The Icelandic government have a tough stance on gambling with most types being deemed illegal. However no one from the country has ever been prosectured from using a foreign based betting site online… that we are aware of.
That makes Iceland somewhat of a grey market for online betting… many of the top online bookmakers are currently open to accepting Icelandic customers simply because none of the countries current legislation documents rules surrounding gambling online specifically.
The key facts on how gambling works in Iceland are listed below along with all important laws and legislation’s. You’ll also find a list of betting sites people from Iceland currently use online.
Key Facts: Online Gambling In Iceland
- Most forms of gambling technically illegal since 1926.
- Lottery, bingo, slots and sports betting legal if operated on not for profit basis.
- No legal land based gambling exists within the country.
- Overseas providers legal with a license.
- No legislation specifically for online gambling and many gamble online at overseas providers.
Best Icelandic Betting Sites
The following is a list of the best betting sites for residents of Iceland:
Gambling Legislation, Laws & Legality
Complicated and confusing situations regarding the legality of gambling in many countries are explained by the multitude of different pieces of legislation which are passed over the course of many years. The following timeline covers those main items of legislation in Iceland:
1926 – The Lotteries and Tombola’s Act
It was all the way back in 1926 that the first legislation was passed in Iceland to make all forms of gambling illegal. That legislation was the Lotteries and Tombola’s Act, but it wasn’t long before the first legal exception was made to allow for gambling of one form or another.
1933 – The University of Iceland’s Lottery
In 1933, just seven years after the passage of the Lotteries and Tombola’s Act, the University of Iceland devised its own lottery.
This would have been illegal under the existing legislation, so the act was relaxed to allow the lottery as long as 80% of the profits went toward running the university. This paved the way for Iceland’s policy of allowing some forms of gambling for altruistic or charity purposes, which still persists today.
1972-1986 – More Legal Lotteries
In 1972, a further loophole was included in Icelandic Law which allowed for pools based sports lotteries to be run. The first such sports lottery was launched five years later, whilst a general state lottery was then introduced in 1986. The reach of these organisations were extended gradually and today, as an amalgamated entity, they offer legalised online sports betting, lotteries and bingo.
1994 – Slot Machines
It was in 1994 that slot machines were legalised in Iceland, assuming that the profits from the operation of the machines went to charity. This represented the first and to date only real concession toward land based gambling being allowed in the country, with casinos and bookmakers remaining illegal.
2016 – Criminal Code
Iceland’s currently relevant and active Criminal Code was first passed in 1940 but has been amended many times since. Articles 183 and 184 of the code deal with gambling and state that:
It is a punishable offence to engage in gambling and betting on a professional basis, to encourage others to participate in these activities and to derive direct or indirect income from having the activities take place on one’s premises.
Gambling thus still remains technically illegal in Iceland apart from the few exceptions which we have already mentioned. Those articles of the Criminal Code, however, do not specifically relate to overseas providers of online betting or gambling services and neither do any other pieces of legislation.
Are Players Taxed On Winnings?
Due to Articles 183 and 184 of the Icelandic Criminal Code (as described above) professional gambling is illegal in Iceland. What that means is that according to the Icelandic government gambling cannot be a profession and therefore is not liable for income tax.
As such, gambling winnings in Iceland are not liable for any kind of tax and unless there is a major sea change in government policy, this doesn’t look likely to change any time soon.
Recommended Deposit Methods
It should be remembered that Icelandic law does make online gambling illegal apart from through the state lottery run websites which we have discussed. Many Icelandic residents, however, do use overseas based online bookmakers and gambling providers due to the fact that Icelandic authorities have little jurisdiction over their sites and do not prosecute punters for using them.
Due to the somewhat murky nature of doing so, however, punters tend to like using e-wallet services like Neteller or Skrill as these allow them to deposit to sites without the names of the site appearing on their bank statement.