The Finance Ministry says only two new license applications have appeared following the cut, which was a pledge of the coalition Eesti 200 party, and one of those applications has been declined.

The tax cut, to apply to online casinos licensed in Estonia, was meant to make everyone happy. A lower rate would, it was argued, make Estonia a casino mecca; the state would have amassed more revenues, and culture – gambling tax revenues are a major source of funding for the sector — would finally stop struggling,

"This law isn't built on dreams. Together with the Foresight Center we modeled the entire potential tax take — how much market share would move to Estonia if the tax fell, how much tax revenue would come from that share, what the growth in receipts would be and how we could use it for extra funding for culture and sport," Eesti 200 leader Kristina Kallas had said last December.

A scenario accompanying the cut illustrated these hopes: online casino tax revenues rising to €95 million by 2029. Advocates turned a blind eye warnings at the time which found that not enough new companies might arrive to offset the lower rate. Yet this is what has materialized, though a finance ministry spokesperson rejected claims this had come as a surprise.

"Only two new license applications have come in. One is in process, one has been refused — so there hasn't been a great rush for Estonian licenses. Nor did we expect there to be one. So it went more or less as we thought," said Evelyn Liivamägi, deputy secretary general with the Ministry of Finance.

The Cultural Endowment (Eesti Kultuurikapital) which disburses culture funding to major projects is preparing to tighten its belt, with next year's budget must be made €6–7 million smaller than was projected just a couple of years ago, directly as a result of the tax break.

"The lion's share of that reduction will come from the gambling tax cut, and a very large part of the gambling tax cut comes from the fact that the gambling tax rates have been lowered," said Margus Allikmaa, head of the Cultural Endowment.

The under-construction new ERR TV house, the "Siuru" Tartu Downtown Cultural Center, and the Tallinn Film Wonderland development are among the projects receiving Cultural Endowment money; should tax revenues come in lower than expected, however, the funding payment schedule stretches out. This in turn will mean a greater reliance on loans, and consequently higher interest payments. In the case of the new TV house, this could translate into less funding for new equipment.

"Indeed, if money has to be spent on loan interest instead, it could mean a couple of million less for new television equipment, and we would have to bring equipment over from the old TV house — which we are anyway trying to do as much as possible — but which isn't really very high quality or particularly viable any more," said Erik Roose, ERR board chair.

Current law provides for the online casino tax cut to go ahead in increments, however, reaching 4 percent by 2029.

Allikmaa, Roose's predecessor as ERR chief, said he wants the cuts stopped. "I have proposed that the sensible thing is to end the gambling tax cut as a matter of urgency. The worst thing would be to do nothing," he said.

Finance Minister Jürgen Ligi (Reform) too considers the online casino tax cut bad policy, yet despite this, the government is not planning reverse the tax decision, noting it passed a Riigikogu vote.

"We didn't initiate it and we won't reverse the Riigikogu's choice. But if the Riigikogu does so itself, we'll take an understanding view," Ligi said.

Tax policy must be predictable. Tax rises, or abandoning tax cuts, must be announced at least six months in advance, Ligi added.

The current Reform-Eesti 200 administration is now a minority government, and a general election is taking place in March 2027.

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