Drafting Error Leaves Estonian Online Casinos Untaxed

A drafting error in Estonia’s gambling tax law has led to an unexpected situation: online casinos were left without a tax obligation. According to estimates, the state budget could lose up to €27 million per year because of the mistake.

The issue was discovered on January 12 during a meeting of the Riigikogu’s Finance Committee, where lawmakers were discussing recent amendments to gambling taxation. The omission was noticed by a lawyer representing one of the gambling companies.

What Went Wrong

The updated version of the Gambling Tax Act no longer includes a provision that requires online casinos to pay gambling tax. The text refers only to games of skill, while online casinos fall under the legal definition of games of chance.

Before the changes, lawmakers planned to gradually reduce the tax rate for iGaming operators from 6% to 4% of revenue. However, in the current wording of the law, online gambling platforms are not mentioned at all. As a result, they are effectively excluded from taxation.

Expected Budget Losses

Until now, online casinos have contributed around €22 million per year to Estonia’s budget. Under the planned reform, tax revenue was expected to grow and reach approximately €30 million annually by 2028.

Because of the error, the potential loss is now estimated at around €27 million per year. For the time being, online casinos remain outside the tax framework until the law is corrected.

The Finance Committee is preparing an urgent fix, but the amendment still needs to move through parliament, which will take time.

Industry Reaction

Members of the Estonian Gambling Operators Association (EGOA) have stated that they are ready to pay the tax rate originally предусмотренный by lawmakers. According to the association, licensed operators will immediately begin paying a 5.5% tax introduced by the amendment, without waiting for the formal adoption of the corrected law.

The Ministry of Finance and the Finance Committee have confirmed that the situation will be fixed as soon as possible.

A Moderate Approach

Compared with recent gambling tax changes in countries such as the United Kingdom, Estonia’s proposed rate remains relatively moderate. The reform has not triggered serious criticism from the industry or warnings about risks to the market.

The situation highlights how a small drafting error can lead to major budget losses.