From 6% to 4%: What Estonian gambling tax cut means for operators

In a world where raising gambling taxes is seen as the only way to fight illegal gambling operators and boost revenues, especially across the European member states, Estonia decided not to play by the rules and go the opposite way. The country has approved a gradual reduction in the tax rate on online gambling from 6% to 4%. The rate will decrease by 0.5 percentage points each year until it reaches 4% in 2028.

This move has quickly turned sensational, drawing endorsements from many lawmakers and other industry-leading voices. Indeed, two studies made by Ernst & Young and PwC, leading global consultancy firms, show that overly aggressive taxation may offer temporary fiscal gain, but it carries a high risk of weaker revenues in the long term and widespread job cuts.

When rules become too strict and tax pressure mounts, the industry growth slows down and black market activity rises. The paradox is that what is meant to “fix” the market can instead force most of the legitimate operators to seek offshore alternatives and eventually bring the country's gambling revenue to its all-time minimum.

Estonia as a stable and innovation-friendly market

The country’s unique advantage has historically been its well-developed, innovation-friendly ecosystem for gambling operators: a transparent and 100% remote document submission procedure, E-residency program, strong access to banking, and a high level of trust for license holders among players and partners.

Unsurprisingly, getting the Estonia gaming license has long been attractive for gambling firms seeking a compliant launch in Europe, with the reduction from 6% to 4% now further cementing its reputation as a cost-effective, operator-friendly EU jurisdiction.

What does a 2% decrease in gambling tax mean for operators?

At first glance, a gradual tax reduction of 2% over several years does not seem transformative when compared to offshore jurisdictions like Anjouan or Tobique; the savings for operators are substantial.

Long before this move, Estonia already stood out for startups with its 0% corporate income tax on reinvested profits. For rapidly growing online betting, casino, and other operators, the only real fiscal burden was a 6% gross gaming revenue tax (GGR), which is now set to be cut by a third by 2028, effectively unlocking around 33% more savings.

In practice, this tax reduction means improved margins and strengthened financial resilience for gambling operators. For every €1 million in gross revenue, this equals an extra €20,000 that can go into product development, marketing, or other strategic initiatives.

Much more important is the government's overall message to iGaming operators, inviting them to “come out of the shadows” and operate legally under more favorable conditions, a shift that is likely to reshape local law enforcement practice.

Growing interest in Estonian licenses

The tax changes are designed to put Estonia alongside the most prestigious gambling jurisdictions, such as the Isle of Man and Malta. While the ambition is high, many companies have already found that operating under Estonia gambling license is highly favorable, as its advantages are hard to ignore.

Despite regulatory expectations in the country remaining one of the industry's highest, the jurisdiction's low tax burden and efficient licensing process make Estonia gaming license a good start for companies planning to operate in several European markets.

How to get Estonia gambling license?

As Estonia becomes a highly sought-after regulated hub for gambling operators, companies looking to meet its licensing thresholds, pass compliance audits, and create a future-proof business structure cannot afford to proceed without expert advice.

In this context, dedicated consultants such as those at Inteliumlaw make the application process way easier, providing hands-on support with obtaining a relevant gaming license, including the Estonian option. Combining a strong track record in gaming licensing and a know-how of regulatory expectations, such counsel can help operators get the most from the country's optimized tax regime and everything else it has to offer.