In a strategic move poised to redefine the landscape of remote gambling taxation, Estonia is gearing up for a significant overhaul by 2028. This initiative springs from the ambitious reforms outlined in the coalition pact inked between the ruling Reform Party and its main ally, Eesti 200. Since ascending to power in 2023 under the leadership of Prime Minister Kaja Kallas, this coalition has championed a broad spectrum of national priorities, including bolstering national security, revamping social protections, and spearheading efforts toward climate neutrality.

Amid these sweeping reforms, gambling taxation emerges as a critical fiscal focus. The government is set to revisit its 2024 tax agreement which recalibrated remote gambling taxes within the Excise Duty Act’s framework. This adjustment was pivotal in aligning Estonia’s tax structure with broader EU compliance norms, marking a significant step towards regulatory harmonization across the continent.

The 2024 reform introduced an uptick in Remote Gambling Tax on games of chance from 5% to 6% of net bets. Concurrently, there were analogous increases across other categories: Game of C

hance Tournament Tax, Toto Tax, and notably, Lottery Tax—which saw a sharp rise from 18% to 22% on ticket sales.

In an intriguing development revealed through various publications, the Estonian government has committed to “initiating amendments to the Remote Gambling Tax Act in parliament.” The objective? To unlock additional funding avenues for sports and culture by gradually reducing the annual tax rate by 0.5%, aiming for a target rate of 4% by 2028.

This legislative maneuver will pave the way for establishing a ‘dedicated national fund’ designed to fuel significant sports infrastructure projects. By leveraging proceeds from online gambling, this fund aims to prioritize investments in line with directives set forth by the Estonian Olympic Committee—ensuring that financial injections are directed towards nationally significant venues.

Moreover, a secondary fund is set to be launched with an eye on catalyzing private-sector co-financing for cultural and sporting initiatives. Herein lies an innovative approach: earmarking 20% of new gambling tax revenues for matched donations based on a model where one-third financial support comes from state coffers and two-thirds from corporate sponsors. Eligibility is strictly confined to non-profits recognized as tax-exempt entities.

To further enrich this policy landscape, Prime Minister Kallas previously intervened in 2024 with stringent advertising laws aimed at minimizing gambling’s public visibility. These measures introduced comprehensive bans on celebrity endorsements and “risk-free” bets while restricting marketing efforts targeting underage audiences—a mandate enforced by Estonia’s Consumer Protection and Technical Regulatory Authority (TTJA).

As Estonia embarks on soliciting feedback regarding this new tax framework for its gambling sector at the outset of this year—as detailed by the Ministry of Finance—it stands firm on maintaining strictures around advertising limitations upheld by the Reform Party.

Through these multifaceted initiatives, Estonia’s liberal coalition envisions repositioning its gambling industry not merely as a revenue stream for government coffers but as a vital contributor to public welfare—a strategic bet that underscores their commitment to balancing commercial viability with societal well-being.