Gambling in Estonia
The organisation of gambling in Estonia is a legal activity. The sphere of gambling is regulated by legislation and supervised by the Estonian Tax and Customs Board. The state law which regulates the work of any organisation related to providing gambling is the Gambling Act. Gaming industry is developing equally offline and online. To organise a ground-based institution with gambling entertainment it is necessary to get a license. Similarly, a license is required to create online gambling websites. Since the gambling industry is partly nationalised, foreign operators also need to obtain permission to provide services. Today, the development of gambling in Estonia is mostly connected with tourism. The largest number of players in land-based gambling institutions are residents of Finland and CIS countries. Estonian citizens, in turn, oppose the development of gambling among the population of the country. They voluntarily put their names on the register which limits access to online casinos or land-based institutions.
Gambling Games in Estonia
Land-based and online casinos games in Estonia are plenty in number and produced by 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
- Novomatic: Book of Ra, Lucky Lady's Charm and Sizzling Hot
- WMS: Zeus III, Crystal Forest and Raging Rhino
- Ainsworth: Flying Horse, Eagle Bucks and Mustang Money
- Products of other companies (Playtech, NetEnt, Evolution Gaming)
Novomatic slot machines are very popular in Estonia. In 1993, the Austrian company opened its branch in the territory of the country and since 1996 it became the official partner of Estonian lotteries. Playtech slots are also in demand. The main office of the manufacturer is located on the Isle of Man. A branch office of the company operates in Estonia.
Gambling in Estonia must correspond to the following parameters: the participant of the game places bets, as a result of the game, one or more players can receive a prize the amount of which depends on the bets placed and the outcome of the game depends on chance. Gambling legislation, accordance with the Gambling Act, provides these definitions include casino table games, slot machines, lotteries and sports betting. All these types of gambling services are provided only if the operator has obtained a license. The organisation of gambling requires paying large taxes. Legislation of Estonia distinguishes the following types of legal gambling: games of chance (games the outcome of which is determined randomly or using a random number generator), lotteries, sweepstake (sports betting) and skill-based games (those where the result depends on players' skills and knowledge of the rules). Games of chance are table games and slots. Lotteries are private and public draws. Sports betting and betting on all sorts of events are also available. Skill-based games include: roulette, poker and other card games.
Gambling regulators and laws
Regulation of the gambling market in Estonia is handled by the Estonian Tax and Customs Board of the Ministry of Finance. This body is engaged in issuing licenses in accordance with the main document regulating gambling — Gambling Act. The law tells in detail what kind of entertainment is considered gambling and what kind of permits the entrepreneur must get to organise a gambling business. The government itself has the exclusive right to organise gambling. Licenses and permits issued to private companies delegate this right to natural and legal persons. The first law in the field of gambling was published in 1994. It addressed issues on organising lotteries. The law on taxation of companies providing gambling services was adopted at the same time. A year later the Gambling Act appeared. It established the legal basis for conducting other gambling games (games of chance, sweepstakes, skill-based games). Since 1995, the Gambling Act has become the main document regulating the activities of gaming companies. Since its adoption, it has undergone a number of changes and amendments that tighten control over operators.
Online gambling in Estonia
Internet casinos in Estonia are allowed. All online gambling games licensed in the country are available on online portals. Operators of gambling websites are required to provide information on how to protect personal data and user transactions. Also, it is necessary to prove that methods of deposit and withdrawal of funds from the casino account are safe. The following users are allowed to play on online platforms: older than 21 - if an online casino specialises in games of chance and skill-based games, over 18 years old - sweepstakes and over 16 years - if a portal provides access to lottery.
The license to organise gambling business in Estonia is issued to both natural and legal persons. In order to obtain a permit, the entrepreneur must provide a package of documents confirming his financial reliability. It is also necessary to prove the availability of technical and material resources for organising gambling. The list of documents includes:
- The list of founders of the company and copies of documents confirming the identity of the organisers
- Documents on the availability of technical and material resources - payments for rent and utilities, certificates of bank account
- A detailed business plan with a prognosis of expenses and profits
- Description of security features in a gambling institution or online platform, a description of the protocol for payments of the funds won
- Information about gambling games which are available in the casino - producers, game rules, a full list of names
- Application for a license
Only those applicants who meet the number of requirements can obtain a license. A legal or natural person must be registered in Estonia and the company must work in accordance with the laws of the country. The operator cannot engage in any business except gambling. A private company must be financially independent. The starting capital of the enterprise must be at least 2 million EEK (Estonian kroons). The package of documents and the application for a license are processed only after the state fee is paid. The fee is determined by the chosen sphere of gambling. The application for licensing of gambling services, except for lotteries, will cost 3,200 EUR and for licensing lottery - 640 EUR. To process the application for the organisation of charity lottery - 130 EUR. If the decision of the Ministry of Finance is positive, the company pays the cost of the license: the organization of gambling (a game of chance) - 47 940 EUR, Skilled-based games - 3,200 EUR and Sweepstakes - 31,960 EUR. In addition to the license, applicants must obtain additional permission to organise gambling business. So, the validity term of the license is 10 years and the term to deliver gambling entertainment is five years. Permission is extended after the expiration. Natural and legal persons have different opportunities regarding the legalisation of their activities. Natural persons are allowed to organise only skill-based games. Legal entities can engage in the supply of all kinds of gambling allowed by the legislation of Estonia.
Development of Gambling Market in Estonia
In addition to branches of large companies, Estonia has its own companies. They develop gambling software or parts of software solutions for world-famous corporations. Such enterprises include: dervico - a studio created in 1996. The office of the company is located in Tallinn. The firm develops mobile applications and PC slots for Microgaming Foxium - a relatively young studio which appeared in 2015. To date, the company's portfolio contains five slots. These are five-reel slot machines with a theoretical return to player of over 96%. They have all sorts of bonus features: free spins, bonus games, Wheel of Fortune with additional prizes. There are not that many Estonian national companies. However, the online gambling market is constantly evolving. This serves as a fertile ground for the creation and development of new studio developers. Despite the fact that gambling in Estonia is strictly regulated by the authorities, the legislative framework allows the gambling industry to actively develop. The state supports the organisation of new land-based casinos and online websites and taxes gambling enterprises. The funds received from casinos are invested into the development of culture and sport, the creation of social programs and financing medicine. In addition, Estonian players can refuse to play in land-based institutions and casino websites on their own. Any user can add himself to the black list if he feels addicted to gambling. So, more than 2,000 fans of gambling voluntarily refused from land-based and virtual casinos in 2016. Today, most of the players in Estonia are foreign tourists.
Gambling business in Estonia is a stable source of government revenue. The country's budget is replenished through the acquisition of licenses and permits to provide gambling services. In addition, all games (depending on the type) are taxed. So, operators pay a fixed amount for table games and slot machines and in addition - a certain percentage of the bets placed on the table or on the slot. Owners of the license to organise lotteries give the state 18% of income and operators of sweepstakes - 5%. This money is used to develop the country's economy and is allocated to finance various cultural fields.