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.

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
• 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.

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.

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.

VALCORP can further assist with gambling software development solutions, business consulting and advisory services.