General understanding of gambling regulation in Estonia

The regulator of gambling in Estonia is the Estonian Tax and Customs Board (“EMTA”).

It is allowed to organize gambling that complies with the requirements of the Gambling Act (“Act”). The purpose of the Act is to set high standards for gambling operators, to provide measures to protect players, and to reduce the harmful effects of gambling and its influence on society.

According to Section 2 of the Act, “gambling” is a game that meets all the following criteria:

1. it is a precondition for participating in a game that the player makes a bet;
2. the player may win a prize as a result of the game;
3. the outcome of the game is partly or fully determined by an activity based on chance or depends on the occurrence of a previously unknown event.

The following types of gambling may be organized in Estonia:

• Games of chance (and remote gambling)
• Toto i.e. sports betting
• Lottery
• Games of skill
• Commercial lottery

List of legal gambling operators can be seen here.

The requirements provided by the Act are not applied to the following types of gambling:

• games of skill, the only possible prize of which is getting the opportunity to take part in the same game again;
• sports competitions;
• lotteries with the value of the prize pool of up to EUR 1000 which are not organized more often than once a week;
  • lotteries with the value of the prize pool of up to EUR 1000 which are organized on ships carrying passengers on international voyages that have been registered in an Estonian ship register;
• commercial lotteries with the value of the prize pool of up to EUR 10,000.

These games are not subject to gambling tax.

It is prohibited to organize gambling, if the condition for determining the outcome of the game is the achievement of a certain number of participants or bets, and it is not guaranteed to return the player the entire amount of the bet in case the condition is not achieved.

Application for permits

Before offering gambling in Estonia, the company must first apply for the activity license for organizing gambling and the operating permit to the EMTA.

The first step is to apply for the activity license, following which the company must apply for a separate operating permit for each gambling location. Only after the activity license or operating permit has been granted the company may start offering gambling in the gaming locations specified in the operating permit.

No activity license or operating permit is required in the case of a commercial lottery, but a notice of economic activities must be filed with respect to the organization of a commercial lottery.

Activity license for organizing gambling characterized as follows,  but not limited:

1. This license grants the right to apply for operating permits for gambling and is valid for an indefinite period of time. You can apply for the activity license to offer games of chance (which also include poker tournaments), toto and games of skill. A separate activity license is required to provide each type of game.
2. The license can be applied for by a public limited company or a private limited company registered in Estonia or in the European Union, share capital amounts to at least:

• EUR 1,000,000 for games of chance;
• EUR 130,000 for toto;
• EUR 25,000 for games of skill.

1. The gambling operator must be a reliable legal entity, for whom the organization of gambling is its only activity.
2. In order to obtain this license, fill in the application form and attach the documents listed in the annex to the application. 
3. The state fee for this license is:

• EUR 47,940 for organizing a game of chance;
• EUR 31,960 for organizing a toto;
• EUR 3,200 to organize a game of skill.

1. The EMTA shall take a decision on granting or refusing to grant this license within 4 months after receipt of all the necessary documents and information, but not later than within 6 months after receipt of the application for this license.

Operating permit for gambling has the following features, but not limited:

1. This permit grants the right to open the gambling gaming location at the address indicated on the permit, aboard a ship, or to organize gambling as remote gambling.
2. The permit can only be applied for by the company that has already been issued the activity license of the corresponding type of gambling in Estonia (except the lottery).
3. A land-based operating permit must be applied for if the entity wishes to arrange gambling at a specific address or aboard a ship.
4. The operating permit for remote gambling must be applied for if gambling is to be organized where the outcome of the game is determined by an electronic device and the player can participate in the game by electronic means of communication, including telephone, Internet and media services.
5. These are the Terms and Conditions for the organization of remote gambling, compliance with which is mandatory.
6. To obtain the land-based operating permit, the application form must be filled in and the documents listed in the Annex must be attached to the application. 
7. To submit an application for a permit to organize games of chance, toto or games of skill as remote gambling, this application form must be filled in and the documents listed in the Annex must be attached to the application.
8. The EMTA shall take a decision on granting or refusing to grant the operating permit within 2 months after receipt of all the necessary documents and information, but not later than within 4 months after receipt of the application for the operating permit.
9. Before submitting the application, the company must pay the state fee of EUR 3,200, except in the case of the application for the operating permit for the lottery, the review of which will be subject to the state fee of EUR 640.
10. One of the conditions for obtaining the operating permit  is the existence of a control system for electronic gambling reporting (i Elektrooniline hasartmängu aruandlus) (read more here) and the list of persons with restrictions on gambling (Hasartmängu piiranguga isikute nimekiri) (more information can be found in § 39 of the Act and § 64 of Statutes of the Register of Taxable Persons). 

Anti-money laundering regulation of gambling

The Money Laundering and Terrorist Financing Prevention Act is applicable to gambling operators, except for organizers of commercial lotteries.

The gambling operator applies due diligence measures at least upon payment of winnings, making of a bet or on both occasions where the sum given or receivable by the customer is at least EUR 2,000 or an equivalent sum in another currency, regardless of whether the monetary obligation is performed as a single payment or as several related payments over a period of up to one month.

The gambling operators apply such due diligence measures before the establishment of a business relationship or the making of a transaction outside a business relationship:

• identification of a customer or a person participating in an occasional transaction and verification of the submitted information based on information obtained from a reliable and independent source, including using means of electronic identification and of trust services for electronic transactions;
• identification and verification of a representative of a customer or person participating in an occasional transaction and their right of representation;
• identification of the beneficial owner and, for the purpose of verifying their identity, taking measures to the extent that allows the obliged entity to make certain that it knows who the beneficial owner is, and understands the ownership and control structure of the customer or of the person participating in an occasional transaction;
• understanding of business relationships, an occasional transaction or operation and, where relevant, gathering information thereon;
• gathering information on whether a person is a politically exposed person, their family member or a person known to be their close associate.

The Financial Intelligence Unit may transmit the information (data, analyses or assessments registered in the Unit) to the EMTA to be used in proceedings related to gambling activity licenses.

Taxation on gambling activities

Regulation of taxation in the sector of gambling is performed on the basis of Gambling Tax Act.

Gambling tax must be declared and paid by each company to which the activity license and operating permit have been issued. The tax is paid to the bank account of the EMTA.

The period of taxation with gambling tax is the calendar month.

 In the event of organizing a commercial lottery, the period of taxation is the period during which the commercial lottery is organized, starting on the first day set out in the rules of the game for placing bets and ending on the final day for distributing winnings as set out in the rules of the game.

In the event of organizing a tournament of a game of chance, the period of taxation is the period during which one tournament of a game of chance is organized, 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.

The gambling operator submits a gambling tax return to the EMTA and pays the gambling tax by the 15th day of the calendar month after the taxation period.

You can check the tax rates that exist in the gambling industry:

№	Gambling activity	Rate
1	Organizing games of chance on a gaming machine	EUR 300 per gaming machine used for the organization of a game of chance and 10% of the total amount of bets, from which the winnings have been deducted
2	Organizing a game of chance using a gambling table	EUR 1278.23 per gaming table
3	Organizing a game of skill on a gambling machine	EUR 31.95 per gambling machine of game of skill
4	Organizing a lottery	18% of the total amount received from the sale of lottery tickets
5	Organizing a commercial lottery	18% of the prize pool
6	Organizing games of chance and games of skill as remote gambling	5% of the total amount of bets from which the winnings have been deducted
7	Organizing a gambling tournament as a tournament of a game of chance	5% of the total amount of participation fees for the tournament of a game of chance, which is the amount of fees paid to the operator by the participants of the tournament, which constitutes the prize pool of the tournament and the fee of the operator
8	Organizing a tournament of a game of chance as a ring game	5% of the total amount received from the participation fees of the tournament of a game of chance, which is the amount of fees received by the gambling operator from the bets made by the players in the ring game
9	Organising a toto	5% of the total amount of bets from which the winnings have been deducted

In addition, each year, within 6 months following the end of the financial year, companies must submit an annual report to the Commercial Register for the previous year.

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