The government introduced the gambling tax break late last year, aiming to attract new market players in the sector. The Riigikogu adopted the bill amending the Gambling Tax Act on December 3, 2025, with the aim of incrementally reducing the gambling tax rate by 0.5 percentage points per year, from 6 percent to 4 percent. Due to an oversight in the law, the Riigikogu had to reconsider and adopted it once more on February 10.

"We learned how much revenue the state is expected to lose, according to the Finance Ministry's forecast, compared with the previous assumption. From this year through 2029, it amounts to around €31 million," Reinsalu told ERR.

Taxes on casinos and gambling have long been a source of revenue for the culture sector, which is now suffering as a result of the cut. The Cultural Endowment will lose €4 million in 2026 and again in 2027 as a result of the tax break, it is estimated.

Cultural Endowment (Kultuurkapital) head Margus Allikmaa said the reverse of a planned hike and its replacement by a cut had been "unjustifiable."

"Estonia's tax rate is already the lowest in Europe, and that small increase would have meant nothing other than additional revenue, which it actually produced in previous years as well. When the tax rate was raised in 2024 for the first time in quite a while, state revenues and those of the Cultural Endowment rose sharply. So the tax cut was in no way justified or necessary — now we are paying the price, and both we and the state budget as a whole have less revenue," Allikmaa said.

Allikmaa noted Eesti 200 MP Tanel Tein and his party as a whole, which had strongly pushed for the tax break, "may have been entirely sincere and honest" in their desires, but "unfortunately it did not work out" and turned out to be "an empty hope."

"You still have to analyze the situation, look at the international picture and at what other countries are doing. I think in this case they simply put too much faith in the gambling operators," he added.

The Riigikogu's State Budget Control Select Committee held an extraordinary sitting Monday to discuss the impact of the remote gambling tax rate change on state revenues and the sectors it finances. Allikmaa attended, along with Tax and Customs Board (MTA) Director General Raigo Uukkivi, Finance Ministry Fiscal Policy Department state finances analyst Rait Kiveste, and Tax and Customs Policy Department senior specialist Maret Mets.

"Finance Ministry officials foresaw the drop in revenue when the law was passed but said it was a political decision, and they have received no government-level input to reverse it," Reinsalu said, adding he is convinced the decision must be reversed without delay.

"Finance Ministry representatives acknowledged that even if the change is reversed, a six‑month notice period must be taken into account. Since this involves a tax rate increase, every month or week of delay adds to the shortfall in budget and Cultural Endowment revenues. It makes sense for parliament to initiate the bill without delay and return things to the previous level," Reinsalu added.

Allikmaa said the lower remote gambling tax revenue is forcing the endowment to reduce grants and review its investment plan for cultural buildings.

"Nothing will actually be left undone outright, but the grants paid to cultural organizers, authors, performers and everyone else who receives support will simply be slightly more modest," Allikmaa said, adding that adjustments to cultural building financing are not yet large enough to require cancellations. However, he warned that the situation will become "somewhat more serious" if the planned 0.5‑percentage‑point tax cut next year goes ahead, which would reduce revenue by nearly 14 percent.

Allikmaa noted some payment schedules will be stretched out, which is easy and doesn't directly affect people, though continuous budget revisions are "certainly painful."

Since the tax change, only one company has received a license to operate on the Estonian market, while two applications are being processed. If those are approved, Allikmaa said tax revenues from these could only be expected at the end of next year or the beginning of the year after that.

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