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Are There Casinos in Reykjavik?
Thu Jul 25, 2024
Tourists from across the globe usually flock to Iceland to see the Aurora Borealis, Myrdalsjökull Glacier Park, Maelifell Volcano, spectacular geysers, or whale watching. However, no one ever goes there to gamble. The Icelandic government prohibits most types of gambling, including land-based and online casinos.
But what about international casinos? How does the government perceive these gambling sites? Continue reading to learn all about Icelandic gambling regulations and where locals can enjoy their favorite casino games with peace of mind.
Legal Landscape of Gambling in Iceland
Icelanders have a long history of gambling that predates the 20th century. There were no specific laws governing gambling at that time, so people flocked to small casinos to play card games. Many participated in foreign lotteries, so the authorities became worried about the wealth leaving the country.
As a result, legislators introduced the first gambling act in 1926 — The Lottery Act, which outlawed all land-based casinos because of concerns about addiction and social consequences. The Act also stipulated that 80% of the revenue must go to the University’s purse.
The government also put a blanket ban on any form of gambling, including participation in foreign lotteries. Gambling activities were only possible when conducted through a state-supported operator.
The Act was amended in 1993 when Congress allowed the University of Iceland to begin operating a monthly lottery. Since then, only five licenses have been issued to operators, each one regulated by a specific law. As outlined in the Lottery Act, legal gambling is generally only permitted through state-supported providers, which only includes the University of Iceland and Islandsspil.
Sports pools, scratch cards, and electronic gambling machines like slots are the only forms of domestic gambling considered legal after the Act was amended again in 1994. However, according to the Act, all the proceeds must go to charity.
A ban on foreign lotteries was lifted in 2004 after European lawmakers raised objections, but only if the proceeds went to a good cause. In 2016, articles 183 and 184 were added to the 1940 Criminal Code, making it illegal for residents to participate professionally in gambling or betting activities. Therefore, whoever attempts to gamble or encourages others to do so will face criminal charges, including a one-year imprisonment.
Land-Based Casinos in Iceland
When it comes to land-based casinos, Iceland has none. In 2015, several bills were introduced to legalize them. This includes the situation when a Progressive Party member, Willum Pór Pórsson, pushed to legalize casinos in the country. He argued that casinos would raise taxes and provide a safe platform to discuss the social and economic effects of gambling in Iceland. However, none of the attempts were successful.
The main problem seems to be that the country allowed Íslandsspil and the University of Iceland to have a monopoly on operating certain types of gambling to fund their activities.
Hence, Iceland’s legal gambling market currently consists of quarterly lotteries, electronic gambling machines, scratch cards, national lotteries, Viking lotteries, and Euro jackpots. Some pubs in Reykjavik and larger towns have a limited number of slot machines, but they are few and far between.
Other issues may stem from the fact that Iceland is far from other places that have brick-and-mortar casinos, and the government is concerned about the addictive behavior of its local population. Therefore, it seems like full-scale casinos won’t come to this neck of the woods any time soon.
What Is the Country’s Stance on Online Casinos?
Currently, the Land of Ice and Fire doesn’t have any state-licensed online casinos and has never attempted to regulate this vertical. The only regulation that pertains to online gambling is the Advertising Act of 2022, which prohibits the promotion of gambling services and activities.
However, that doesn’t mean its residents are not interested in online gambling — quite the contrary. According to reports, approximately 35% of residents have gambled online in the past year.
Iceland doesn’t prevent its residents from joining offshore gambling platforms. In fact, many of these sites accept Icelandic players, who are free to try their luck at playing slots, table games, live dealer games, or whatever they like. No one has ever been prosecuted for using a foreign-based betting site.
Although the iGaming industry is thriving in Iceland, players should be careful when choosing an international online casino since Iceland doesn’t issue such licenses and won’t be able to protect them. Icelanders are advised to stick to licensed operators, preferably those that adhere to the highest standards, including the Malta Gaming Authority (MGA), the United Kingdom Gambling Commission (UKGC), Curacao, Spelinspektionen, and Danske Spil.
Security, game selection, welcome bonuses, customer service, and payment methods are also important factors to consider.
Conclusion — Future of Gambling in Iceland
Judging by how invested the locals are, Iceland’s online casino industry undoubtedly has a bright future. Plus, the Land of Ice and Fire is expected to experience significant growth in online gambling in the coming years, considering that the government could potentially collect over 3 billion ISK (approximately €22 million) in online casino taxes.
Additionally, it is thought that land-based casinos could drive tourism and provide an additional revenue stream.
Although the presence of international online operators is one sign that proper regulation is needed, the legalization of online gambling in Iceland is still uncertain. It is improbable that the government will allow online gambling before regulating land-based casinos.
However, since international operators now collect most of the revenue, the Icelandic government may reassess its priorities about legalizing brick-and-mortar and online casinos. We’ll see how this situation unfolds in the coming years.
