Publication date: 25 May 2021
Gambling regulation in Estonia is a great example of how to create a convenient and efficient system that suits all market players. In Estonia, gambling operators can work legally in a safe environment, and the state can consistently receive taxes to the budget. The gambling market in Estonia has developed gradually, only getting better after each legislative update.
- From 2019 to 2020, the gross gaming revenue (GGR) of the Estonian online segment increased from 60 to 78 million euros, according to the Estonian Tax and Customs Department.
How has the Estonian gambling market been developing?
The first law, under which the first national lottery was launched, appeared in 1994. In 1995, the Gambling Act was introduced, legalizing the games, skill games, sweepstakes, and betting. Unfortunately, its introduction led to a reduction in casinos in the country, as only large players could get a license. In 2008, a new law appeared, replacing the two previous ones. But since its introduction coincided with the global economic crisis, the new restrictions led to an even greater reduction in land-based establishments. By 2010, the Estonian authorities, realizing what a huge tax benefit they are missing, had finally adopted a new law. It has legalized the online sector for the first time. At the same time, an effusive advertising campaign began in the country, stimulating casinos lawful work, and saying that players should play only on legal sites. The Gambling Act, adopted on 15 October 2008, and its amendments are currently in force. The Estonian gambling market is also regulated by:
- Gambling Taxes Act
- The Law on Combating Money Laundering and the Financing of Terrorism
- The Law on Advertising
- The Law on the general part of the Code of Economic Activity.
Online gambling licensing in Estonia
In accordance with the laws of the European Union, Estonia has the right to regulate the gaming industry independently. Therefore, it is necessary to obtain the Estonian gambling license. The Estonian gambling regulator is the Tax and Customs Department of the Ministry of Finance. It is this body that issues licenses for gambling in the country. Both local and offshore organizations have to obtain a license. As of May 2021, the list of official gambling organizers in the state may legally include sites of such well-known brands as GrandX, Fenix Casino, Olympic Casino, Pokerstar, Bet365 and others.
- Read also about the rules of operation, advertising and licensing in the markets of other countries in the “Reviews” section!
Taxation in gambling in Estonia
The taxation of casinos in Estonia is regulated by the laws “On Gambling Tax” and “On the Cultural Capital of Estonia”. Operators operating in Estonia must pay a monthly tax on the total amount of bets, net of winnings:
- 10% – on the activities of online gambling operators.
- 1% – from gambling tournaments, mainly poker tournaments.
For comparison with the offline segment: according to the data of the Tax and Customs Department for 2021, the tax rates for the gambling industry are 45% for lottery operators, 34% for slot operations, and 5% for casino gaming tables. Since 2019 and up to the present, the income from planned gambling taxes is distributed as follows:
- 47.7% – to the Fund for the Development of Culture (to subsidize the construction of objects of cultural significance and for the promotion of the work of the faculties of arts and folk culture)
- 15.3% to the Ministry of Social Policy (to support projects in the field of health and social security, as well as to research on the problems of ludomania)
- 14.1% to the Ministry of Culture (dedicated to Olympic training, sports organizations of the disabled, to cultural and sports projects, as well as to the fight against match-fixing)
- 12.7% to the Ministry of Finance for the redistribution of regional investment assistance
- 10.1% – to the Ministry of Education and Science (to support scientific, educational, children’s and youth projects).
The Ministry of Social Affairs, under the auspices of which the funds are distributed, reported that in February 2021, the volume of tax revenues from gambling decreased by a third. Social security, funded with funds provided by gambling operators, was under attack. The agency believes that the situation will only worsen in the next few months. According to experts, the best way to compensate the losses is to stimulate the online market in Estonia, which was not affected by the pandemic, and has been actively growing since 2020.
How to work with the target audience from Estonia?
According to the analytical firm Kantar Emor, which conducted a research on gambling (from 2012 to 2019), the gambling market in Estonia was very active. According to the data, 70% of respondents have gambled at least once in life, and a quarter of all online players do it weekly. At the same time, the participation of users in online gambling has increased almost twice. Estonia has a very high degree of digitalization, which contributes to the development of the online sphere. Internet penetration is 90%, and more than 80% of households have access to the Network via mobile devices.
- A typical player in Estonia is a man aged 30-39.
- Residents of megacities are more attracted to poker and online casino games.
The official language is Estonian, while 30% of the population speak Russian as their mother tongue. Player protection in Estonia:
- The minimal age of a player is 16 years (for the lottery). This is unique! At the age of 18, people are allowed to play (but only in the casino on a ship) at the age of 21, the player gets full access to all gaming services.
- Before a player`s debut, a casino must set the upper limit on the amount that the player can lose. It is forbidden to accept bets that can increase the player’s loss beyond the specified limit.
- The player must always be provided with clear information about how long he has been playing, as well as about all bets and winnings.
Along with the growing popularity of online games in Estonia, there is an increase in the number of citizens who want to restrict their access to gaming sites. In 2015 there were 7640 such citizens in 2020 more than 12 thousand people restricted their access to casinos. At the same time, the frequency of excessive gambling in the country is quite low — only 7%. This confirms the effectiveness of the existing legislative framework. Currently, Estonian citizens can apply for exclusion from gambling establishments for a period of 6 to 36 months. After the specified period, access to gambling entertainment is not automatically opened. To lift the ban, you need to submit a written application to the Tax and Customs Department. For more information, see the section Restrictions on participation in gambling on the agency’s website. There are restrictions on gambling advertising in the country. According to the Gambling Advertising Act:
- a gambling advertisement should be clear and understandable
- a gambling advertisement should not contain a direct instruction to participate in gambling.
Please note! Gambling is also completely legal in Lithuania. But in May, the country’s Seimas voted for the advertising gambling ban in the country from July 1, 2021. At the same time, the Lithuanian market-like other Baltic markets — is quite developed and profitable! It is necessary to have time and collect all the most interesting things! 3snet has prepared the best gambling offers for Lithuania!
Currently, Estonia is one of the most promising gaming markets not only in the Baltic States, but also throughout Europe. There is clear regulation, the interested audience, and lots of opportunities for online casino operators! Go ahead, direct traffic to Estonia!
