Estonia’s ruling coalition will deliver on its promise to reduce taxes on gambling income. The measure is seen as a strategic tool to attract foreign investment at a time when taxes are rising across all EU countries. Ministers see opportunities to compete with Malta as a technology hub for online gaming businesses.

A committee of ministers from the ruling Reform Party and the Eesti 200 party has begun work on the tax initiatives outlined in the Coalition Pact 2023–2028.

In June, the Reform Party and Eesti 200 published their coalition agreement, setting economic goals that include strengthening national security, reforming the social protection system, and accelerating the transition to climate neutrality.

The economic amendments confirmed an agreement to gradually revise the online gambling tax, lowering the rate by 0.5% annually until it reaches 4% by 2028.

Work on the draft tax bill has already begun under the leadership of Reform Party MP Madis Timpson, Chairman of the Legal Affairs Committee. Timpson has become the main advocate of lowering the tax on remote gambling, presenting it as an opportunity to attract new foreign-licensed operators to Estonia.

“We could indeed become a paradise for online gambling. People who are playing somewhere, I don’t know, in France or in Spain – their profits could be coming to us,” Timpson said, pointing to operators currently registered in Malta and other EU jurisdictions.

Timpson also linked the reform to the government’s cultural agenda, noting the importance of national infrastructure projects. The coalition pact provides for the creation of a dedicated national sports infrastructure fund in partnership with the Estonian Olympic Committee, as well as a private co-financing mechanism.

A second fund will allocate 20% of new gambling tax revenues to matched donations, with the financing model split between the state (one-third) and corporate sponsors (two-thirds).

“We have long been talking about this famous large [sports] hall that could be built, but we keep just discussing it. Every euro we manage to attract to fund this hall is, in my opinion, a good deed for athletes and cultural figures,” Timpson added.

However, the procedure requires that parliament introduce a separate bill on gambling taxes, which cannot be passed as part of the state budget. Parliament considers this process necessary to ensure full transparency and accountability, given the sensitivity of gambling revenues and their distribution.

The opposition, however, is pushing back against the initiative, especially the Centre Party. Deputy Chair of the Finance Committee, Andrei Korobeinik, expressed doubts that tax cuts would bring the promised investments. He believes that international operators value economic stability and predictability more than small reductions in tax rates.

“The authors of the bill believed the lobbyists who promised that if the tax rate is lowered, casinos and online operators will come here. But no analysis has been carried out,” Korobeinik said.

Source

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