Minister of Foreign Affairs Margus Tsahkna (Eesti 200) said the goal is to increase gambling tax revenue for the state. "The current plan is that while about €22 million is collected at the moment, if everything works and the forecasts hold, this could grow to €30 million by 2028," Tsahkna said.

"This money will go entirely to culture and sports. Hopefully, this will ease the pressure of the annual negotiations over how much direct support can be allocated from the state budget to culture and sports, as this would create a mechanism and actual revenue on a larger scale," he added.

Under the bill, the gambling tax rate for online casinos would be gradually reduced from the current 6 percent to 4 percent.

Reform Party's Mart Võrklaev critical

Former finance minister and Reform Party member Mart Võrklaev told Eesti Ekspress in an interview that the planned reduction of the remote gambling tax should be scrapped or postponed, as it does not benefit the public. "We've raised a number of taxes. We decided to raise the gambling tax in 2023. And now, at the suggestion of one Eesti 200 MP, it's being lowered," Võrklaev said.

"The Ministry of Finance's forecast shows that this tax cut will cost us €6 million in 2026, €8 million in 2027 and €10 million in 2028. The new scheme is based on the assumption that lowering the tax will bring a large number of gambling operators to Estonia. But after we decided to raise the tax in 2023, nine new operators still entered the market. That brought in €4 million per year. The forecast expecting a massive influx of gambling operators is built on shaky ground," Võrklaev criticized.

According to Võrklaev, it is unprecedented how a representative of a narrow interest group was brought into coalition agreement negotiations. He also lamented that the current government does not listen to finance professionals.

Tsahkna: Võrklaev scoring political points

"I've worked alongside Võrklaev in government when he was finance minister. And to put it politely, there were a lot of doubts back then about various forecasts, which unfortunately later turned out to be true. We are basing our decisions on data that has been carefully considered and that's why the appropriate steps have been taken," Tsahkna said in response.

"First, we'll see whether these tax reduction measures actually lead to increased revenue. The reductions are being made in 0.5-percentage-point increments. And if revenue reaches the target level — €27 million, up from the current €22 million — then other steps will be activated. We've also built in precautionary measures so that if the forecasts don't hold — if, in reality, money doesn't start flowing in from the global market — then we won't proceed with those steps," he explained.

"This kind of political flailing that Mr. Võrklaev has been engaging in lately isn't exactly appropriate," he added.

"I'd also encourage my good friend Mart Võrklaev to think a little more outside the box and stop living in the past," Tsahkna said.

According to Tsahkna, the move represents a shift in the underlying system for funding sports and culture. "If it succeeds, Estonian culture and sports will receive more sustainable and improved long-term funding. If the forecasts don't pan out, we've already planned for that. We're not acting recklessly or randomly," he said.

"This sort of political gameplay is something I generally don't support, and I don't support it this time either," Tsahkna stressed.

PM: Culture needs to be compensated should tax receipt not improve

Prime Minister Kristen Michal (Reform) compared the gambling tax reduction to the earlier abolition of Estonia's corporate income tax. "That was a project marked by a minus sign. People said the calculations showed that no revenue would come in and that the economy would collapse. If I remember correctly, in the following years, profits grew ninefold, tenfold, elevenfold. In reality, it all came out of the shadows and the Estonian economy gained momentum," Michal said.

According to Michal, the Ministry of Finance cannot accurately forecast the effects of the tax cut. He emphasized that what would come to Estonia is not gambling activity itself, but rather companies' licenses and accounting operations. He said the key is that these operations must be subject to oversight, which is why plans are in place to strengthen the work of the Financial Intelligence Unit (FIU).

"I think the Ministry of Finance's warnings and differing opinions are entirely valid. I don't think Mart Võrklaev's position differs much from the average view. We will certainly keep a close eye on things and try not to increase risks, but we also want to bring in additional funding for sport and culture," said Michal.

He added that if the tax cut fails to attract new licenses to Estonia, the government will cover the shortfall in cultural funding through cuts in other areas. "We will not leave a hole in culture. If necessary, we'll reallocate funds from elsewhere to fill the gap," the prime minister said.

In response to Võrklaev's criticism that the government is not listening to finance professionals, Michal disagreed. "If you look at this government, it's finance people we're listening to all the time," he said.

The bill, submitted by MPs from the Reform Party and Eesti 200, passed its first reading in the Riigikogu on October 21.

In addition to Võrklaev, the gambling tax reduction has also faced criticism from Annely Akkermann, chair of the Finance Committee and fellow Reform Party member, as well as from the parliamentary opposition and the Ministry of Finance.

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