Estonia Has Initiated a Comprehensive Reform of Its Gambling Legislation

Estonia’s government has commenced a comprehensive reform of gambling legislation. A bill has been submitted to Parliament that, upon approval, will allow the state to compete with premier international gaming hubs such as Malta and Gibraltar.

Expert Opinion on the Draft Law

Estonia’s economy is already regarded as one of the most digitised globally. If the new government initiative passes, the local online gambling sector will gain a solid technological basis for sustainable development.

Margus Reiland, WIDEN’s Attorney at Law, stated that the country is steadily progressing toward becoming a more appealing and competitive jurisdiction for casino business owners. The project under discussion in Parliament is the most substantial overhaul of the national gambling regulations in the past 15 years.

Core Provisions of the Bill

The most anticipated legislative updates include:

• a minimum tenfold increase in noncompliance penalties;
• a reduction in the fiscal rate applicable to all iGaming formats;
• a revision of the definitions of remote and additional content;
• the introduction of obligatory annual audits of financial statements;
• clarification of the requirements pertaining to anti-money laundering programmes;
• the transfer of all licensing authorities to the Estonian Tax and Customs Board;
• the tightening of regulations governing land-based casino venues situated near youth institutions.

Another key point outlined in the document is the expansion of certified firms’ powers to offer ancillary services, including IT, accounting, and other solutions within a single group of companies.

Mr Reiland highlighted that the reform is intended to modernise the obsolete framework, improve industry supervision, and notably elevate the transparency and reliability of regulation. The proposed measures are likely to motivate licensed brands to expand their operations within Estonia instead of pursuing more favourable conditions elsewhere.

The timeline for implementing the proposal remains uncertain, as the bill is presently under review by Parliament. Specialists believe there is a high probability of adoption. Considering the stability of the government coalition, the project is anticipated to be approved soon.

Initiative’s Impact on the Country’s Tax System

The draft law, promoted by MPs from the Eesti 200 and Reform Party factions, proposes gradually reducing the fiscal burden on remote entertainment services by 0.5% annually. The rate is projected to reach 4% by 2029.

Mr Reiland explains that this measure aims to bolster the country’s standing in the global gambling arena. Casino operators support this approach, seeing it as a political acknowledgement of the existing regulatory issues.

Although the industry representatives responded positively, the decrease clause has ignited extensive debate among parliamentarians. The key challenge is whether the project will deliver real economic advantages or will solely benefit commercial market participants. Keskerakond’s members are among the most outspoken opponents, arguing that the draft law is just a form of lobbying and will not produce meaningful, favourable outcomes.

On the contrary, the initiative’s proponents regard it as a strategic advancement. Tim Heath, Yolo Group’s Founder, mentioned that a year prior, Parliament contemplated an increase in the tax rate. The recent drastic shift in direction involved considerable bravery and decisiveness.

This change indicates that the government is now more closely aligned with the sphere and possesses a more profound understanding of its needs. The specialist believes that lowering barriers will attract more operators to the country, thereby drawing in new investments, generating additional employment opportunities, and boosting state income.

Estonia’s Competitive Edge: Digitalisation

The advantages of the national regulatory programme go well beyond financial incentives. Even in the absence of new legislation, the procedure for acquiring and renewing local certificates remains comparatively swift and is not encumbered by unnecessary bureaucratic formalities.

To greatly enhance public confidence in authorities, the state has established:

• a sophisticated IT infrastructure;
• strict cybersecurity standards;
• an efficient AML system.

Mr Reiland noted that Estonia has consistently been a dependable and promising jurisdiction. However, it has not garnered the global recognition it potentially could have achieved under the new framework.

A key sign of the country’s digital advancement is X-Road, a national information-sharing system that connects both public and private databases. This innovative solution streamlines most management processes and is effectively utilised to oversee the entertainment sphere and interact with licensees.

The service facilitates data exchange between:

• healthcare entities;
• government authorities;
• representatives of the commercial sector.

This technological basis provides a substantial competitive edge for the country within the international online gambling arena. The subsequent step to draw in new investment will involve permitting the use of cryptocurrencies as a payment method for entertainment services. This provision is also incorporated into the bill.

Decentralised Wallets and EU Compliance

In recent years, numerous European countries have considerably tightened their policies pertaining to virtual tokens. Estonia, however, has adopted a different approach by recognising digital assets as an authorised settlement method, thereby enabling casino operators to offer cryptocurrency wagers alongside conventional fiat options.

The main condition is rigorous adherence to legal standards, such as:

• carrying out regular, comprehensive fiscal audits;
• offering customers a broader selection of self-regulatory tools;
• implementing top AML and KYC norms for blockchain transactions.

Digital Expertise and Predictability

Some market participants remain cautious regarding the new government reform, citing last year’s attempt to elevate gaming taxes, which was swiftly withdrawn. They claim that these kinds of changes fuel perceptions of political uncertainty.

Mr Reiland believes the situation is not distressing. His main thoughts:

1. Stability. Estonia has maintained a consistent legal framework for years. The latest significant shifts mainly involved the digital modernisation of the system itself. If the bill passes, it will further reinforce the current regulatory model.
2. Development and security. Combining stability with a robust online infrastructure could be key to drawing in new operators to the country. The draft law also includes plans to expand HAMPI, the national self-exclusion registry.
3. Potential amendments. Several options for updating the programme have been considered, though the most recent version seems quite moderate. However, the specialist believes that HAMPI’s provisions will be revisited soon, as they no longer match actual industry demands.

Furthermore, Mr Heath pointed out that the forthcoming changes establish a foundation for a safer and more equitable entertainment sector. He is confident that customers will likely place greater trust in the strong security system.

Estonia’s Project as a Benchmark for Other EU Jurisdictions

Should the authorities successfully implement the initiative, it may serve as a precedent for gambling regulation across the European Union. Mr Reiland believes that Estonia’s achievements may establish a new benchmark for the EU. He anticipates that, once the framework proves effective, it will underpin the reorganisation of legal models in numerous regional jurisdictions.

The reform represents a shift from rigorous restraints and bans toward a safer, more resilient IT environment for business support and data exchange. Such an approach highlights the state’s dedication to advancing technology, ensuring transparency, and maintaining a balance between client security and sphere growth.

Mr Reiland noted that once the bill is passed, the Ministry of Finance will introduce a supplementary package addressing remaining nuances, including meticulous instructions on cryptocurrency usage and HAMPI's broadened capabilities. Mr Heath also mentioned that the draft law demonstrates how small, yet technologically developed, nations can influence the global industry.

The Main Things About Estonia’s New iGaming Legislation

The expert community unanimously agrees that the proposed initiative demonstrates the reliability, stability, and sustainability of Estonia’s economic ecosystem. If ratified in its current form, the project is expected to bring substantial profits to cover its expenditures in the forthcoming years.

Here are the core insights outlined in the article:

• The most anticipated legislative modifications include augmented penalties for noncompliance, a lowered tax rate, revised definitions, obligatory annual audits, and clarified requirements, among other aspects.
• The timeline for the implementation of the draft law remains uncertain. However, industry specialists believe there is a high probability of its adoption.
• The initiative’s proponents regard it as a strategic step forward, indicating that the government is now better aligned with the sphere and has a more profound understanding of its needs.
• Estonia benefits from a modern IT infrastructure, strict cybersecurity standards, and an efficient AML system, thereby substantially boosting public confidence in the authorities.
• The jurisdiction recognises digital assets as an accepted payment method, enabling casino operators to offer cryptocurrency bets alongside conventional fiat options.