Estonia is moving to correct a legislative error that would have removed online casino taxation from 2026, after officials confirmed a drafting mistake accidentally exempted digital casino operators from the country’s gambling tax framework.
The government is preparing an urgent amendment to reinstate the levy, saying the exemption was never policy and risks creating a significant hole in state revenues if left uncorrected.
Drafting error triggers political response
The issue emerged during a review of amendments linked to Estonia’s wider tax reform package. A technical wording change unintentionally removed online casino activities from the scope of taxable gambling, effectively setting the rate at zero from January 2026.
Officials have acknowledged the mistake and said the exemption does not reflect the government’s intent. The Ministry of Finance has confirmed work is underway to restore the tax through corrective legislation, which will be fast tracked through parliament. Lawmakers across the coalition and opposition parties have signaled support for closing the loophole, framing the situation as an administrative error rather than a policy dispute.
Estonian authorities have been careful to stress that no policy decision was made to reduce or abolish online casino tax. The planned amendment is being positioned as a technical correction to restore the status quo and protect budget forecasts.
The government has not indicated any intention to adjust the rate itself as part of the fix. The focus is on reinstating the existing structure rather than reopening broader debates around gambling taxation. This approach is designed to limit disruption to operators and avoid uncertainty in licensing and compliance planning ahead of 2026.
Online casinos briefly faced tax-free status
Under the current framework, Estonia taxes online casino gross gaming revenue at 6 percent. The drafting error would have removed this obligation entirely, leaving only land based gambling products subject to taxation.
The prospect of a zero rate immediately raised concerns inside the government over lost revenue and regulatory imbalance. Estonia’s online casino sector is well established and generates a significant share of licensed gambling turnover, making the exemption financially and politically untenable.
Officials moved quickly once the issue was identified, with the Finance Ministry warning that failure to act would distort competition between digital and land based operators.
Industry watches closely as timeline tightens
Licensed operators are monitoring the process, with most expecting the amendment to pass without resistance. The brief appearance of a tax exemption created short term speculation but little expectation that it would survive parliamentary scrutiny.
Estonia is regarded as a stable regulatory jurisdiction, and industry groups have privately indicated they see the episode as an anomaly rather than a signal of shifting policy. The timing remains tight, however. The corrective bill needs to clear legislative stages in time to avoid ambiguity in the 2026 tax framework.
Part of broader tax reform landscape
The error occurred against the backdrop of a wider package of tax changes aimed at strengthening state finances. Gambling taxation was not a central target of the reform, which has focused more heavily on consumption and income measures.
That context has helped reinforce the government’s position that the online casino exemption was accidental. Officials have said there is no strategic rationale for carving out digital gambling from the tax base while maintaining levies on other forms of gaming.
The amendment is expected to be introduced in the coming weeks, with parliamentary approval anticipated well before the end of the legislative session.
Regulatory credibility on the line
For Estonia’s gambling regulator, closing the loophole is also a matter of credibility. Allowing online casinos to operate tax free would undermine the consistency of the licensing regime and raise questions about regulatory oversight.
By acting quickly, the government is seeking to reassure both operators and the public that the framework remains intact and that drafting errors will not be allowed to reshape policy by default. Once passed, the amendment will formally restore online casinos to the tax net from 2026, closing the door on what was a brief but high impact legislative misstep.
