Gambling license application in Estonia

An operating permit is required to organize gambling activities, but before applying for one, the tax authority must grant an activity license.

Gambling is defined as:

• a precondition for participating is that the player makes a bet
• as a result of placing a bet, the player may receive a monetarily appraisable victory
• 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.

Inside the single market European Union, there are no harmonized rules for gambling services. This means that obtaining an activity license from one European Economic Area (EEA) country does not apply to the other EEA country. Autonomously, this sector is operated by a state-controlled public operator or a private operator with an exclusive right, as long as they adhere to the fundamental freedoms established by the Treaty on the Functioning of the European Union (TFEU). With an increasing number of EU countries have implemented gambling licensing systems, it allows more than one operator to provide services on the market.

Taxation

According to Estonia’s Gambling Act, gambling operators are subjected to gambling tax and must be a reliable legal entity, for whom the organization of gambling is its only activity.

The types of gambling may be organized in Estonia and the tax rate as follows:

• Games of chance
  • Games of chance on a gaming machine, 300 euros per gaming machine used for the organization of a game of chance and 10 per cent of the total amount of bets, from which the winnings have been deducted;
  • Game of chance using a gambling table, 1278.23 euros per gaming table;
  • Games of chance and games of skill as remote gambling, 5% of the total amount of bets from which the winnings have been deducted;
  • 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;
  • 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;
• Toto i.e. sports betting (5% of the total amount of bets from which the winnings have been deducted)
• Lottery (18% of the total amount received from the sale of lottery tickets)
• Games of skill (31.95 euros per gambling machine)
• Commercial lottery (18% of the prize pool)

In which cases permit is not required and not subject to gambling tax, is as follows:

• 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 1000 euros
• commercial lotteries with the value of the prize pool of up to 10 000 euros.

Estonia Gambling License Application Requirements

The first step in operating a gambling activity is to obtain a license that is valid for an indefinite period. Each type of game requires a separate activity license. An activity 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:

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

Non-resident companies must register with the Estonian Tax and Customs Board as a non-resident taxpayer before submitting an application.

Operating Permit

Following the issuance of the license, the next step is the issuance of the operating permit, which grants the right to open a gambling gaming location at the address specified on the permit, aboard a ship, or to organize gambling as remote gambling. In Estonia, the company applying for the operating permit must put in place an electronic recordkeeping and control system called “Elektrooniline Arvestus ja Kontrolli Süsteem” (EAKS) that collects data from the organizer on gambling software, hardware, games played, bets, prizes, and so on. Thus, only a company that has already been granted an activity license for organizing gambling of the corresponding type of gambling in Estonia can apply for an operating permit (except the lottery).

To conclude, The European Union encourages its member countries to modernize and update their national gambling laws.

VALCORP lawyers in Estonia can help you obtain a gambling license. Throughout the process, our lawyers will provide assistance for the client’s legal obligations when applying for gambling license in Estonia such as consultations, the creation of a document register and its collection on the basis of a power of attorney from the counterparty, translation, and verification of the received forms for reliability and compliance with Estonian regulations. Before applying, VALCORP will help the client to determine what type of license is required to develop the client’s business.

Do not hesitate to contact us via telephone: +37255658650 or by email: info@valcorp.eu