Estonia plans to revise its gambling tax system by 2028 as part of reforms outlined in the new coalition agreement between the ruling Reform Party and its main coalition partner, Eesti 200.
The coalition, which has been in power since 2023, will begin implementing reforms in 2025 aimed at strengthening national security, reforming social protection, and accelerating the transition to climate neutrality.
Gambling policy is a key part of the fiscal reform agenda. The coalition intends to revise the 2024 tax agreement, under which online gambling taxes were reclassified under the Excise Duty Act, aligning the country’s legal framework with EU standards.
As part of the 2024 reform, the tax on online games of chance was raised from 5% to 6% of net bets, alongside similar increases in the tax on gambling tournaments, tote betting, and lottery tax—the latter rising from 18% to 22% of ticket sales.
“We will initiate amendments to the Online Gambling Tax Act in Parliament to secure additional funding for sports and culture. The annual tax rate will be reduced by 0.5% each year, reaching 4% by 2028,” the government stated.
A special national fund will also be created to finance major sports infrastructure projects using proceeds from online gambling. Projects will be selected in line with the priorities set by the Estonian Olympic Committee to ensure that the funding supports venues of national importance.
“Amendments to the Online Gambling Tax Act will be initiated in Parliament to secure additional funding for sport and culture,” the agreement reads.
A second fund will be established to encourage private investment in culture and sports. 20% of additional gambling tax revenues will be allocated to this fund. A co-financing model will be used: one-third from the state and two-thirds from corporate sponsors. Only registered tax-exempt non-profit organizations will be eligible for support.
“To attract private investment in the cultural and sports sectors, we will create a private co-financing fund by amending the Gambling Tax Act and allocate 20% of the additional revenue to it.
Funding will be distributed according to a model where one-third comes from the state and two-thirds from companies. Support will be provided to organizations listed as tax-exempt non-profit entities,” the statement reads.
This reform initiative builds on the policy started in 2024 by the government of Kaja Kallas (before her appointment as an MEP in summer 2024 and later as the EU High Representative for Foreign Affairs and Security Policy – ed.), when strict restrictions on gambling advertising were introduced. These included a ban on celebrity endorsements, “risk-free” bet promotions, and advertising targeting minors. Enforcement was assigned to Estonia’s Consumer Protection and Technical Regulatory Authority (TTJA).
At the beginning of the year, the Estonian Ministry of Finance also announced plans to gather feedback on a new tax model for the gambling sector. However, the Reform Party has stated it will not consider relaxing the advertising restrictions.
The liberal coalition is betting that the gambling industry can remain commercially viable while contributing to public benefit – not just to the state budget.
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