Estonia’s Bet on iGaming: Could the Baltic Nation Become Europe’s Next Digital Gambling Hub?

Estonia plans to join Malta and Gibraltar as a country that sees itself as a hub for online gambling and gaming. The government will try to improve its regulations to meet the needs of the online gambling market.

Estonia’s Digital DNA and iGaming Market Overview

 The interest in online gaming is rooted in the broader digital ecosystem that the country has established. The population of Estonia is just 1.3 million, but it has near-universal internet access, one of the most advanced e-government platforms, and a state-of-the-art digital ID system.

In 2024, Estonia’s total gambling gross gaming revenue exceeded €300 million. The majority of that figure comes from gambling online. According to industry data, around 30% of Estonia’s adult population participates in online gambling in some form. Sports betting and online casinos are the most popular.

Estonia has issued roughly 35 online gambling licenses. These cover the rights to provide casino games, poker, and sports betting. Foreigners can also easily use the e-Residency program to set up businesses in Estonia.

Regulatory Reforms and Tax Strategy

 Estonia has made efforts to reform its tax strategy and lower the online gambling tax rate over time. This is one of the strongest indicators that the government is changing its approach to gambling. By 2029, the tax rate for remote gambling winnings will drop from six to four percent.

At this point, crypto gambling providers such as Stake Casino already operate in Estonia, and the tax reform will include crypto winnings. Lower taxes will attract operators and players, especially when combined with a stable regulatory environment in general.

Reform Party MP Madis Timpson described the move as a strategic investment, stating that Estonia has “the potential to become a leading hub for remote gambling due to its digital infrastructure and regulatory clarity.”

The government also expects the revenue from the gambling tax to rise as the market does. However, the tax reform isn’t without its critics. Opponents claim that the reduced taxes will lead to less public support for sports, culture, and public services.

How Estonia Compares to Established iGaming Hubs

For years, Malta was seen as the European industry leader, serving as a hub for gamers. It provided regulatory certainty and low taxes, which are the two most important features for gambling establishments. Estonia will add a few additional benefits: focus on efficiency, digital governance, and the ability to compete on cost.

A 4% gambling tax would make Estonia the country with the lowest tax rate in Europe. Licensing costs are also moderate compared to the alternative, and the regulatory process is transparent and relatively simple. Estonia currently hosts just a few operators, and it may take a while for the industry to adapt to its new approach.

Still, Estonia doesn’t have the iGaming service ecosystem that Malta has built over two decades, meaning its challenge is not just regulatory but structural.

Local Operators and Market Ecosystem

 There are already domestic casino operators in Estonia, and the new push towards expanding the gambling industry will rely on them first and foremost, while also trying to attract casinos from abroad. The biggest ones are OlyBet and TonyBet, which are now operating beyond the Baltic region.

The wider tech environment can also be supportive of the gambling industry. Estonia has a strong startup culture and a fintech sector, and it’s well-versed in cross-border payment systems. Average revenue per user in Estonia remains relatively high compared with many EU markets, reflecting strong player engagement and spending power.

Challenges and Remaining Uncertainties

There are still challenges Estonia would have to overcome to become a new gaming hub. A small population caps domestic growth. Regulatory compliance is apparent, but it’s still costly. There are also political risks to take into account. Future administrations may not be as friendly towards the idea due to low taxes and the social cost of gambling.

If the projects manage to generate revenue and expand public recognition for the government of Estonia, opposition and skeptics may be brought on board.

To Sum Up

Estonia is trying to become a hub for iGaming and online gambling. It’s already known for its digital administration, e-citizenship efforts, and a highly tech-literate population, so that would be a logical next step. The country plans to take over Malta in its position as the most pro-gambling European state.

This will be accomplished by lowering taxes and by providing a transparent, simple registration process for gambling providers. Some oppose the efforts due to low taxes and the effect they’ll have on public services.