Players in Iceland Spent €127 Million
The analytics company Yield Sec, commissioned by the university lottery Happdrætti Háskóla Íslands, conducted a study of the local iGaming market, tracking Icelanders’ activity on 561 illegal websites in Q1 2025, including the use of cryptocurrencies and foreign cards that are not captured by official statistics.
Annual spending by Icelanders on offshore iGaming websites is estimated at €242 million, which is three times higher than the justice minister’s estimate. In the first half of the year alone, spending reached €127 million.
Key Findings of the Study
- €127 million — spent on offshore iGaming sites in H1 2025
- €242 million — projected spending for the full year 2025
- 80% — share of offshore operators in total volume
- 56% — of the population interacted with iGaming content, including minors
The Icelandic minister of justice had previously estimated annual spending at €67–81 million, but the actual figures turned out to be significantly higher. Yield Sec CEO Ismail Vali linked the growth of the shadow segment to the lack of online regulation.
Scale of the Illegal Market
Offshore Sites and Capital Outflows
According to the study, Icelanders interact with nearly 600 foreign unlicensed websites. A substantial share of funds flows out of the country through online betting, which is available around the clock.
Official statistics only reflect transactions made via domestic bank cards. According to the national statistics office, such transfers are expected to total around €148 million in 2025. However, transactions made via cryptocurrencies and foreign cards are not included in these figures.
| Indicator | Amount |
|---|---|
| Q1 2025 | ISK 9.8 billion |
| Q2 2025 | ISK 9.1 billion |
| Total for the year | ISK 36 billion |
Balance Between Legal and Offshore Segments
80% of the Market Outside the Country
According to Yield Sec’s estimates, 80% of bets placed by Icelanders go to foreign websites, while only 20% are placed with licensed domestic operators. Under Icelandic law, revenue from legal operations is directed to social and charitable causes.
There are six officially licensed companies operating in the country, including Happdrætti Háskóla Íslands, Íslandsspil, and Íslenskar getraunir. At the same time, foreign sites continue to accept payments without paying local taxes or fees.
Online Advertising and Public Involvement
Social Media and Icelandic-Language Access
Some foreign websites advertise through social networks and video platforms and also offer Icelandic-language interfaces. Public figures take part in promotion by using branded clothing and visual materials.
According to the Yield Sec study, 56% of the population in the first half of the year came into contact with gambling content in one way or another — from viewing ads to registering and placing bets. This figure also includes minors.
Position of Regulatory Authorities
Police and Tax Data
Tax authorities note that betting income is subject to taxation. Over the past five years, 14 cases related to gambling violations have been referred to the police. None of these cases progressed to a full investigation.
Some reviews of foreign websites were discontinued due to a lack of sufficient evidence.
Yield Sec’s Commentary
Assessment of Scale and Risks
According to Ismail Vali, the annual turnover of the betting market in Iceland is about $300 million. The company states that it uses assessment methods that take into account user activity, betting volumes, and payment sources with minimal margin of error.
It is also noted that funds generated through illegal websites do not return to the domestic economy and are used outside the social sector.
Approaches to Changing the Situation
Control of Advertising and Payment Infrastructure
Yield Sec emphasizes that the main focus should be on controlling advertising channels, hosting platforms, payment services, and content distribution channels, rather than targeting users themselves.
Examples are cited of countries where, after measures were introduced, the offshore share fell from more than 90% to 50% in less than a year.