Estonia gambling regulation, licensing and taxation

Regulated. Local licences are issued by the Tax and Customs Board for operating land-based casinos.

Section 22(1)(1) of the Gambling Act regulates gambling at casinos as gambling at a “gaming location”.

To the best of Vixio’s knowledge, Estonia’s gambling legislation does not specify permitted casino games. However, Section 4(1) of the Gambling Act defines sub-types of games of chance as follows:

• “Games organised on gaming tables and gaming machines: games, the outcome of which is determined by means of an electronic, mechanical or electro-mechanical device prepared or adapted for the organisation of gambling, or with the help of the organiser of the game;
• Additional games of chance: games which upon fulfilment of the conditions set by the rules of game grant an opportunity to the player playing on a gaming machine, at a gaming table or an online game of chance ,to win a prize collected out of the bets of the gaming machines or gaming tables or another predetermined prize.”

• Tax and Customs Board

General licensing information

An activity licence and an operating permit are required for organising gambling in Estonia (Section 9(1), Gambling Act).

The Tax and Customs Board issues an operating permit for:

• Opening a gaming location at the address or on the ship indicated in the decision on the issue of the operating permit to organise games of chance (Section 22(1)(1), Gambling Act).
• Opening a gaming location at the address or on the ship indicated in the decision on the issue of the operating permit to organise games of skill (Section 22(1)(3), Gambling Act).

An activity licence to organise games of chance or skill entitles a person to apply for an operating permit for organising gambling (Sections 16(1) and 16(2) of the act).

According to Section 37(1) of the act, a gaming location for games of chance may only be situated in:

• A separate building.
• A hotel, conference centre or recreational establishment.
• A business building or shopping centre, in case it is not possible to enter the gaming location through other premises of the business building or shopping centre, and if there are no living quarters in the same building.

Applications for both activity licences and operating permits are currently being accepted by the Tax and Customs Board.

Pursuant to Section 16(1) of the act, an activity licence is issued for an indefinite period, is non-transferrable and expires in cases specified in Section 211 of the act.

According to Section 22(3) of the act, the operating permit for a gaming location is issued for a period of up to 20 years. However, unless the gaming location for games of chance or skill is located on a ship registered in Estonia, the operating permit is issued for a period of time indicated in the written consent for opening the gaming location, which is granted by the local rural municipality government or city government of the gaming location within one month of receiving the request. According to Section 27(1) of the act, the consent for opening a gaming location for games of chance is valid for five to 20 years, while the same for games of skill at a gaming location is valid for up to 20 years.

As specified in Section 9 of the act, a gambling operator shall be a public or a private limited company, with the following minimum share capital specified for different games:

• €1m for games of chance (Section 9(4)).
• €25,000 for games of skill (Section 9(6)).

According to Section 10(1) of the act, an operator, except for non-profit associations organising toto, is mandated to maintain an additional reserve from annual net profit transfers or other transfers which can then be entered in a reserve pursuant to law or the articles of association. The amount of additional reserve shall not be less than one third of the share capital (Section 10(2)). At least one seventh of the net profit shall be added to the additional reserve during each financial year. When the additional reserve reaches the amount prescribed in the articles of association, the increase of the reserve shall be terminated (Section 10(3)).

Pursuant to Section 9(3) of the Gambling Act, the gambling company’s shareholders, partners or the management should not consist of a person who:

• Has a criminal record.
• Has been a member of the management body of a company that has organised gambling without an activity licence or operating permit or whose activity licence has been revoked, for the following reasons specified in Clauses 2-4 or 7 of Section 20(1) of the act:
• Incorrect information has been knowingly submitted upon application for the activity licence.
• The holder of the activity licence has repeatedly and materially violated the obligations imposed on the holder of the activity licence by this act.
• The holder of the activity licence has organised gambling without an operating permit for organising gambling.
• The holder of the operating permit has failed to implement a precept of a law enforcement agency by the due date and the court has not declared the precept invalid.
• Has caused the insolvency of a company due to a grave error in management, as indicated in a court decision for bankruptcy proceedings.

According to Section 37(6) of the act, the gaming location is mandated to possess at least 40 gaming machines or at least five gaming tables, on which the gambling tax is paid. (For instance, there can be: a gaming location with at least five tables and fewer than 40 machines; a gaming location with at least 40 machines and fewer than five tables; and a gaming location with both five (or more) tables and 40 (or more) machines).

Licensing costs

Section 260 of the State Fees Act specifies the following state fee structure when reviewing applications for the activity licence:

• €47,940 for games of chance.
• €3,200 for games of skill.

According to Section 261(1) of the State Fees Act, the state fee for the review of an operating permit application amounts to €3,200.

More information regarding the application for an operating permit to organise games at gaming locations is available in Section 23 of the Gambling Act, and on the Tax and Customs Board’s website.

Gambling tax is paid monthly (Section 3(1), Gambling Tax Act).

The tax rates for organising gambling at gaming locations are as follows:

• €1,406 per gambling table (Section 6(1)).
• €300 per gaming machine used for organising games of chance and 10 percent of the total bets made on the gaming machines, less the winnings (Section 6(2)).
• €32 per gaming machine for a game of skill (Section 6(3)).

Pursuant to Section 3(3) of the act: “In the event of organising a tournament of a game of chance, the period of taxation is the period during which one tournament of a game of chance is organised, starting on the first day of accepting the participation fees set out in the rules of tournament of the game of chance and ending on the day when the acceptance of participation fees set out in the rules of tournament of the game of chance is terminated.”

According to Sections 1(1)(6) and 6(8) of the act, a 5.5 percent tax is imposed on the total amount of participation fees, less the portion accruing to the prize pool, for organising a tournament of a game of chance. 

According to Sections 1(1)(8) and 6(8) of the act, a 5.5 percent tax is imposed on the total amount of the participation fees for organising a ring game tournament.