The first thing that you will find in this guide to gambling on the internet in Estonia is a brief historical perspective of how the industry has grown in the nation. Then, we look at online sports betting in Estonia and some tax implications. This section then discusses accessibility of online sites for Estonian residents and possible changes ahead.
In recent times, Estonia has rapidly turned into an online gambling place. This country is located in the northern European region of the Baltic. This nation boasts 1.3 million residents and it lies on both the Baltic Sea and Gulf of Finland’s coasts.
Estonia, occupied by the Soviets for much of the 20th century, got her independence in 1991 and became a democratic republic. In 2004, it joined the EU and implemented the Euro as its national currency seven years later.
Throughout the Soviet period, there were no forms of gambling in Estonia until 1991 after which the black market for illegal betting developed. Just as it began, the new government immediately started to seek means of controlling and taxing gambling business; thus starting with a state lottery in 1994 and then followed by an expanded Gambling Act of 1995 [1]. All forms of gambling were permitted and this laid down a framework for licensing operators.
In addition to fixed odds betting, pari-mutuel betting is prevalent particularly in the market of horse racing, which is a very famous place where only one track exists in Estonia at Tallinn Hippodrome [2]. Olybet and Olympic Poker are also among the most played gambling sites in Estonia.
Until 2008 when new gambling laws were enacted to regulate online gaming, foreign companies were allowed by Estonia to provide gambling services through the internet without any regulation for online bookies. This was done because of the global financial meltdown and online gaming became a cash cow through levies and taxes.
In 2010, the first local websites became licensed, while foreign companies were banned, although it was a challenging task to enforce this measure [3]. Although its take up was slow, the option for international firms to be licensed was only introduced in 2011 because one of the critical requirements was that such companies should have their servers operating in Estonia. This was no longer required in 2012 and together with low levies of 5% on revenues led to more companies seeking licensing.
Many big bookmakers licensed in other parts of Europe have preferred to go by the EU law and somehow managed to offer their services to Estonia despite being blocked.
Both Estonians and other EU citizens are exempted from tax on their winnings in sports betting, which means that they do not have to state the amount won in their income tax returns. The tax these companies should pay is equal to 5% of their annual revenue, standing among the lowest rates worldwide.
Some Estonian websites serve Estonian customers; however, most international betting sites that accept Estonians do not translate their websites into Estonian. If you bet on such sites, you may choose another language that you understand or depend on translation tools in browsers. On the other hand, some bookies have Euro as a standard currency for transactions.
Most people use credit or debit cards and they are usually accepted in Visa and MasterCard. You can also consider using Neteller, Skrill or other online wallets that offer affordable transactions, alternatively you may want to go for prepaid services like Ukash and Paysafecard.
It appears that no one wants a change in Estonia’s current legislation, but the existing set-up seem okay for all concerned parties, although they still try to restrict unlicensed operators. Most especially big bookmakers would instead not pay huge license fees to be legal but the restrictions were less tight than some of its EU counterparts.
The proposed amendments that have been discussed focus on keeping activities safe and protecting problem gamblers. These include a national self-exclusion list and regulation for betting and deposit limits. Many decent operators already provide these as choices to enable them attract customers by calling themselves a responsible gambling entity [4].
[1] Estonia Gambling License – Viaden
[2] Tallinn Hippodrome – Hippodrome.ee
This article gives information on the creation of an online black list by Estonia as reported by Calvin Ayre.
The Revision of Online Gambling Regulation in Estonia – Sorainen [2]
