Online gambling laws in Iceland

Is online gambling legal in Iceland?

The short answer is that Iceland does not license online casinos at all, and the foreign sites that accept Icelandic players operate without any Icelandic authorisation. Whether a player breaks the law by using them is not settled in the statute, which is why the honest description is "unregulated" rather than "legal" or "illegal".

Icelandic gambling law starts from a general prohibition. Under the Act on Lotteries no. 38/2005 (lög um happdrætti, althingi.is), running a lottery or game of chance for money is not permitted without a licence, and licences are reserved for associations, organisations and institutions that use the proceeds for public-benefit purposes such as sport, culture, science and humanitarian work. Alongside this general act, a small number of operators have their own acts of parliament that give them exclusive rights to particular products: lotto and number games, football pools and sports betting, class lotteries and gaming machines.

Nothing in that framework contemplates a commercial online casino, Icelandic or foreign. There is no application form, no licensing authority for casino games and no tax category for them. A site offering slots or roulette to players in Iceland is therefore outside the system entirely, not inside it on some special basis.

The penalty provisions in the Act are directed at the supply side. Article 11 makes it an offence to operate a lottery without a licence, punishable by fines or imprisonment of up to six months (up to one year in serious cases), and it also penalises advertising, promoting or brokering an unlicensed lottery, regardless of whether it is run in Iceland or abroad. There is no corresponding provision that says a person who buys a ticket or places a bet on an unlicensed game commits an offence.

That gap is what people mean when they call this a grey area. It is accurate to say that Icelandic law targets organisers and promoters and that we are not aware of any player being prosecuted for using a foreign site. It is not accurate to say that playing has been declared lawful. Anyone with a concern about their own position, particularly if they are involved in promoting a site or handling money for others, should take proper legal advice rather than rely on a comparison site.

Who can operate gambling in Iceland?

Only a handful of domestic bodies, each with a statutory basis and each paying its surplus to public causes. The main ones are:

Operator	Products	Legal basis	Proceeds go to
Íslensk getspá	Lottó, Víkingalottó, EuroJackpot, scratch cards	Act on Lotto (lög um talnagetraunir)	ÍSÍ (sports), UMFÍ, Öryrkjabandalagið
Íslenskar getraunir	Football pools (Getraunir), sports betting (Lengjan)	Act on Betting (lög um getraunir)	Sports federations and clubs
Happdrætti Háskóla Íslands	Class lottery, gaming machines (Gullnáman), online games	Act on the University of Iceland Lottery	University of Iceland buildings and research
Íslandsspil	Gaming machines in bars and kiosks	Licence under lottery legislation	Rauði krossinn, SÁÁ, Landsbjörg
Happdrætti DAS	Class lottery	Act on DAS lottery	Care homes for the elderly (Hrafnista)
Happdrætti SÍBS	Class lottery	Act on SÍBS lottery	Reykjalundur rehabilitation

Íslensk getspá and Íslenskar getraunir share a back office and are the closest thing Iceland has to a national gambling operator. Both offer online play through their own apps and websites, but only for lotto, pools and fixed-odds sports betting. None of the licensed operators offers casino table games or live dealer games, and none offers slots in the sense a foreign casino would recognise; the machines run by Happdrætti Háskóla Íslands and Íslandsspil are the nearest equivalent.

Smaller charity raffles and one-off lotteries can be licensed by the district commissioner (sýslumaður) under the general act, subject to conditions such as a maximum three-month sales period, a minimum age of 18 and a minimum share of ticket income returned as prizes.

The Ministry of Justice (dómsmálaráðuneytið) is the ministry responsible for gambling policy and for the acts listed above. Supervision of the licensed operators is light by Nordic standards: there is no dedicated gambling authority, and a 2022 ministry working group described the oversight as fragmented. That report is available on the government website (stjornarradid.is, PDF).

Where do foreign online casinos stand?

Foreign online casinos are unlicensed in Iceland. Most of the sites in our comparison hold a licence from Malta, Curaçao, Estonia or another jurisdiction, and they accept Icelandic customers because nothing in their home licence prevents it. That licence governs how they treat you, not Icelandic law.

Three practical consequences follow:

• No Icelandic supervision. No Icelandic authority checks the site's games, holds its customer funds or handles complaints. Whatever protection you have comes from the foreign regulator.
• Marketing is restricted here. Advertising or promoting an unlicensed lottery is an offence under Article 11 of the Act on Lotteries. This is why foreign brands are not on Icelandic television and why sponsorship of Icelandic sport by betting companies has been a political issue. It is also why this site describes casinos rather than promotes them, and why we say clearly that none of them is licensed in Iceland.
• Payments are not blocked, at present. Icelandic banks and card issuers generally process payments to foreign gambling sites. Payment blocking has been discussed as a policy tool but has not been introduced.

The size of the foreign market is not officially measured. Estimates cited in Alþingi in 2025 put Icelanders' spending on foreign betting and casino sites at roughly 10 to 12 billion krónur a year, around half of the total gambling market, while the Icelandic Chamber of Commerce estimated in 2024 that over half of online gambling by Icelanders takes place on foreign sites (vi.is). These are estimates from interested parties and should be read as such.

Do I pay tax on winnings?

Winnings from foreign, unlicensed gambling are taxable income in Iceland. Winnings from the Icelandic licensed lotteries are not.

Skatturinn's guidance is that prizes and winnings are taxable income subject to income tax and municipal tax under the general rules, with two exceptions: small prizes in ordinary raffles and competitions, and winnings from lotteries that have been specifically authorised by the tax authority to pay tax-free prizes (skatturinn.is). The Icelandic operators listed above hold that authorisation, which is why a Lottó or Happdrætti Háskóla Íslands prize arrives tax-free.

A foreign online casino holds no such authorisation. Skatturinn's detailed guidance adds that lottery winnings from within the European Economic Area can be treated as tax-free on the same basis as Icelandic lotteries, but only where the taxpayer can document that the foreign lottery meets equivalent conditions (leidbeiningar.rsk.is). That provision is written for lotteries in the traditional sense. We are not aware of it being applied to casino or sports-betting winnings, and it would be unwise to assume it will be.

In practice this means:

• Net winnings from a foreign casino should be declared as other income (aðrar tekjur) on your tax return.
• Losses are not deductible against other income. Whether losses in the same year can be set against winnings from the same activity is a question for Skatturinn or an accountant; do not assume it.
• Keep records. Deposit and withdrawal history from the casino, and your bank statements, are what you would need if asked.
• Large unexplained incoming transfers from abroad can draw questions from your bank under anti-money-laundering rules, independent of tax.

This section is a summary of published guidance, not tax advice. If the sums are significant, ask Skatturinn directly or consult an accountant.

What happens in a dispute with a foreign casino?

If a foreign casino confiscates a balance, refuses a withdrawal or closes an account, there is no Icelandic body that can intervene. Neytendastofa (the Consumer Agency) and the Consumers' Association (Neytendasamtökin) can advise but have no jurisdiction over an unlicensed foreign operator, and the courts are not a realistic route for the sums most players are dealing with.

Your route runs through the casino's licensing jurisdiction:

1. The casino's own complaints procedure. Terms usually require you to raise a formal complaint in writing and give the operator a set period, often 8 to 14 days, to respond.
2. The licensing regulator. The Malta Gaming Authority accepts player complaints against MGA-licensed operators once the internal procedure is exhausted. Estonia's Tax and Customs Board and Sweden's Spelinspektionen do likewise for their licensees. Curaçao's new Gaming Control Board has a complaints function, but its track record is short.
3. Alternative dispute resolution. MGA and some other licences require operators to sign up to an approved ADR body, such as eCOGRA or IBAS, whose decisions the operator has agreed to accept.

Chargebacks through your card issuer rarely succeed for transactions you authorised and usually get the account closed.

The lesson is that the licence matters more in Iceland than it does in a country with its own regulator, because it is the only protection you have. Our guide to casino licences explains what each jurisdiction actually requires, and our methodology weights safety and licensing at 25 percent for that reason.

Is regulation coming?

Reform has been discussed for over a decade, and the discussion became more concrete in 2025. No new act had been passed as of September 2026.

The main developments:

• 2021 to 2022: Ministry of Justice working group. Appointed in March 2021, it reported in December 2022. The chair recommended bringing online gambling, including foreign sites, under a licensing system administered by the ministry, with operators supervised by the Financial Supervisory Authority of the Central Bank and paying licence and supervision fees. The group did not reach consensus; the existing operators and other members filed separate opinions.
• 2024: Chamber of Commerce proposal. The Icelandic Chamber of Commerce argued for replacing exclusive rights with operating licences open to any qualified operator, a 22 percent tax on gross gaming revenue and continued tax-free winnings for players, estimating additional revenue of around 4.8 billion krónur a year.
• September 2025: special debate in Alþingi. In a debate requested by Samfylkingin MP Sigurþóra Steinunn Bergsdóttir, Justice Minister Þorbjörg Sigríður Gunnlaugsdóttir set out three options: keep the current prohibition, permit and license foreign operators on conditions, or a middle path of licensing with a tax on net revenue and industry-funded harm prevention. She indicated the neighbouring countries' licensing models deserved serious consideration (visir.is).
• November 2025: health ministry and SÁÁ. The Ministry of Health signed an agreement with SÁÁ to fund treatment for gambling addiction, the first state-funded programme of its kind, and Health Minister Alma D. Möller called for a single national supervisory authority and tighter advertising rules.

The likely shape of any reform, judging from the documents above, is a licensing system for online betting and casino play modelled on Denmark or Sweden, with a gaming tax, a supervisory authority, advertising rules and probably some form of blocking of unlicensed sites. Whether the existing operators keep exclusive rights to lotto and pools is one of the contested points. If a bill is introduced it would need to pass through Alþingi's committee stage, so a change in the law before 2027 looks unlikely, but readers should check the Alþingi website for the current session's bills rather than rely on this page.

Where to get help

Gambling problems are treated in Iceland regardless of whether the gambling took place on a licensed or a foreign site.

• SÁÁ runs assessment and treatment for gambling addiction at Vogur and its outpatient clinics, now with state funding. Information at saa.is.
• Spilavandi (spilavandi.is) offers information, self-tests and guidance for players and their families.
• Rauði krossinn helpline 1717 is free, confidential and open around the clock, by phone or web chat at 1717.is.
• Ábyrg spilun (abyrgspilun.is) is the responsible gambling programme run by the Icelandic licensed operators and lists further resources.

Foreign casinos in our comparison also offer deposit limits, time-outs and self-exclusion, but these apply only to that one site. Our responsible gambling page explains how to use them and what to do if you want to stop.