Estonian gambling business

estoniaEstablishing a gambling business in Estonia is a legal activity. The gambling industry is regulated by law and is under the supervision of the Estonian Tax and Customs Board. The state act regulating the work of any organization related to the supply of gambling entertainment is the Gambling Act.

The gambling industry is developing both offline and online. To organize a land-based point with gambling entertainment, you must obtain a license. Likewise, a license is required to create online gambling sites. Since the gambling industry has been partly nationalized, foreign operators also need to obtain permission to provide services.

Today, the development of gambling in Estonia is mostly related to tourism. The largest number of players in land-based gambling establishments are residents of Finland and the CIS countries. The citizens of Estonia, in turn, oppose the development of gambling addiction among the country’s population. They voluntarily enter their names into a registry that restricts access to online casinos or land-based establishments.

Estonian gambling legislation

Gambling in Estonia is considered to be entertainment that meets the following parameters:

  1. the game participant places bets;
  2. as a result of the game, one or several players can receive a prize, the amount of which depends on the assigned rates;
  3. the outcome of the game depends on chance.

Under the Gambling Act, these definitions include casino table entertainment, slot machines, lotteries, and sports betting. All these types of gambling services are provided only if the operator has received a license. The organization of the gambling business is subject to a large tax.

Estonian legislation identifies the following types of legal gambling:

  1. games of chance (entertainment, the outcome of which is determined randomly or by a random number generator);
  2. lotteries;
  3. sweepstakes (sports betting);
  4. games of skill (entertainment, the result of which depends on the skills of the participants and knowledge of the rules).

Games of chance include table games and slots. Lotteries include private and state sweepstakes. Various sports bets and bets on various kinds of events are also available. Skill games include roulette, poker, and other card games.

Gambling regulators and laws

The Estonian Tax and Customs Board regulates the gambling market in Estonia. This body is engaged in issuing licenses in accordance with the main document regulating gambling activities – the Law on Gambling. The clauses of the law describe in detail what entertainment is considered gambling and what permits an entrepreneur must obtain to organize a gambling business. The state itself has the exclusive right to organize gambling entertainment. Licenses and permits issued to private companies delegate this right to individuals and legal entities.

The first gambling law was issued in 1994. He touched upon the nuances of organizing lotteries. At the same time, a law was passed on the taxation of companies supplying gambling services. A year later, the Law on Gambling was introduced, which established the legal basis for the conduct of other gambling (games of chance, sweepstakes, games of skill). Since 1995, the Law on Gambling has become the main document governing the activities of gambling companies. Since its inception, it has undergone a number of changes and amendments that tighten control over operators.

Conditions for obtaining a license in a gambling jurisdiction

A license to organize a gambling business in Estonia is issued to both individuals and legal entities. In order to obtain permission from the state, an entrepreneur must provide a package of documents confirming his financial reliability. It is also necessary to prove the availability of technical and material means for organizing gambling. The list of documents in the applicant’s package includes:

  1. a list of the founders of the company and copies of documents confirming the identity of the organizers;
  2. documents on the availability of a technical and material base – payments for rent and office utilities, bank account information;
  3. a detailed business plan with a forecast of costs and profits;
  4. a description of security measures in a gambling establishment or on an online platform, a description of the protocol for the payment of the funds won;
  5. information about gambling games that are supplied in the institution – manufacturers, rules of the game, a complete list of names;
  6. application for a license.

Only applicants who meet a number of requirements can obtain a license. A legal or natural person must be registered in Estonia, and the company must operate in accordance with the laws of the country. The operator cannot engage in any business activity other than the gambling business. A private company must be financially independent. The start-up capital of the company must be at least 2 million EEK (Estonian kroons).

Consideration of a package of documents and an application for a license occurs only after the payment of a state fee. The amount of the fee is determined by the chosen area of ​​the gambling business. An application for licensing gambling services, except for lotteries, will cost 3200 EUR, and for licensing a lottery organization – 640 EUR. Consideration of an application for organizing charity lotteries – 130 EUR. If the decision of the Ministry of Finance is positive, the company pays the license fee:

  • for the organization of gambling (games of chance) – 47 940 EUR;
  • for organizing games of skill – 3 200 EUR;
  • for organizing sweepstakes – 31 960 EUR.

In addition to the license itself, applicants must obtain additional permission to organize a gambling business. Thus, the license term is 10 years, and the right to supply gambling entertainment is five years. The permit is renewed after the expiration date.

Individuals and legal entities have different possibilities in the matter of legalizing their activities. Individuals are only allowed to host games of skill. Legal entities can supply all types of gambling entertainment provided for by Estonian legislation.

Online gambling in Estonia

Online casinos are allowed in Estonia. All gambling licensed in the state are provided on online platforms. Operators of gambling sites are required to provide information on how to protect personal data and transactions of users. It is also necessary to prove the safety of the methods of depositing and withdrawing funds from the casino account.

The following users are allowed to play on online platforms:

  • over 21 years old – if the online casino specializes in games of chance and skill;
  • over 18 years old – when it comes to sweepstakes;
  • over 16 years old – if the resource provides access to lotteries.

The Estonian authorities do not impose strict requirements regarding the language and currency in online casinos. In the ratings of popular platforms, in addition to English-language sites, there are sites in Estonian.

Popular slot machines in Estonia

Land-based and online casinos in Estonia offer a wide range of slot machines from various manufacturers. The portfolio of the largest developers has several slots that are in great demand among Estonian users:

  • IGT: Cleopatra, Noah’s Ark and Kitty Glitter;
  • Greentube: Book of Ra, Lucky Lady’s Charm and Sizzling Hot;
  • WMS: Zeus III, Crystal Forest, Raging Rhino;
  • Ainsworth: Flying Horse, Eagle Bucks, Mustang Money;
  • Developments by other companies (Playtech, NetEnt, Evolution Gaming).

Greentube slot machines are especially popular in Estonia. In 1993, the Austrian company opened its branch on the territory of the state, and since 1996 it has become the official partner of the Estonian lotteries.

Playtech slots are also in demand. The manufacturer’s headquarters are located in the Isle of Man. A branch of the company operates in Estonia.

Gambling software developers

In addition to branches of large companies, their own firms operate in Estonia. They develop gambling software or part of software solutions for world famous corporations. Such enterprises include:

  • Dervico is a studio established back in 1996. The company’s office is located in Tallinn. The firm develops mobile applications and PC slots for Microgaming;
  • Foxium is a relatively young studio that emerged in 2015. To date, the company’s portfolio contains five slots. These are 5-reel slot machines with a theoretical return rate of over 96%. All kinds of bonus functions are implemented on them: free spins, bonus games, the Wheel of Fortune with additional prizes.

There are not so many national Estonian companies. However, the online gambling market is constantly evolving. This serves as a fertile ground for the creation and development of new development studios.

Prospects for the development of the gambling business in the country

Despite the fact that the gambling business in Estonia is strictly regulated by the authorities, the legal framework allows the gambling industry to develop actively. The state supports the organization of new land-based casinos and online platforms, and imposes high taxes on gambling businesses. The funds received from casinos are used to develop culture and sports, create social programs and finance medicine.

In addition, in Estonia, players can independently refuse to play in land-based establishments and on casino sites. Any user can blacklist themselves if they suspect that they are developing gambling addiction. Thus, in 2016, more than 2,000 gambling fans voluntarily refused services in physical and virtual casinos. Today, most of the players in Estonia are foreign tourists.

Findings

The gambling business in Estonia is a stable source of government revenue. The country’s budget is replenished through the acquisition of licenses and permits for the provision of gambling services. In addition, all games (depending on the variety) are taxed. So, for table entertainment and slot machines, operators pay a fixed amount, and in addition, a certain percentage of the bets made at the table or on the slot. Holders of a license to organize lotteries give the state 18% of the income, and sweepstakes operators – 5%. These funds are used to develop the country’s economy and are distributed to finance various cultural areas.

Estonian gambling business

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