Gambling Tax in Estonia – Reason Behind the Suggested Changes
July 21, 2023 Tony ChristopherThe gambling tax in Estonia for online operators is about to change. Alongside this are multiple other suggestions for improving the country’s iGaming industry supported by solid reasons. It is considered that the upgrades will improve the gambling market for all participants. Read on to learn more about the suggested changes.
Besides increased gambling taxes for online operators, the Gambling Tax Council and the industry representatives discuss more changes. We will mention a few of them in this blog post and answer some of the essential questions on the matter.
What Are the Suggested Changes in the Gambling Tax in Estonia?
During the last months, the Estonian gambling taxes have been the focus of discussion. On 26 April 2023, the Ministry of Finance of Estonia published on its website a “draft law” focused on increasement of gambling taxes for online operators.
The increase in gambling taxes is suggested because the Estonian Tax and Customs Board (EMTA) constantly reports growing revenue of online gambling sites. The draft of the Tax Laws Amendment Act is calculated according to the performance of the online casinos for Estonian players and will not affect the gamblers.
Reasons Behind Innovations in the Gambling Tax Law in Estonia
Estonia is one of the countries in the world with the lowest gambling tax rates and skyrocketing online casino revenue. For example, the difference between the operator’s revenue in 2020 and 2022 is almost €210 million (reported by the Estonian Tax and Customs Board).
| 🎲 Gambling | 💸 New Tax Rate |
|---|---|
| 🎰 Online Casino | 🚀 From 5% to 6% (2024) and up to 7% (until 2026) |
| ♠️ Gaming Tables | 🚀 Rise to 10% |
| 🎱 Lottery Tax (for Players) | 🚀 From 18% to 22% |
The Gambling Tax Council suggests this change of the Estonian Gambling Act only applies to gambling operators licenced in the country. The new PM Kaja Kallas supports the innovations in the Estonian Tax Laws Amendment Act, but the decision is yet to be taken. Even if the gambling tax rate rises, Estonia will remain one of the most attractive markets and stay on the low levels of taxes for players and operators.
Furthermore, there are suggestions for remaking the advertisement laws related to gambling and casinos. This is not directly related to the gambling tax law in Estonia, but both innovations can improve the gambling industry in the country.
What Will Happen if Estonian Gambling Taxes Increase?
The Estonian Tax and Customs Board (EMTA) and the operators do their best to find answers to this question. So far, there are a few ways the increased gambling tax will affect operators, players, and Estonian citizens.
Licensed Online Operators in Estonia
The innovations in the gaming industry and especially serious matters like increasing the gambling tax in Estonia is discussed with the industry representatives of the Estonian Gaming Operator Association (EHKL). The 14 domestic and 15 offshore operators will have their say on the matter and also support raising the standards in the industry.
The industry representatives opposed the suggested changes, but as always, everything is up for debate. Another topic yet to be discussed is the correlation between casino operators and sports stakeholders. The decisions on all those and related matters are yet to be taken and announced.
Regardless of what changes come into power, a brief downturn of the online gambling market is expected. As practices in other countries show, iGaming is a flexible industry that quickly recovers, adapts, and overcomes any situation.
Estonian Gamblers & Players
The Gambling Tax Council also considers how the new gambling taxes affect players. Despite the idea of minor tax enlargement for winners, the gambling market will still be one of the most appealing compared to other countries worldwide.
Estonian Tax Laws Amendment Act will include the tax-free amount of €700 per month for Estonian citizen, tax exemptions on pensions, other benefits for the society. If this is an interesting topic, check our informative blog articles. The posts cover even more aspects of online gambling including changes in regulations in other countries.
FAQ
The news about suggested reforms to the gambling tax in Estonia immediately drew attention. If you have not heard about it, check out the following answers to essential questions on the matter.
1️⃣ What changes in the Estonian gambling taxes are discussed?
One of the latest news in the iGaming world is the suggested change of the gambling tax in Estonia. The government plans to gradually increase the tax for online gambling operators during the next years. The suggested improvements are based on the constantly growing revenue from sports betting and gambling games.
2️⃣ Why does the Estonian government want to increase the gambling tax?
The Gambling Tax Council in Estonia and the rest of the government authorities responsible for legal gambling venues and games have many reasons to change the gambling tax. The main one is the constantly increasing revenue of online casinos reported to the Estonian Tax and Customs Board (EMTA).
3️⃣ What will happen if the Estonian gambling tax increases?
Every time the gambling tax law in Estonia changes, there is a momentary shock on the market before everything returns to normal. If the changes are approved, the online operators will pay higher gambling tax and assume more responsibilities. Government authorities and operators have predicted the possible effects and do their best to smooth out the transition.
4️⃣ Do licensed operators in Estonia pay gambling taxes?
The only way for domestic and offshore brands to offer gambling games in Estonia is after acquiring a gambling licence from the Estonian Tax and Customs Board (EMTA). Issuing gaming activity licences and the necessary operating permits also create responsibilities equal for all licensed online operators, and the first one is paying gambling taxes.
5️⃣ Are players going to be affected by the new gambling winnings taxes in Estonia?
The creators of Estonia's Tax Laws Amendment Act have also considered the social effect of the gambling tax increasing on Estonian players and citizens. The idea of a higher tax may disturb the gamblers for a minute, but the market will recover fast because other legal changes will benefit society.
