Hopes Pinned On Legalized Online Gambling To Rescue Estonian Gaming Revenues, by Ulrika Lomas, Tax-News.com, Brussels
Monday, January 11, 2010

From the beginning of 2010, online gambling is being licenced and taxed in Estonia in an effort to boost public finances through taxes on gaming operators.

For the first year, Estonians will be legally authorized to play only through domestic operators. The planned changes will come completely into force in 2011, when international gaming operators which satisfy the requirements set by the public authority will be allowed to apply for licences. Website operators will be required to pay a licencing fee and a 5% tax on gross revenues.

Gaming tax revenues are used to finance cultural activities, but the number of licenced gambling premises in Estonia has reduced drastically in the last 12 months from about 160 to less than 100, and gambling revenue fell to EEK300m (USD28m), EEK200m short of budgeted receipts, and certain cultural projects, such as the Estonian National Museum, are running into difficulties.

Estonia has suffered more than most eurozone countries from the economic crisis, and is seeking to adopt the Euro as its currency in the near future. There has been controversy as to whether the new gambling regulation laws comply with EU directives, but like several other EU countries, Estonia is proceeding with its own system of regulatory protection.