Online Gambling Regulations in Iceland

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Mira

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Expertise: Casino Brand Reviews, Casino Bonus Evaluation, iGaming Regulations, EU, UK, & INT Gambling Markets

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Published: May 16, 2023
Updated: April 1, 2026

The online gaming industry can be a world of wonder or a struggle, depending on which region you're playing from. In this guide, we explore the online gambling situation in Iceland and what players can expect.

Gambling regulations in Iceland — Laws and regulations to keep in mind when online gambling in Iceland

There are many other reasons to visit Iceland, including the Blue Lagoon spa, the massive glaciers and hot springs, and the Northern Lights. But when it comes to the gambling industry, you'll find that things are slightly more confusing.

Below, we look at the market in the country, whether it's legal to play and what to expect. Keep reading for all the information you need regarding safe and legal gambling in Iceland.

History and laws of gambling in Iceland

Icelandic gambling history goes back a long time and is pretty intriguing. It's now hard to believe there was a time when the industry was thriving. That is, before the country moved to ban this type of entertainment.

Here is a quick overview of how gaming has changed in Iceland:

Gambling here dates back to 1926, if not before.
In 1926, the government first approved the Lottery Act, its first gambling law. This was during the big gambling and casino boom throughout Europe.
Iceland was considered a trendsetter as it was among the first to implement this gambling legislation, and other countries were still falling behind.
However, other gambling activities already taking place throughout the region became illegal.

In 1933, an amendment allowed the University of Iceland to have its own lottery. It came with the condition that 8% of the proceeds must go towards the University. It also gave rise to more lotteries for charity purposes. They are still available today.

In 1972, the legal lotteries were expanded to include a range of pool-based sports, which became Iceland's first form of sports-based betting.
The first general national lottery took place in 1986. It is a state-backed draw that became a massive online sports betting, lottery and bingo entity, still available today.
In 1994, the first land-based casino slots received approval to operate. However, all proceeds from the establishments were to go to charity. These machines can still be found in the region today.

2004 was a tough year for Iceland, as European lawmakers deemed it was breaking trade rules by banning foreign lotteries. From then on, tickets can be sold as long as the proceeds go to local charities/good causes.

In 2016, updates were made to the 1940 Criminal Code. The additions of articles 183 and 184 clearly state that engaging professionally in gambling and betting activities is illegal.
However, there is no reference made to playing at foreign sites or enjoying recreational betting.

Local online gambling sites are illegal in the region, as no licenses are issued to such sites. However, players can still play at online casinos but from other regulated jurisdictions.

There is hope that the regulations will change soon and Iceland will open the doors to its own virtual iGaming market. Until then, foreign and international casinos are taking care of Icelandic players by giving them access to slots, live dealer and sports betting entertainment.

Many even accept Icelandic Kronas. And while various limitations have been placed on the legal betting options within the region, there are no restrictions on betting with foreign operators.

Gambling policies in Iceland

Casinos are illegal within the region, with the only exception being slot and video poker machines. These can be found in public venues that carry a liquor license.

This gambling activity of casino games in Iceland falls under the exclusive monopoly of the University of Iceland and Íslandsspil. The parties operate as non-profits, with revenue going towards charities.

While online casinos currently have little to stand on within the region, there is not much to stop foreign operators from offering their services to online gamblers. And as a result, this is leading to more and more operators opening their doors to players from the region.

One can't help but wonder when Iceland might push for a change and legalise gaming and open the market for local regulated gaming entertainment.

There are also no restrictions or limits on the amounts you can deposit or withdraw, as there is no regulatory body to implement such regulations. However, every gaming platform will have its own minimum and maximum limits.

Are gambling winnings taxable in Iceland?

When you're playing online casino games in Iceland, you'll find that your winnings are not taxed. The main reason for this is that you'll be playing at offshore sites. Thus, these winnings are not subject to local taxes.

It should be noted that you still have your general income taxes and VAT, which must be paid on transactions into your local bank account. It might be a good idea to go through the laws regarding taxation. But overall, any winnings in online casinos are tax-free.

Can I go to jail for betting online in Iceland?

No, you can't. Online gambling at foreign online gaming sites is not illegal within the region, and it remains a grey area as no laws strictly prohibit this activity.

Iceland allows residents to bet at international casinos or sports betting sites. Thus, you can place bets at foreign sites that accept players from Iceland without the fear of being prosecuted or sent to jail.

Is online gambling legal in Iceland?

Technically, there is a ban on the online gambling industry within the region. That being said, there is no ban on playing at foreign gaming sites.

This means you'll have the opportunity to enjoy the best gaming sites that the industry has to offer. The only challenge is to find sites that accept players from Iceland.

When choosing an online gaming site to play at, it is incredibly important to go for ones that are licensed and regulated, even if not locally. Unlicensed sites are not deemed secure, and with the lack of local protection, it's important to find sites that put player safety first.

This means choosing sites with licenses by respected gaming authorities like the UK Gambling Commission, Malta Gaming Authority or the Government of Curacao.

UK Gambling Commission Visit

Malta Gaming Authority Visit

Curacao eGaming Visit

The good news is that we've compiled a list of the top-rated online casino sites in Iceland that accept players from the country. These sites have been vetted and reviewed to ensure secure gaming, great promotions and game variety and around-the-clock support.

The future of gambling in Iceland

In Iceland, despite the initiative years ago to jump the gun and be among the first to legalise certain gaming actions, it has slowed its role.

So far, the Icelandic government has yet to make any moves to push for more legalisation of gaming activities. While online gaming activities can be enjoyed at foreign legal sites, no local licensed gaming sites are available here.

According to experts, legalising online gaming in the region would drastically strengthen the region's weak economy, as over 70% of the locals regularly take part in any form of gaming available.

In 2024, the market was valued at €150 million, and most of it was due to online gaming. In 2025, Icelanders were expected to spend 36 billion ISK (a little over €250 million), according to a local media investigation. Most of those use crypto and e-wallets to get around the restrictions in place.

In any case, and in 2026 still, everybody is asking the question of why the government isn't doing anything about regulating the market. That way, players will be better protected and revenue will circulate back to the domestic economy.

The hope remains that Iceland will have a change of heart and implement legal online gambling options for residents within the near future. Until then, plenty of top-rated foreign gaming sites have accepted Icelandic residents!