A law passed by the Riigikogu last December reduces the gambling tax on online casinos from 6 percent to 4 percent over two years. The goal was to attract more online casinos to register in Estonia and thereby increase tax revenue. Instead, the state budget has seen several million euros in shortfalls.

Michal said the government must therefore consider whether further tax cuts make sense.

"Certainly this debate will happen. The first clear principle I stated is that culture must not lose out. We have already compensated the missing funds caused by this legislative mistake, and we must find the rest as well so that culture does not suffer," he said.

Because the tax cut has been in place only a short time, Michal said it is difficult to assess whether more online casinos are actually registering in Estonia. It is also not yet clear why gambling tax receipts have fallen. The government expects a clearer picture in the coming weeks.

If tax revenue does not increase, continuing the tax reduction would not be justified, Michal added.

ERR reported in June that the tax change — intended to boost state revenue by attracting foreign online casinos — has not brought new operators to Estonia.

The Riigikogu approved the amendment last December, led by Eesti 200 MP Tanel Tein, lowering the online casino tax from 6 to 4 percent over two years.

The change faced significant criticism, including from coalition members. The Ministry of Finance warned that the tax cut would create a budget gap: gambling tax revenue would fall by €6 million in 2026, €8 million in 2027, €10 million in 2028 and €13 million in 2029.

The bill also contained a typo that would have allowed online casinos to operate tax‑free in 2026. The Riigikogu had to pass a corrected version of the law in February.

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