There are more than 90 casinos in Tallinn, where the population of 400,000 people has now been boosted by gamblers from across Europe who are spreading an addiction to the poker tables and fruit machines to the locals.
Some addicts have committed suicide after losing their money. Last year one man drowning in gambling debts killed his wife and children before hanging himself.
The trend has grown so much that a new anti-casino movement is demanding a monument in the city to commemorate gambling victims.
But for the moment Tallinn is profiting to the full from gambling.
"Forget trips to outlandish casinos in Miami and Vegas, it's all about playing your poker in Tallinn, Estonia," says the European poker players' magazine Bluff Europe.
The magazine calls Tallinn the "third hottest poker destination in Europe" after London and Dublin, but ahead of Monte Carlo.
"With its rightly earned reputation as one of new Europe's best party towns, Tallinn looks set to become the place to be for Europe's poker elite," said Bluff Europe.
Soft regulations on gambling were set in the 1990s when Estonia was adapting its communist command economy to the free market.
Now Armin Karu, owner of Olympic Casino, the biggest local operator, is one of the richest Estonians.
Successive Estonian governments were happy to reap the gambling taxes. In 1994 the state took 26.6 million crowns (1.7 million euros) in taxes from casinos. By last year this had grown to 466.7 million crowns (29.9 million euros).
It took more than a decade for politicians to see the downside.
"Surveys have indicated that in 2004 there were around 9,000 gambling addicts in Tallinn plus 13,000 people had some problems with gambling addiction," Jaanus Mutli, Tallinn's deputy mayor told AFP.
"By 2006 these figures had increased to 12 000 and 16 000 respectively and they keep on growing. We really need to do something with it urgently."
Mutli said the city council is considering shutting down casinos near schools and in residential blocks as well as restricting opening hours. The law will have to be changed to allow this though.
"I admit that we have a very serious problem with gambling addiction and I welcome steps to regulate gambling better," Tonis Ruutel, chairman of the Estonian Association of Gambling Operators, told AFP.
Draft Finance Ministry legislation on the gambling business is expected to be adopted by parliament this year and to come in force on January 1.
Under the new law, casino visitors would have to register and smaller casinos would close with a regulation that casinos must have a minimum 40 slot machines instead of of the current eight.
Local authorities will also have more power to completely ban gambling establishments in certain areas.
"Gambling addiction is a disease that has no cure," Leonhard Puksa, head of a group for addicts, told AFP.
Puksa who became hooked going to casinos during the boomtime 1990s said authorities should take tougher measures to make sure people who ask to be kept away from casinos are never let in.
"But for most addicts -- those who are unable to stop even for a moment to write that ban request -- there is practically no way to get out from the evil cycle," she said.
One group, led by Tallinn Art High School principal Mart Sults, is pushing an outlandish plan to build special artificial casino islands in the sea off Tallinn.
"My wish is to attract casinos from city center to these islands, so at least the downtown will be clean of them," said Sults, whose idea has been praised by city leaders.