Prime Minister Kristen Michal Signals Potential Re-Evaluation as Projected Revenue Growth Fails to Materialize
Estonian Prime Minister Kristen Michal has indicated that the government will closely re-examine the online casino tax relief enacted earlier this year during upcoming state budget and strategy negotiations. Designed to attract foreign gambling operators to register locally and boost state revenues, the legislative amendment passed by the Riigikogu last December reduced the remote gambling tax rate from six percent to four percent over a two-year period.
However, instead of generating additional revenue, the policy has currently resulted in a multi-million-euro budget deficit, sparking intense debate among lawmakers and coalition partners.
Assessing Market Impact and Protecting Cultural Funding
Appearing on the television program “The Prime Minister is in the Studio,” Michal noted that because the tax reduction has been in effect for only a short period, it remains difficult to fully determine whether new operators are registering in Estonia or what has driven the overall decrease in gambling tax revenue. The government expects to review a comprehensive overview of these figures in the coming weeks.
Despite the uncertainty, the Prime Minister emphasized that future tax cuts are contingent upon actual revenue growth:
“If it does not bring additional revenue in the future and there is no forecast or outlook for it, then in that case there will definitely be no further reduction. But we can definitely negotiate that.”
Michal also stressed that cultural funding must remain protected, noting that the government has already stepped in to cover revenue gaps caused by previous legislative oversights and must ensure that cultural endowments do not suffer losses.
Growing Opposition and Initial Warnings
The tax break faced heavy skepticism from the outset. Critics, including the Ministry of Finance and several members of the ruling coalition—such as former Finance Minister Mart Võrklaev and Finance Committee Chairwoman Annely Akkermann—warned that lowering the tax rate would fail to incentivize operators while significantly depleting public coffers. Projections from the Ministry of Finance previously estimated that reduced gambling tax revenues would cost the state budget six million euros in 2026, scaling up to 13 million euros by 2029.
Opposition parties, including the Social Democrats, have aggressively called for the immediate repeal of the tax break before budget talks finalize. Lawmakers point out that the reduction is already draining millions from state funds allocated to Estonian culture, compounded by earlier legislative hiccups that required the Riigikogu to re-adopt the amended law.
