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Iceland - online gambling regulations

Published by Stelly | May 16, 2023

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
Every region you visit holds its own mysteries and unique attributes that lure visitors worldwide. Iceland is a magical place known for its Viking history, historical centres and geothermal capital city of Reykjavik.

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, with fewer tourist attractions.

With this online gambling regulations guide, we look at the gambling industry in Iceland, if it's legal and what to expect. Keep reading for all the information you need regarding safe and legal online gambling in Iceland.

History and laws of gambling in Iceland

The history and laws of gambling in Iceland go back a long time and are among the most interesting. It's hard to believe that there was a time when the gambling industry here was thriving before the country moved to ban these types of businesses.

Here is a quick overview of the history and 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. The Act was added to its legislation. 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. That being said, with the implementation of this Act, other gambling activities already taking place throughout the region became illegal.

Then in 1933, an amendment to the Lottery Act allowed the University of Iceland to have its own Lottery. The amendment came with the condition that 8% of the proceeds must go towards the University's purse. It also gave rise to more lotteries which were met for charity purposes. These state-owned lotteries are still available today.

In 1972 the legal lotteries were expanded to include a range of pool-based sports lotteries, 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 within the country. Again there was a clause that came with the approval. All proceeds from the establishments were to go to charity. These machines can still be found in the region today. It was a big step for the country as casinos and bookmakers remained a no-go.

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

And in 2016, there were updates 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. While these laws say that professional gambling activities are illegal, 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 enjoy online casinos in Iceland 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, a wide variety of foreign operators cater to the needs of Icelandic players, providing them with the best online slots, live dealer and sports betting entertainment the industry has to offer. Many even accept Iceland Krona. 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 machines 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 in legislation to 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 minimum and maximum limits.

Are gambling winnings taxable in Iceland?

One of the first things many players generally wonder when playing online casino games is whether or not winnings are taxable. 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?

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?

When it comes to legal online gaming sites within Iceland, you'll find that there are none. Currently, 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 choose one that is licensed and regulated despite not being a locally regulated site. 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 licensed by respected gaming authorities like the UK Gambling Commission, Malta Gaming Authority or the Government of Curacao. Ensuring they implement the latest security measures and responsible gambling tools.

The good news is that here at CasinoWow, 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, ensuring secure gaming, the best promotions, great 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 Government of Iceland 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 take part in any form of gaming available regularly. There are no stats showcasing online gaming activity, but these numbers are thought to be just as high.

While the possibility of legalising online gambling cannot be ruled out, the near future is not looking so bright in this regard. Iceland has always been rather cold towards gambling, with the forms of allowed entertainment being rather limited.

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 accept Icelandic residents and offer the best quality gameplay in Icelandic Krona.

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