ESTONIA
Online Gambling License

Licensing in Estonia

Any business looking to join the Estonian gambling industry must apply to the Estonian Tax and Customs Board (EMTA) for:

• Activity license: this is valid for five years and costs EUR 47,940 for games of chance, EUR 31,960 for totos, and EUR 3,200 for games of skill;
• Operating permit: this is valid for ten years and costs EUR 640 for lotteries and EUR 3,200 for all other types of gambling games except lotteries.

Licensing Process

There are five main categories of games allowed in Estonian gambling.

Games of chance. The outcomes of these games depend on chance, and they are played using a mechanical or electronic device or mediated by the game’s organizer. These games can use gambling tables or gambling machines, or any other gaming platform.

Games of chance are also taxed differently:

• Games operated on a gaming machine are taxed EUR 300 + 10% of the net winnings.
• Games on a gaming table are taxed EUR 1,278.23 per table.
• Tournaments are taxed at 5% of participation fees.

Lotteries. These can be classical lotteries or instant lotteries, and while the outcome of these games also depends on chance, the games have regulations concerning the prize winnings and number of winners. The prize pool is determined by the price of circulation of the lottery tickets, up to 80% of the ticket price. Winners can only be chosen up to three times per 24 hours or by opening the lottery ticket field.

• Lotteries are taxed at 18% of total ticket sales.

Totos. Totos are games based on events beyond the control of the player or the gambling operator, such as sports bets. The winnings depend on whether the outcome was true or false. The prize is determined before the bet is placed, or the game operator can determine the percentage of winnings based on the total number of bets placed by players. If multiple players bet correctly, then the total winnings will be divided amongst the players according to the amount they bet, also called the totalizer.

• Totos are taxed at 5% of the income from the bets (net of winnings).

Games of skill. These are based on the physical skills, abilities, or knowledge of players, and the games are played using a mechanical or electronic device.

• Games of skill played on a gaming machine are taxed at EUR 31.95 per machine.

Remote gambling. Players can participate in remote gambling by using an electronic device for communication, and the game organizer determines the outcome using an electronic device. Suppose a game only uses electronic means to receive bets, inform players of the outcomes, or transfer payments to the player: in that case, it is not defined as remote gambling because the other types of games can use electronic means as well.

• Games of chance and games of skill can be offered as remote gambling and are taxed at 5% of the net winnings.

Licensing Process

All owners of casinos and gambling sites who wish to operate in Estonian territory must purchase a license for gambling. The Estonian Tax and Customs Board makes a decision on the application for an activity license and for an operating permit within four months. This timeframe can be extended to up to 6 months. Nevertheless, a business will receive a preliminary response usually within three working days of the application. This rule applies to all organizations, whether they are in the European Union or not. The European Union does not have standardized requirements for organizing gambling. This means that an activity license acquired from another Member State within the European Union does not grant the right to offer gambling in Estonia and vice versa. Businesses must apply for gambling licenses within each Member State, including operators that are located on sea transport under the Estonian flag.

The following requirements are to be met by the applicant:

• Gambling must be its sole business activity;
• It must be permanently established in Estonia;
• It must comply with the AML and GDPR laws;
• It must submit to mandatory auditing;
• It should have adequate organizational and technical structures.

Shareholders holding 10% and above, beneficial owners, and the management team also must meet specific requirements:

• They cannot have criminal records;
• They cannot be board members of illegal gambling establishments or be associated with operators with revoked licenses;
• They cannot be responsible for the bankruptcy of any other company.

There are also minimum share capital requirements for LTD and PLC companies depending on the types of games they offer:

• For games of chance, EUR 1,000,000 is required for LTD and PLC companies;
• For lotteries, EUR 1,000,000 is required for PLC companies;
• For totos, EUR 130,000 is required for LTD and PLC companies;
• For games of skill, EUR 25,000 is required for LTD and PLC companies.

Licensing Documents

Operators need to present the following documents to the EMTA:

• Passports of the management and owners of the company (scans, copies).
• Charter and certificate of registration of the company (scans, copies).
• Certificate of registration of the legal address of the company with documentary evidence of its reality (utility bills).
• Bank certificate of opening an account and the availability of the necessary funds on it.
• Information about the software and website.
• Proof of ownership of the domain name.
• Business plan online casino containing financial statements.
• An application for a license in duplicate, filed with the Estonian tax and customs services.

Licensing Fees

• The license fee of Euro 47,940 – is for making a decision on the application.
• The license fee for the coordination of the process – Euro 31,960.
• Additional charge for the creation of a tote – Euro 3,200 (if necessary).

Gambling Taxes

• Gambling tables are used for organizing games of chance, except gambling tables are used for organizing tournaments of games of chance, and gambling machines are used for organizing games of skill.
• Gambling machines of a gambling operator are used for organizing games of chance and the total amount of bets, less the winnings.
• In the event of organizing a lottery, the total amount received from the sale of lottery tickets has a tax rate of 18%.
• In the event of organizing a commercial lottery, the winning pot whose value exceeds EUR 10,000 has a tax rate of 18%.
• In the event of organizing a totalizer, the total amount of bets, less the winnings have a tax rate of 5%.
• In the event of organizing an online game of chance or an online game of skill, the total amount of bets, less the winnings has a tax rate of 5%.

Licensing Requirements

• Casinos that are located on sea transport, including foreign ones, under the Estonian flag, must also operate under a license;
• the name of the games – with the prefix of the manufacturer;
• on each site create a tab with information about the rules of the game, and contacts of the administrator.

Estonia gambling laws

The laws and regulations governing gambling in Estonia are:

• Gambling Act;
• Gambling Tax Act;
• Personal Data Protection Act (GDPR);
• Money Laundering and Terrorist Financing Prevention Act;
• The general part of the Economic Activities Code Act;
• List and procedure for entry of data registered in the electronic recordkeeping and control system of gambling operators and procedure for connecting an electronic recordkeeping and control system to the information system of the Estonian Tax and Customs Board.

Contact Szilaghi Consulting to Get Your Estonia Gambling License

Since 2004, Szilaghi Consulting has been working with startups, entrepreneurs, and companies already established for online gambling. We have worked all over the world, but we have a special and extensive practice in Estonia. During this time, I gained a deep knowledge of the requirements and general obligations of the process of incorporating the company and obtaining a license for gambling in Estonia. We have established relationships with industry stakeholders, including authorities, service providers, and other gaming companies. This positions us as market leaders in assisting our customers with Estonia licensing goals.

Through our extensive and carefully verified network of contacts in the country, we can ensure that you move efficiently through the entire setup process. We know everything you need to know about requirements, criteria, nuances, and possible obstacles and can help you prevent and navigate whatever comes your way.

To incorporate the company and apply for a gambling license in Estonia or just to discuss your plan, vision or options, contact Szilaghi Consulting today.