Estonia, a small country situated in Northern Europe along the Baltic Sea, has emerged as an attractive destination for online gambling operators. With a population of approximately 1.3 million, Estonia boasts a vibrant gambling industry that has been regulated since 1994.
In recent years, the country has shown a growing interest in virtual wagering on platforms like Eesti casinos, both from domestic and international operators.
In this comprehensive guide, we will delve into the online casino industry in Estonia, exploring the relevant legislation, gambling authorities, key players and the benefits of operating in this market.
Gambling Legislation in Estonia
The gambling industry in Estonia operates under the supervision of the Ministry of Finance and the Customs Chamber. The Estonian Tax and Customs Board, an agency of the Ministry of Finance, is responsible for issuing activity licenses and operating permits for gambling and lotteries.
As a member of the European Union, Estonia adheres to EU law, which sets the legal framework for the industry.
The current gambling legislation in Estonia is the 2009 Gambling Act. This act was introduced to regulate and control the rapidly expanding gambling industry, which had seen the proliferation of small slot or wagering halls throughout the country.
The aim was to consolidate the industry, improve control measures and increase revenues. The act not only regulates land-based gambling operations but also paved the way for the regulation of online gambling.
Under the Gambling Act, all organizers of gambling activities, whether land-based or virtual, are required to hold an activity license and an operating permit. The activity license certifies that the applicant is a reliable person who meets the requirements of the Gambling Act.
It is non-transferable and has no specified term. The operating permit, on the other hand, is valid for 20 years for most forms of gambling, except for online gambling (5 years) and instant lotteries (3 years). Municipal governments also have the power to consent to the location of proposed gambling centers.
Obtaining a license in Estonia is open to both domestic and international entities. The licensing procedure requires meeting specific requirements, including a minimum share capital requirement of €1 million for casino operators.
The application process involves paying fees for the review of the activity license and operating permit. The licensing fee for organizing games of chance is estimated at €47,934, while organizing games of skill incurs a fee of €31.95 per table. The wagering tax in Estonia is 18% for lotteries and 5% for sports betting and online gambling.
Online Casinos in Estonia
The online casino industry in Estonia has been steadily growing since the regulation of virtual gambling in 2010.
Online gambling operators, both domestic and international, have the opportunity to obtain licenses from the Estonian Tax and Customs Board to operate legally in the country. As of July 2020, there were 16 online gambling operators holding licenses in Estonia.
One of the prominent players in the Estonian online casino market is Olympic Entertainment Group (OEG). OEG, founded in 1993, is the largest casino operator in Estonia, accounting for approximately 40% of the casinos in the country.
They operate numerous casinos, including the flagship Olympic Park Casino in Tallinn, which is accompanied by a Hilton hotel. OEG expanded its market share in 2016 through the acquisition of Estonian casino operator AS MC Kasiinod, further solidifying its position in the gambling sector.
Estonia’s online gambling market also includes sports betting, which was legalized and regulated in 2010. Operators such as Spordiennustus A/S, a joint venture between the Estonian Olympic Committee and Pafer A/S, offer fixed-odds sports betting services to Estonian players.
The popularity of online sports betting has been on the rise, with locals having access to licensed online sports betting sites.
Benefits of Operating in the Estonian Market
The Estonian online casino industry offers several benefits for operators looking to establish their presence in the market. These include the following:
- Estonia provides access to the European Union market, enabling operators to target a broader customer base.
- As a member of the EU, Estonia adheres to EU regulations, ensuring a secure and regulated environment for online gambling.
- The taxation system in Estonia is favorable for online gambling operators. With a low tax rate of 5% on sports betting and online gambling, operators can enjoy competitive advantages compared to other jurisdictions.
- The 20-year license duration for most forms of gambling, including online gambling, provides stability and long-term planning opportunities for operators.
- Estonia has implemented strict measures to combat unlicensed online gambling. The government actively blocks unauthorized gambling sites from offering their services to Estonian citizens, ensuring that licensed operators have a fair playing field and players are protected.
The online casino industry in Estonia has experienced significant growth since the regulation of online gambling in 2010.
With a well-established legal framework, favorable taxation and access to the EU market, Estonia provides an attractive destination for both domestic and international online gambling operators.
The presence of key players like Olympic Entertainment Group demonstrates the market’s potential and attractiveness.
As the industry continues to evolve, Estonia’s online casino market is poised for further expansion and offers exciting opportunities for operators and players alike.