No one is disputing that a gambling operator is required to combat money laundering. The law requires it. The question lies elsewhere: do Estonia's rules prevent money laundering, or do they primarily act as a barrier to new companies coming to Estonia? Unfortunately, experience over the past year points more towards the latter.

The recently amended Remote Gambling Tax Act has brought into focus international opportunities for financing Estonia's state budget and, in particular, sport and culture. The environment here could be attractive given the purpose of an Estonian license is simple: to bring tax revenue earned elsewhere into digitally advanced Estonia. International remote gambling operators will not be targeting Estonian players. Their customers are in other countries, around the world. An Estonian license, however, means that taxes on their activities are paid into Estonia and go towards financing our sports and culture. Every license brought into Estonia is thus a victory for Estonian culture and sports, yet without increasing gambling in Estonia. To achieve this goal, however, companies need to actually come to Estonia. But what is deterring companies today? The simple answer is: fear-driven regulation that diminishes the legal opportunities created in Estonia, because every applicant is treated primarily as a potential risk.

To explain in more detail, a gambling operating license is issued by the Tax and Customs Board (MTA), but it must first be approved by the Financial Intelligence Unit (FIU). The applicant must submit their internal anti-money laundering regulations, appoint a person who will communicate with the FIU (the so-called contact person), and submit documents concerning its owners and managers. Companies already operating must meet these requirements by January 1, 2027, at the latest. Gambling operators are now essentially treated in the same way as financial companies and cryptocurrency firms are. The purpose of stricter rules is understandable. The problem lies in how they get applied in practice.

The contact person must work in Estonia

Under current law, the contact person must be working on a permanent basis in Estonia. The FIU's training materials even state that "the entire department should be located in Estonia." In addition, the contact person must have suitable education, experience and an impeccable reputation, while the FIU must approve their appointment.

What does our regulation mean for an international company? Usually, the people responsible for its anti-money laundering controls work in the same location as its IT and payments teams would do, for example in Latvia, Italy or Malta. In order to obtain an Estonian license, however, it must find someone who works in Estonia, understands the risks of the gambling sector and passes the FIU's checks. The FIU has also indicated that one person may serve as a contact person for no more than two companies, and must have a replacement during vacation periods. In reality, consequently, one contact person is not sufficient; two experts meeting the same criteria are needed – but this is an over-regulation of the requirements. Estonia is small and there are few such specialists. This is as a result not merely a formality, but a real barrier to market entry.

Where the contact person sits says nothing about the quality of their work. The FIU's own updated guidelines do not mention location either. They require the contact person to report directly to the management board, to be competent and to have access to all the necessary information at all times. Even an entire department can serve as the contact person. None of these conditions depends on the country. On the contrary, actual knowledge and control are more effective when they are "close" to the operations themselves. According to the FIU's own data, the sector's real weakness is also the detection of suspicious transactions. In 2025, only about 14 percent of reports were related to genuine suspicions, while nearly 94 percent of all reports came from only about a tenth of all companies. This problem is solved by a good monitoring system and a skilled team, not by whether the contact person sits in Tallinn or in Rome. If a company's international team is stronger than an individual specialist who can be found in Estonia, the Estonian requirement may n fact weaken controls. This also raises a question of EU law. Companies with Estonian licenses often belong to groups managed in other EU countries and mainly serve foreign customers. The EU guarantees companies the right to operate and provide services in other member states. The European Court of Justice has allowed countries to restrict gambling, but only if the restriction has good grounds, genuinely helps achieve its objective, is applied consistently and does not go further than necessary. Estonia's location requirement is questionable in light of the last two conditions. First, it is not consistent: according to the FIU's guidelines, customers from other EU countries are considered lower risk, but a specialist working in another EU country is considered a risk. Second, less restrictive solutions exist. It would be sufficient for the contact person to be available at all times, communicate with the FIU in Estonian and ensure that the FIU has access to the data. In addition, a uniform EU anti-money laundering regulation will take effect on July 10, 2027. It is therefore appropriate to ask whether Estonia's additional requirements, which the EU does not demand, are even still necessary.

Documents must be in Estonian

The second obstacle is the language requirement. According to the experiences of companies, the FIU requires internal rules and other documents be in Estonian. It is natural that communication with the authority would take place in Estonian. However, an international company's internal rules are an everyday working tool. They are used by employees in various countries and so get written in a language that everyone understands. If a separate Estonian-language version has to be prepared for Estonia, two documents are created: one that is actually used at work and another that is shown to the authority. This contradicts the FIU's own objective, however. The FIU will check exactly whether the rules are actually being used or exist only on paper. The updated guidelines state that the rules must be understandable to employees and describe what the company actually does. In the case of customer documents, the guidelines themselves recommend avoiding translation if the original is in a comprehensible language, such as English. There is no requirement in the guidelines for internal rules to be in Estonian. The obligation to translate does nothing to help combat money laundering.

A procedure whose duration and outcome are unknown

In 2024, the Chancellor of Justice examined the FIU's licensing procedures and identified several problems. First, the FIU does not tell applicants when all their documents are in order. As a result, applicants do not know when the statutory 60-day deadline for making a decision starts. Second, in the course of an interview, an applicant may be advised to replace the contact person, an owner or a management board member, or to withdraw the application, but these interviews are not logged in the minutes. Based on the experiences of several companies from 2026, these interviews have gone on for hours, with three to four officials questioning one person all at the same time. For a company planning investments in Estonia, uncertainty of this kind is the worst possible signal. An official refusal can be challenged in court. However, if the outcome of the procedure depends on interviews that are not recorded in minutes, the company will simply choose another country where the procedure is clear and predictable.

Rules must be based on actual risks

The state fully knows what the sector's risks are. According to the national risk assessment, the money laundering risk posed by gambling operators is high because Estonian licenses are used mainly to serve foreign customers and business partners are often located abroad. The FIU focuses on the origin of funds, the use of front persons, the splitting of transactions and cryptocurrency. These are the right issues. But having the contact person live in Estonia or the rules written in Estonian does nothing to counter these risks. What is needed is good transaction monitoring, rapid information exchange and access to data for the FIU. The latter is already guaranteed by law, even when the server is located abroad.

The law itself requires proportionality: the extent of controls must correspond to the risk and be reasonable. The same should apply to the state when it decides what to require of a new market entrant. Penalties are already severe: a fine of up to €1 million can be imposed for violating the requirements for internal rules.

Estonia does not have to choose between strict anti-money laundering controls and an attractive license in order to regulate the market and generate tax revenue. But the success of controls must be measured by whether they stop suspicious money flows. Neither an office address in Tallinn nor the language of the documentation demonstrates this.

The author of this piece advises international gambling operators.

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