A single wording error in an Estonian gambling tax law accidentally exempted online casinos from taxation for an entire year, costing the government €24 million ($27.4 million) in lost revenue — and prompting the country to deploy AI to review draft legislation before it becomes law.
In December 2025, Estonia’s parliament passed changes to the Gambling Tax Act intended to lower the tax rate on remote gambling. The legislation referred only to “skill games,” leaving games of chance and remote gambling outside the tax net. The mistake was first spotted by a legal counsel working for a gambling operator, not by government officials.
The error’s visibility grew when Luukas Ilves, former undersecretary for digital transformation, ran the legislation through AI models Claude and Gemini, both of which immediately flagged the inconsistency. Within hours, Ilves had built a prototype tool called Apsakaleidja — loosely translated as “Fuckup Finder” — that pulls draft bills from parliament’s website and flags broken references, contradictory wording, arithmetic errors, and impossible dates. Of 112 bills currently listed on the tool, 102 are rated high risk. Ilves demonstrated it on national television.
Estonia’s Prime Minister Kristen Michal described the incident as a demonstration of AI’s potential as a government assistant. In January 2026, Michal launched the Eesti.ai program, aimed at doubling national productivity by 2035 through AI adoption. Ilves and Bolt founder Markus Villig are among the program’s advisers.
In April 2026, the government submitted a bill to parliament giving state and local authorities the right to use AI to automate administrative processes. In June, Michal stated that Estonia aims to become the first country to create official digital identities for AI agents.
Estonia’s existing digital infrastructure — 99 percent of public services are already online — may position it to move faster than many countries on AI adoption in government. However, Catherine Flick, a technology ethics researcher at the University of Staffordshire, raised a more fundamental concern: “Why are humans not doing this review process as part of the legislation drafting procedure?”
Source: WIRED