The Riigikogu Cultural Affairs Committee has backed a proposal to shift sports and physical exercise funding away from alcohol and tobacco excise duties and towards gambling tax revenues.

By law, physical culture and sports funding, which is funneled via the Cultural Endowment (Kultuurikapital), derives from alcohol and tobacco excise revenues.

Cultural Endowment head Margus Allikmaa noted that growth in gambling tax revenues has been steady and has far outstripped that seen in excise duty revenues.

Additionally, gambling tax rates will be hiked from 2026.

He said: "Now that we have received the Ministry of Finance's budget forecasts up to 2028, the revenue from alcohol and tobacco excise duties is not expected to grow or will grow only minimally."

"From 2026, when a new gambling tax rate increase will take effect, gambling tax revenue will increase significantly again," Allikmaa added.

Sports funding has stagnated, Allikmaa noted, and its budget has stayed practically unchanged since 2022 and is expected to continue to 2028, prompting a proposal to decouple the 0.5 percent share of tobacco and alcohol excise revenue, and align it with funding principles of the other seven target capitals.

Meanwhile, Tõnis Rüütel, head of the Estonian Gambling Operators Association (X), said tax revenues have nearly doubled in a decade, rising from over €21 million in 2013, to €48 million in 2022, largely from foreign sources.

Remote gambling revenue nearly doubled to €17.2 million last year and is expected to reach €19-20 million in 2023, contributing to a predicted €10 million overall tax increase, according to Rüütel.

However, he warned that tax hikes from 5 percent to 6 percent in 2023, and to 7 percent by 2026 are discouraging new operators from registering in Estonia.

Gaming companies must obtain a license to operate in Estonia.
Sport in Estonia comes under the culture ministry's remit.

--

Follow ERR News on Facebook and Twitter and never miss an update!