The $28 Million Mistake That Inspired Estonia's AI “Fuckup Finder”

Estonia’s AI embarrassment began with a single wrong phrase.

In December, the Riigikogu, Estonia’s parliament, passed changes to the country’s Gambling Tax Act meant to lower the tax rate on remote gambling. But the wording of the law referred only to “skill games” for that year, not games of chance or remote gambling. Estonia’s entire gambling industry is worth around €300 million ($343 million), and its online gambling market is one of the fastest growing in the EU.

That single blunder meant online casinos were accidentally left outside the tax net for an entire year, losing the government €24 million ($27.4 million) a year in gambling revenues.

The error was spotted by a legal counsel for a gambling operator. But the embarrassment deepened when Luukas Ilves, former undersecretary for digital transformation, ran the legislation through Claude and Gemini. Both AI systems, Ilves said, immediately identified the inconsistency.

Within hours, Ilves...

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