prime Minister Kristen Michal has asked his coalition to reopen debate on a phased cut to the country's online gambling tax, telling public broadcaster ERR on August 25, 2026 that further reductions make no sense if they are not bringing in extra revenue.
The tax on licensed remote gambling operators is being lowered in half-percentage-point annual steps from 6% to 4% under a law the Riigikogu passed in December 2025 as part of the Reform-Eesti 200 coalition budget deal. The stated goal was to encourage more online casinos to register in Estonia and, over time, lift the state's overall tax take.
Michal said the opposite has happened: the budget has recorded several million euros of lost gambling-tax revenue instead of a gain.
"Certainly this debate will happen," Michal said on the programme "Stuudios on peaminister," adding that his first principle is that culture and sport funding, which the gambling tax helps finance, 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."
Two problems are feeding the pressure. A drafting error in the original December 2025 law briefly wiped out the gambling tax altogether at the start of 2026: parliament had to pass a correction in February, and licensed operators were asked to make voluntary payments to cover the gap in the meantime, according to ERR's reporting on the episode at the time.
Separately, the tax cut itself has not produced the wave of new licensees its backers promised. Evelyn Liivamägi, deputy secretary general for financial and tax policy at Estonia's Ministry of Finance, told ERR in June that only two licence applications had been submitted since the policy took effect, and neither was expected to be operating before the end of 2026 or early 2027.
Michal acknowledged that the reduction has been in force for too short a time to draw firm conclusions, but said his cabinet needs to work out in the coming weeks why gambling-tax receipts have fallen and whether continuing to lower the rate remains fiscally responsible. "If tax revenue does not increase, there is no point in continuing with further tax reductions," he said.
The cut was championed by Eesti 200, the junior coalition partner, and steered through parliament by the party's MP Tanel Tein, who has defended it publicly.
Tein told ERR in June that licensing can take six to ten months and that the policy should be judged over several years rather than one, pointing to Finland's forthcoming regulated online casino market as a reason for Estonia to hold its nerve on a lower rate.
Kilvar Kessler, the former head of Estonia's Financial Supervision and Resolution Authority, has taken the opposite view, warning in a recent opinion piece that opening the door wider to online casino operators needs a strong regulatory guard.
The dispute now moves into Estonia's 2027 budget negotiations, which opened this week between Reform and Eesti 200. Whether the tax keeps falling to 4% as scheduled, or Michal's government pauses or reverses the phase-in, will depend on the cabinet review the prime minister has promised in the coming weeks.
