Estonia’s parliament passed a gambling tax change in December with the wrong legal wording, and the mistake left online casinos outside the intended tax scope for a year, according to WIRED. The error mattered because Estonia’s gambling sector is worth about €300 million, or $343 million, and the online market is among the fastest-growing in the EU.
The Riigikogu, Estonia’s parliament, meant to reduce the tax rate on remote gambling. The enacted language, however, referred only to “skill games” for that year. Games of chance and remote gambling were not covered by the wording, creating a loophole that cost the government €24 million, or $27.4 million, in annual gambling revenue, according to a post by Luukas Ilves, Estonia’s former undersecretary for digital transformation, cited by WIRED.
A lawyer working for a gambling operator found the problem. Ilves later ran the legislation through Anthropic’s Claude and Google’s Gemini, and said both systems immediately caught the inconsistency. That is a fairly brutal review from tools usually marketed with enough gloss to blind a procurement department.
Ilves then built Apsakaleidja, translated as “Fuckup Finder,” a prototype that checks draft bills from the Riigikogu website. The tool flags issues including broken legal references, conflicting language, bad arithmetic and dates that cannot work. It labels findings as high, medium or low risk. WIRED reported that, among 112 bills listed by the tool at the time, 102 were marked high risk.
Prime Minister Kristen Michal told WIRED the episode showed that AI could help public officials and citizens review government work. He also pointed to Ilves’ quickly built checker as an example of “agentic tools” being useful outside the state itself.
From cleanup tool to government policy
After the tax mistake, Michal pushed for broader use of AI in government. In January, he suggested Estonia could use systems like Apsakaleidja to check draft legislation for loopholes before adoption, according to Estonian public broadcaster ERR. He also launched Eesti.ai, a program meant to improve AI skills in Estonia with a stated goal of doubling productivity by 2035. Ilves and Bolt founder Markus Villig are advisers to the initiative.
In April, Estonia’s government sent parliament a bill that would allow state and local authorities to use digital tools, including AI, to automate administrative procedures. The bill is still being debated by the Riigikogu, according to WIRED. In June, Michal told an Eesti.ai meeting that Estonia could become the first country to create official digital identities for AI agents if the plan proceeds.
Kirke Maar, team lead of Eesti.ai, told WIRED the bill is intentionally broad. She said Estonia is drawing a line between rule-based decisions and decisions that require judgment. If the law says a person qualifies once verifiable facts are present, automation may be suitable. If officials must weigh competing interests or personal circumstances, Maar said a human should be involved from the beginning.
Maar and Ilves told WIRED that people would be able to invoke a right to be heard during an automated process, which would stop the automation and move the matter to a human official. They said automation would also be excluded when a citizen disputes a decision. Each automated administrative decision would need an audit trail showing the data used, the rule applied, when the decision happened and how the citizen could challenge or correct it.
Catherine Flick, a technology ethics researcher at the University of Staffordshire, told WIRED the tax error also raises an old-fashioned governance problem: human review failed. She said someone still needs to read legislation with the relevant context before it becomes law.
Liina Vahtras, managing director of Estonia’s e-residency program, told WIRED that AI agents acting across public services, banks and registers need clear ownership, authorization, permissions and responsibility. Michal drew the same boundary around power. He told WIRED that AI may identify mistakes, but parliament, courts and public administrators remain responsible for fixing them.
This story draws on original reporting from WIRED.
