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During the time that Estonia was part of the USSR, gambling was prohibited, although there was still a fair bit of gambling in the country, including several illegal casinos. Estonians definitely love to gamble and even Soviet rule couldn’t keep them down, but after they achieved their independence in 1991 the chains were cast off and gambling began to really proliferate. (1)
The casino business really grew and at one time there were as many as 91 casinos operating in Estonia, in spite of a population of only 1.3 million people. The number of casinos has gone down a little since its peak in 2008 and today there are 75 different casinos operating in this very small country, which still is pretty amazing. So the country may be small but gambling here is very big to say the least.
The casinos here are on the smaller side, but there are so many of them, with 40 in Tallinn alone, the capital and largest city, although 12 different cities in Estonia have casinos located in them. So it’s not hard to find one and they tend to be small but bustling. (2)
As far as land based poker goes, there are a total of 12 poker rooms in Estonia, with a total of 27 tables. So as is the case with a lot of European countries, there isn’t a whole lot of live poker action, but Estonia is at least competitive with some countries several times its size when it comes to its live poker offerings. (3)
Estonia began regulating gambling back in 1995 with their first Gambling Act, which set out and enforced licensing requirements for land based gambling venues. This law was updated in 2008 and in particular looked to address the issue of online gambling which had not been dealt with in the original gambling act.
So in 2010 online gambling became regulated, and Estonia ended up taking a rather wise approach to it, particularly with regard to online poker, and for starters allowed foreign companies to participate, which has not always been the case as far as regulated poker in some other European countries.
Some countries look to employ a more protectionist scheme, for instance requiring that gambling companies have a majority ownership within the country, or have a physical presence in the country, and this is actually fairly common, although it doesn’t tend to work very well.
The biggest reason is that with online gambling, regulated operations still need to compete side by side with unregulated ones, and if the regulated companies aren’t at least decently competitive, players will simply choose to play at the unregulated ones.
This is especially the case with poker, and if you don’t look to bring in the bigger poker rooms, or at least one of them, into the fold then the idea is really doomed to fail right from the start, as you end up with rinky dink online poker rooms that are unable to sustain any momentum to even get off the ground.
Some countries though don’t understand that the dynamics of online poker are very different from other forms of online gambling such as casino and sports betting, and in particular, with online poker you do require a quorum to make the thing work, in other words a poker site, to even get going, needs a certain amount of players, and a good amount, to be playing there to get the momentum you need to grow.
Estonia Takes A Novel and Wise Approach To Online Poker
One of the real considerations when coming up with its online gambling regulations was to ensure that the regulations complied with the mission of the European Union, given that Estonia is a member. There are countries who have openly taken on the EU with their regulation, looking to keep out foreign based online gambling companies, which is at odds with the EU’s free trade mandate across member countries.
Initially, the idea was to only offer online gambling licenses to Estonian companies, but the authorities here quickly thought better of this and shortly afterward opened things up to foreign based companies as well. The plan here actually wasn’t so much to regulate online gambling in Estonia as it was to raise some additional tax revenue, to look to better deal with the economic crisis that had gripped the world at the time.
What really set Estonia’s online poker regulation apart from the other schemes of the day was the fact that they didn’t require online poker rooms to segregate players, in other words to have a separate Estonian only poker room where players would only be allowed to compete against players from their own country.
This ring fencing of poker traffic as it is commonly called would not have worked at all in Estonia, although proposing unworkable solutions to online poker doesn’t always serve as a deterrent in some countries anyway. Estonia doesn’t have anywhere near close to the size of market for this to ever work.
What they did instead is to allow poker companies to let their regulated players play on the main sites, and they were the first country to do this, although this has since been copied by several other countries, and is now the preferred way of running regulated online poker, although there are still several European countries that still stubbornly cling to the ring fencing concept in spite of a lot of their players choosing to play at unregulated sites so they can play at the main poker rooms.
Estonia’s online poker regulation did also attract the world’s largest poker site, by far, Poker Stars, which eagerly jumped in and obtained a license early on. So in 2010 Pokerstars.ee was launched, and to date they are the only major poker site with a license here, but given the massive popularity of Poker Stars and the fact that Estonian players can play at the main Poker Stars site, which dwarfs all other poker sites in the world with almost 10 times as much traffic as its nearest competitor, that’s a huge win for Estonian online poker. (4)
This has suited the Estonian online poker market very well, 5 years into this, although Estonian online poker players aren’t just limited to Poker Stars, this is the site that most people choose anyway. You can play at other sites off the grid, and Estonia does seek to block unregulated online poker sites, but that isn’t all that effective if you really do want to play elsewhere, but having Poker Stars as an approved choice is pretty nice.