Estonia is on the verge of becoming a new iGaming haven after its government voted to reduce its remote gambling tax to 4% from 6%. The rate will go down 0.5% every year until 2029 after it passed by a vote of 51-31 in the Riigikogu.
It’s a significant reversal of a previous plan to hike up the tax to 7% and will position the Baltic nation to challenge existing territories, such as the Isle Of Man, Gibraltar, and Malta, for international investment. The bill will also allow lawmakers to fight illegal gambling activity, increase sanctioning power on illegal operators and freeze operator accounts, issues that have been plaguing Estonia in recent times.
A drafter of the new bill and member for the Reform Party, Madis Timpson, highlighted the economic potential of the move. He said: “A remote gambling paradise is indeed what we could become. The idea would be that those foreign firms which are currently operating somewhere with their place of business officially registered in, for instance, Malta, would come to Estonia. Those people who are playing somewhere, I don’t know, in France, in Spain, their profits would come to us.”
The move has attracted some criticisms, though. Matis Mäeker, head of the Financial Intelligence Unit, voiced his concerns ahead of the vote that it could risk the country’s reputation. He said: “Billions and billions are flowing through some system we do not actually see here in Estonia. We do not know who enters or exits it, but we know that money is moving through it. The reputational damage to the Estonian state will fall on us, because the service provider will claim to be an Estonian service provider.”
Estonia sports infrastructure in political focus
Supporters of the reform have argued that increased international investment and a broader tax base could strengthen Estonia’s public finances over time, creating greater fiscal flexibility for large-scale projects.
Among the areas highlighted by lawmakers is the country’s aging sports infrastructure. Tanel Tein, a former professional basketball player and current member of parliament who helped initiate the bill, has previously pointed to the need for renewed investment in national sporting facilities.
The Estonian Olympic Committee (EOK) is understood to be exploring potential sites for a new 10,000-seat indoor arena capable of hosting major sporting events and concerts. No formal funding commitments have been announced.
Political tension behind the bill passing
There were some strong words exchanged as a result of the bill passing. Former finance minister Mart Võrklaev alleged Tein had threatened to implode the coalition in Estonia if the bill hadn’t gotten through parliament.
He told reporters: “Tein clearly said that if this bill does not progress, there will be no coalition. I do not consider the use of a political suicide vest appropriate in government.”
Prime Minister Kristen Michal denied those accusations, claiming the deal was “part of a broader strategy to modernize the Estonian economy.”
The reform underscores a calculated trade-off for Estonia, as lawmakers seek to attract international gambling operators and investment while managing heightened anti-money-laundering and reputational risks flagged by regulators.
Industry turbulence
The tax reform is being debated against a backdrop of disruption within Estonia’s gambling sector.
Yolo Entertainment disclosed last week that up to 280 roles in Estonia could be affected as the company reshapes its business. The group is streamlining its operations around a single regulated platform, Yolo.com, while accelerating expansion plans across licensed markets in the Middle East, Canada, and parts of Northern Europe.
Responsibility for steering the legislation now sits with the Riigikogu’s finance committee, which will examine the bill in detail. Opposition lawmakers are expected to challenge elements of the proposal before it is brought forward for a full parliamentary vote.
References
- iGaming Expert: https://igamingexpert.com/features/estonia-igaming-transformation/
- SBC News: https://sbcnews.co.uk/europe/2025/12/08/estonia-gambling-tax/
- Sigma: https://sigma.world/news/estonia-lowers-online-gambling-tax-4-percent/
