Estonia to Gradually Cut Online Gambling Tax Rate to 4%

Estonia has approved a landmark plan to reduce its online gambling tax rate—an unprecedented pivot.

The government will gradually cut the tax rate from 6% to 4% by 2028, aiming to lure international operators and boost funding for sports and culture.

From my perspective as a gambling-industry analyst, this move signals that jurisdictions are prepared to use tax strategy, not just regulation, to become global iGaming hubs.

Read on to discover how the reform works, what the criticisms are, and what operators should watch moving forward.

Key Points

• Estonia will reduce the remote gambling tax rate by 0.5 percentage points annually, reaching 4% by 2028. SBC EURASIA+1
• The current rate stands at 6% of net bets (as of 2024) on remote gambling in Estonia. emta.ee+1
• The reform reverses earlier plans to raise the rate to 7%. iclg.com
• Estimated current annual tax revenue from remote gambling is around €22 million, with a target of €30 million by 2028. eestifirma.ee+1
• Changes include new funds: one for sports infrastructure and one for culture/private-sector matching donations. SBC EURASIA+1
• Critics warn that the assumption of operator influx may be overly optimistic and may leave gaps in public finances.

Estonia Slashes Online Gambling Tax to 4% by 2028 — A Bold Move to Win Global iGaming

In the rapidly evolving world of online gaming, jurisdictions are not only competing on regulation but also on tax environment. Estonia’s decision to gradually reduce its remote gambling tax rate from 6% to 4% by 2028 marks a strategic shift. In this piece I offer my analytical take—friendly but firmly professional—on what this means for operators, regulators and the Baltic region.

What’s Changing

The Estonian Tax and Customs Board lists the current tax for remote gambling (games of chance) at 6% of the amount received from bets, less prizes. emta.ee+1 Under the new coalition government’s roadmap, the rate will be cut by 0.5 percentage points each year until it hits 4%. SBC EURASIA+1 Earlier in 2024 the rate had been raised from 5% to 6%, so the pivot is significant. SBC News+1

Officials expect that lowering the tax will incentivize more operators to base operations in Estonia, thereby expanding the taxable base and generating around €30 million by 2028. SBC News A dedicated sports infrastructure fund and a matching-donation cultural fund support this vision. SBC EURASIA

Why It Matters

From my vantage, four key insights stand out:

• Competition for licensed operators intensifies. Estonia is positioning itself as a “remote gambling hub,” with lower tax burdens and EU-based regulatory credentials. eestifirma.ee
• Balanced revenue model. Rather than rely on high tax percentages, Estonia is betting on volume and licensing growth to offset lower rates.
• Regulatory credibility remains central. Changing tax strategy doesn’t mean looser rules. Estonia retains strong AML-CFT regimes and player-protection frameworks.
• Risk of assumptions. The strategy relies on operator migration and revenue growth. As critics point out, prior attempts at raising tax did not deter entry, but growth was modest.

Critiques and Caveats

One of the loudest voices opposing the scheme is former finance minister Mart Võrklaev. He flags the assumption that lowering tax will automatically attract a large influx of operators as “built on shaky ground.” eestifirma.ee The earlier nine-operator entry after a tax rise generated only around €4 million additional revenue.

In addition, lowering tax rates reduces margin for states if operator growth does not materialize. The proposed timeline to 2028 also means near-term revenue may drop unless offset by growth.

Recommendations for Operators

From my professional lens:

• If you’re an online gambling operator, evaluate Estonia now: the lower tax, EU-jurisdiction licence and digital ecosystem make it attractive.
• But don’t assume entry is easy: you still must meet regulatory standards, player-protection requirements and local compliance.
• Monitor milestones and triggers: The annual 0.5% cuts are contingent on revenue benchmarks, so stay alert to changes.
• Watch public-fund deployment: The new sports/culture funds tie operator success to broader national strategy, meaning potential shifting regulation.

My Analytical View

In my opinion, this move by Estonia reflects the broader trend: regulated markets are increasingly using tax policy as a competitive tool. Tax rates no longer just finance states—they attract investment. But attractive rates alone don’t guarantee success. For Estonia, success depends on delivering licensing clarity, operator welcome, tech infrastructure and regulatory robustness. The fact that Estonia pairs the tax cut with dedicated funds and strong regulatory guardrails gives it more credibility.

Estonia’s plan to drop the online gambling tax rate from 6% to 4% by 2028 is a decisive strategic move to capture global iGaming operators and grow the regulated sector. From my perspective as an industry professional, this signals that tax policy is as significant a competitive differentiator as regulation. Operators and investors should watch Estonia closely—and other jurisdictions should take note: in the modern era of online gaming, taxation, regulation and market positioning go hand in hand.

Tags: EstoniaGamblingTax, iGamingEstonia, OnlineCasinoTax, RemoteGamblingReform, EstonianRegulation