In Estonia, it has emerged that amendments to the Gambling Tax Act passed by parliament at the end of 2025 contain a drafting error that, in practice, leaves part of online games of chance outside the scope of taxation in 2026. The problem affects remote gambling in particular: because of an unfortunate wording change, the applicable tax rate for this segment this year is effectively 0%.

The market spotted the mistake, the budget may feel the impact

According to Estonian media reports, the error was first identified by a gambling operator, after which the issue reached politicians and the tax administration. Behind the technicality lies a real concern about lost revenue, as gambling-tax proceeds are an important funding source in Estonia, including for areas such as culture and sport. Prime Minister Kristen Michal has acknowledged that the mistake could create a short-term funding gap that the state would have to cover with other resources.

How did “0%” happen?

At the heart of the issue is a purely legislative problem: the provision setting the tax rate was amended in a way that explicitly refers to “games of skill”. When combined with cross-references elsewhere in the act, this wording makes it appear that the 5.5% rate does not apply to “games of chance” within remote (online) gambling. As a result, online casino-style games of chance end up outside the tax’s legal reach for 2026.

Confusion was compounded by the fact that the Tax and Customs Board had published general tax-rate information, while a strict, literal reading of the amended law leads to a different conclusion for the disputed category.

What happens next: fast-track amendment and possible retroactive application

The Ministry of Finance has signalled rapid corrective action to restore legal clarity and limit the risk of lost tax revenue. Authorities are considering several legislative routes: either a short stand-alone amendment that fixes the wording, or attaching the correction to an already moving bill. Public discussion has also included the option of applying the fix retroactively from 1 January 2026, though that would require particular legal and political caution.

In the coming weeks, the key factor will be speed. The longer the ambiguity remains in place, the greater the pressure on public finances—and the higher the risk of interpretive disputes between the state and gambling operators.