Is Gambling Legal in Iceland? Laws & Regulations Explained 2025

Key Information

Last Update 2025

Regulatory Authority Icelandic Ministry of Justice

License Cost Varies

Regulation by Activity Type

Casinos Prohibited

Online Casinos Prohibited

Betting Prohibited

Online Betting Prohibited

Lotteries Regulated

Poker Regulated

Highlights

Gambling in Iceland is strictly regulated, with a state-controlled monopoly dominating the market.
Only six licensed entities are allowed to operate, and all must direct proceeds to social causes.
There are no legal, licensed domestic online casinos; Icelanders often use unregulated foreign sites.
The legislative framework allows only narrowly defined forms of gambling, mainly lotteries and betting.
Private sector gambling operations are not permitted under current law, limiting consumer choice.
Taxation and profits from legal gambling are earmarked for public welfare and charitable initiatives.
Calls for reform are ongoing, with industry groups urging Iceland to adopt a modern licensing regime.

Legislation

Primary Legislation

Gambling in Iceland is governed by a strictly regulated legal framework that permits only a limited range of gambling activities. The core structure is based on national legislation that narrowly defines which forms of gambling are allowed. The main laws include:

The Lotteries Act – This act sets out the legal basis for all lottery activities in Iceland, including state-run lotteries and charitable lotteries. It defines what constitutes a lottery and establishes the conditions under which they may operate.
The Act on Private Lotteries – This legislation governs the organization of private lotteries, ensuring that any such activity is strictly controlled and must serve charitable or social purposes.
The Act on Gambling Machines – This law regulates the operation of gambling machines, restricting their use to specific authorized entities, and outlining the requirements for their management and oversight.

Overall, Icelandic law prohibits most forms of gambling, except for those expressly permitted by these acts. The legislation is designed to ensure that gambling remains limited, socially responsible, and primarily directed toward supporting public or charitable causes.

Regulatory Authority

Oversight and enforcement of gambling laws in Iceland are handled by designated government bodies. The primary regulatory authority is:

The Ministry of Justice – This ministry holds the overarching responsibility for supervising and enforcing gambling legislation in Iceland.
Specialized Committees and Agencies – Certain operational aspects, such as the administration of state lotteries or regulation of gambling machines, are managed by committees or agencies appointed by the government and operating under the supervision of the Ministry of Justice.

These authorities are tasked with ensuring compliance with the legal framework, monitoring authorized gambling activities, and safeguarding the integrity and social responsibility of permitted gambling operations in Iceland.

License Types

Types of Gambling Licenses Available in Iceland

Iceland operates a highly restrictive gambling licensing system. Only a small number of specific entities are permitted to offer gambling services, and these are primarily limited to charitable and social organizations. The main types of licenses currently available are:

Lotteries: Licensed to select charitable organizations and the state lottery (Íslensk Getspá/Getraunir).
Sports Betting: Offered through the state monopoly and a few authorized entities, primarily for fundraising purposes.
Bingo and Raffles: Permitted only for non-profit and charitable organizations under strict conditions.

There are no licenses available for private commercial operators or for online casino platforms within Iceland. Online gambling is not licensed domestically; Icelandic residents often use offshore sites, which are not regulated or licensed by Icelandic authorities.

Application Process for Gambling Licenses

Licenses are granted by the Ministry of Justice or other designated government bodies.
Applications are only accepted from eligible organizations, typically non-profit, charitable, or state-affiliated entities.
Applicants must submit detailed documentation outlining the purpose of the gambling activity, its expected social benefits, and plans for proceeds distribution.
There are no open calls or processes for private or commercial operators to apply for gambling licenses.

License Duration, Renewal, and Eligibility

Licenses are generally issued for a fixed period, often one year, but the exact duration may vary depending on the type of activity and the issuing authority.
Renewal is possible upon review, provided the organization continues to meet all requirements and has complied with regulations during the previous period.
Eligibility is strictly limited to organizations whose primary purpose is charitable or social welfare; commercial entities are not eligible.

Licensing Costs, Fees, and Financial Requirements

Application and licensing fees are set by the relevant government authority and are generally modest, reflecting the non-commercial nature of the permitted activities.
There may be additional administrative costs, such as fees for background checks or compliance monitoring.
Organizations must demonstrate that proceeds from gambling activities will be used for approved social or charitable purposes.

Key Requirements for Obtaining and Maintaining a License

Applicants must be registered non-profit or charitable organizations, or state entities.
Detailed plans for the use of gambling proceeds must be submitted and approved.
Strict financial reporting and transparency requirements apply; regular audits may be required.
Compliance with all operational, advertising, and player protection regulations is mandatory.
Failure to comply with regulations or misuse of proceeds can result in license suspension or revocation.

Summary Table: Iceland Gambling Licensing System

Activity Type	Who Can Apply	Application Process	Duration	Fees	Renewal
Lotteries	Charitable/state orgs	Formal application to Ministry	Typically 1 year	Modest/admin fees	Yes, upon review
Sports Betting	State monopoly/charity	Restricted, by invitation	Varies	Low/admin fees	Yes, if compliant
Bingo/Raffles	Charitable orgs	Application with social benefit plan	Event-based/short-term	Low/admin fees	Event-based

There is currently no open, commercial licensing regime for gambling in Iceland. All licenses are reserved for charitable or state purposes, with strict eligibility and operational requirements. Private operators, especially for online gambling, cannot obtain a license under the current system.

Gambling Tax

Tax Rates for Gambling Operators in Iceland

Gambling operations in Iceland are strictly limited, with only a few authorized entities permitted to offer legal gambling products. These are primarily state-sanctioned lotteries and charitable gaming operations. There is no open licensing regime for private or commercial gambling operators, and online casino operations are not licensed domestically.

Type of Gambling	Tax Rate	Tax Base
Lotteries (including National Lottery)	Varies by entity; typically, proceeds must be allocated to social causes	Gross Gaming Revenue (GGR) or Net Proceeds
Charitable Gaming (e.g., bingo, raffles)	Proceeds must be used for approved charitable purposes	Net Proceeds after expenses

Basis for Taxation

For state-sanctioned lotteries and charitable gaming, taxation is not applied as a standard corporate or gambling tax. Instead, the law requires that a defined percentage or all net proceeds from these activities are allocated directly to social, cultural, or charitable causes.
There is no explicit gambling tax rate applied to private operators, as such operations are not legally permitted.

Tax Reporting and Payment Requirements

Authorized gambling entities must keep detailed records of all revenues and expenses related to their operations.
Regular financial reports must be submitted to the relevant government oversight body, detailing the calculation and allocation of proceeds to designated causes.
There are no standard gambling tax returns or payment schedules as seen in open-licensed markets; instead, compliance is monitored through direct oversight and financial audits.

Tax Incentives, Exemptions, and Special Provisions

All authorized gambling activities must allocate proceeds to social, cultural, or charitable purposes as a condition of their operation. This serves as both a regulatory requirement and a de facto exemption from standard corporate taxation on gambling profits.
There are no tax incentives for private gambling operators, as such entities are not permitted under current law.
No special provisions exist for foreign or online operators, as these are not recognized or taxed under Icelandic law.

In summary, Iceland does not impose conventional gambling taxes on operators. Instead, the taxation system is based on the mandatory allocation of proceeds to public interest causes, with strict oversight and reporting requirements for the few authorized entities allowed to operate.

Prohibited Individuals

Age Restrictions and Identification Requirements

The minimum age for participation in legal gambling activities in Iceland is 18 years. Operators are required to verify the age and identity of players before allowing them to participate in any gambling activities. This is enforced to prevent underage gambling and ensure all participants meet the legal requirements.

Prohibited Activities and Game Restrictions

Most forms of gambling are either banned or heavily restricted in Iceland.
The only legal gambling options are state-sanctioned lotteries and certain charitable betting activities.
Online casinos and most other forms of online gambling are not permitted to operate within Iceland’s borders.
Private and commercial gambling operations, including casino games, poker rooms, and slot machines (outside of state-approved venues), are prohibited.
Unlicensed gambling activities, including those offered by foreign or offshore operators, are not legally recognized or protected.

Advertising and Marketing Limitations

Advertising of unauthorized gambling services is strictly prohibited.
Operators are not allowed to market or promote gambling activities that are not explicitly permitted under Icelandic law.
Marketing communications must not target minors or vulnerable groups, and must avoid misleading claims about winning chances or the nature of gambling.
Promotion of offshore or unlicensed gambling platforms is not allowed.

Responsible Gambling Requirements and Player Protection Measures

Operators of legal gambling activities must implement responsible gambling measures, including providing clear information about the risks of gambling and resources for problem gambling support.
Self-exclusion options and limits on participation are required for state-sanctioned gambling products.
Information about responsible gambling and support services must be prominently displayed at all points of sale and on official websites.
Operators must monitor for signs of problematic gambling behavior and intervene when necessary.

Geographic and Location Restrictions

Physical gambling venues are limited to those authorized by the state, such as locations for state lotteries or charitable betting.
No commercial casinos or betting shops are permitted to operate in Iceland.
Online gambling platforms are not licensed to operate from within Iceland, and local access is restricted to state-approved offerings only.
Participation in unlicensed or offshore gambling activities occurs at the player’s own risk, without legal protection or recourse.

Timeline

Year/Date	Event
1926	The first legal form of gambling is introduced in Iceland with the authorization of lotteries for charitable purposes.
1933	The Icelandic National Lottery (Íslensk Getspá) is established, formalizing state involvement in lottery operations.
1972	Legislation is enacted to regulate bingo and other small-scale games for fundraising by non-profit organizations.
1994	Horse race betting is legalized and regulated, further expanding the scope of permissible gambling activities.
2002	Slot machines are introduced under strict state control, operated by licensed charitable organizations.
2016	Calls for reform intensify as the popularity of unregulated online gambling grows among Icelandic residents.
2024	Debate over the monopoly model and potential licensing reforms gains momentum, with increased scrutiny from European regulatory bodies and industry groups.

Requirements

Software Certification and Technical Standards

All gambling software used by licensed operators in Iceland must comply with strict technical standards to ensure fairness, randomness, and transparency of gaming outcomes.
Software platforms must be tested and certified by recognized independent testing laboratories that verify compliance with national and international gaming standards.
Technical systems must include mechanisms to prevent manipulation, fraud, and unauthorized access to gaming operations.
Operators are required to implement robust systems for monitoring and recording all gaming transactions and activities in real time.

Data Protection, Privacy Measures, and Server Location

Operators must adhere to stringent data protection protocols, ensuring all personal and financial information of players is securely stored and processed in accordance with Icelandic and European data privacy regulations.
Encryption of sensitive data, both at rest and in transit, is mandatory to prevent data breaches and unauthorized disclosures.
Technical infrastructure, including servers, must be located within jurisdictions that comply with Icelandic data protection requirements, or operators must demonstrate equivalent levels of data security if servers are located abroad.
Comprehensive access controls and regular security audits are required to safeguard player data from internal and external threats.

Anti-Money Laundering (AML) and Know Your Customer (KYC) Procedures

Operators are required to implement robust AML systems capable of detecting, reporting, and preventing suspicious transactions in real time.
Mandatory KYC verification procedures must be in place to authenticate the identity, age, and residency of all players before allowing participation in gambling activities.
Operators must maintain detailed logs of all AML and KYC checks, including documentation of customer identity and ongoing monitoring of player activities for unusual or high-risk behavior.
Automated tools for transaction monitoring, risk assessment, and reporting of suspicious activities to relevant authorities are required as part of the technical solution.

Financial Reporting, Auditing Standards, and Record-Keeping

Operators must maintain comprehensive, accurate, and tamper-proof records of all financial transactions, bets, payouts, and player account activities.
Regular financial reporting to regulatory authorities is required, with reports generated using standardized formats and submitted within specified timeframes.
All gaming and financial records must be stored securely for a minimum period as defined by regulatory requirements, and must be readily accessible for inspection and audit purposes.
Independent external audits of financial and operational systems are mandatory to ensure ongoing compliance with regulatory standards.

Technical Implementation Requirements for Responsible Gambling Tools

Operators must integrate technical tools that enable players to set deposit, loss, and session limits directly through the gaming platform.
Self-exclusion mechanisms must be available, allowing players to voluntarily block themselves from accessing gambling services for defined periods.
Automated systems must be in place to detect and intervene in cases of problematic gambling behavior, including real-time monitoring and player notifications.
All responsible gambling tools must be easily accessible and prominently displayed within the user interface of the gambling platform.

Sources

Primary Regulatory Authorities

District Commissioner in South Iceland – Responsible for licensing and oversight of lotteries and certain gambling activities in Iceland. Contact details are available on the official government website.

Legislation Resources

Government of Iceland – Lotteries and Gambling – Official portal for information on gambling and lottery legislation, licensing, and regulatory guidelines.