Poker Writer
Estonia’s government is looking to correct an inadvertent mistake in the new year’s amendments that left online gambling untaxed in 2026. Lawmakers approved a new amendment to the Gambling Tax Act intended to adjust the tax on online gambling, but a wording change left it untaxed.
The wording issue arose because the clause taxed only “skill games,” while leaving games of chance and remote gambling untaxed. The wording that specifies skill games allows for online gaming operators to argue that online casino-style games of chance fall outside of the tax line for the year.
Lack of Tax Revenue Hurts Culture and Sports
The lack of tax revenue is likely to hurt areas that rely heavily on gambling taxes. Estonia’s prime minister Kristen Michal vowed not to let cultural and sports funding suffer in the interim before the mistake is fixed. “My position is that culture and sports should not go without funding because of this.”
The mistake is expected to be quickly fixed in January or February whenever parliament can complete the procedures needed to make the fix.
Solutions in the Meantime
Lawmakers in Estonia have said it is too early to estimate the revenue loss from the error, but they are taking steps to mitigate it. It will take a few months to determine the cost of the error.
One suggestion is that gambling companies can consider direct donations to the Cultural Endowment of Estonia, with income tax applied. It would go to the state budget portion of the Cultural Endowment and follow the same logic as the gambling tax.
Another suggestion is to increase the tax rate of 5.5% when reinstated. Parliament member Aivar Kokk proposed the hike in tax rate:
Since the tax will essentially go unpaid for nearly two months, the rate could be increased to ensure the full €27 million is collected over the year. Whether the coalition supports that remains to be seen, but legally it’s the only proper option for making sure the tax is paid.
However, for that to happen, the Taxation Act requires 6 months’ notice for any tax changes. Many in parliament believe that a wait that long is not practical.
Estonia’s iGaming Haven Attempt
At the end of 2025, Estonia was set to drop the tax rate on online gambling from 6% to 4%. The reduction in the tax rate is intended to attract global operators and make Estonia a more significant player in the online gambling market.
The gambling tax reduction goes against the trend in the rest of Europe where most countries are raising the gambling tax rate.
Kokk’s proposal to increase the tax rate to make up for the lack of revenue would set this goal back for a few months at least.
