Estonia is expediting a review of its recent tax reduction for online gambling due to increasing budgetary pressures that have raised concerns about the effectiveness of the lower rate in attracting new market participants. Prime Minister Kristen Michal emphasized the importance of ensuring that cultural funding is not compromised by these financial adjustments, stating, "Certainly this debate will happen. The first clear principle I stated is that culture must not lose out. We have already compensated the missing funds caused by this legislative mistake, and we must find the rest as well so that culture does not suffer."
On August 28, 2026, Michal directed the Riigikogu to reassess the tax reduction. In December 2025, the tax on licensed online gambling revenue was cut from 6% to 4%, with an initial review scheduled for 2028. This reduction was intended to entice international iGaming operators and expand the tax base. However, by June 2026, the Finance Ministry reported that no new online casinos had entered the market since the cut, and only two license applications were pending.
With the 2027 Budget preparations underway, the Finance Ministry projected a €6 million decrease in gambling tax revenues for 2026, which could potentially escalate to €13 million by 2029 if adequate investment fails to materialize in the sector. Michal remarked, "If tax revenue does not increase, there is no point in continuing with further tax reductions." The tax cut, introduced by the political party Eesti 200 to attract international operators and enhance funding for cultural and sporting initiatives, is now under scrutiny due to a lack of significant outcomes, amplifying calls for a policy reevaluation.
