Estonia’s attempt to compete for online gambling operators is still in its early phase. The country has started reducing the tax rate on remote gambling from 6% to 4% in stages, after legislative changes passed by the Riigikogu late last year.
The policy was designed to make Estonia a stronger base for foreign online casinos. So far, the response has been limited.
Licence Pipeline Stays Narrow
Evelyn Liivamägi, the deputy secretary general for financial and tax policy in the Ministry of Finance, confirmed that there are two licence applications currently under review. Neither of these is anticipated to result in operations before the end of 2026 or the beginning of 2027.
One other applicant has since pulled out of the process. This leaves the reform without the quick market response its supporters had expected.
Tax Cut Meets Approval Delays
Tanel Tein, the Eesti 200 politician who introduced the legislation, said the initial slow response does not mean the policy has failed. He stated that licensing requires time since it can take six months, sometimes even close to ten months.
Timing also matters for operators. Lower tax rates may come in handy, but they lose significance when there are issues with the licensing process.
Early tax figures do not say much yet. Estonia collected €815,000 in gambling tax in January and €1.12 million in February. A €220,000 gap tied to the Cultural Endowment was later filled through an extra budget transfer.
The episode drew attention to the tax rules, but it did not bring a quick rise in licence applications.
Finland Adds Pressure Next Door
Finland is now part of the same discussion. Its licensed gambling market is due to open in 2027, and Estonia may have to compete harder for operators that already know the region.
Tein said Estonia should not assume those companies will stay if Finland offers better terms. If operators move north, Estonia could lose future tax revenue and some of its appeal as a licensing base.
He also said the reform is not aimed at growing the land-based casino sector. Online operators still face checks and extra compliance rules. There is also a requirement to appoint a local contact person. The goal, according to Tein, is to keep remote gambling activity inside Estonia’s tax system while funding sport and culture.
Applications Will Set the Pace
The next signal will come from the two pending licence files. Estonia has already changed the tax line, but no new operator has gone live under the reform yet.
That puts the policy in a waiting period. If approvals move through and operators launch, the lower rate may start to help Estonia’s position. If the process drags on, the tax cut alone will not be enough to shift the market before Finland opens its own system.
