An economic report published today by the Iceland Review titled “Billions Lost through Foreign Gambling Websites” provides a detailed analysis of the impact of foreign gambling websites on Iceland’s economy.

The report estimates that Icelanders spend approximately ISK 20 Billion ($146 Million, €134 Million) on foreign gambling websites annually. This expenditure results in a significant tax revenue loss of up to ISK 7 Billion ($51 Million, €47 Million), as stated by the CEO of one of Iceland’s six legal gambling operations.

Issue of addiction and lack of oversight

In an interview with Morgunblaeie, Bryndís Hrafnkelsdóttir, CEO of HHí, (pictured above), a gambling operation whose proceeds fund the University of Iceland, expressed concern over the operation of foreign gambling websites like Coolbet, Bet365, and Betsson. In her opinion, these websites operate without public oversight, and their proceeds do not benefit Icelandic society.

Bryndís spoke about the need for authorities to address illegal gambling, which has been allowed to persist in Iceland for too long. She highlighted that gambling addiction is a significant problem in Iceland, especially among young men. Bryndís warned that the problem would not disappear with the introduction of harm reduction for addiction and would only increase if no action is taken. Gamblers would find alternative ways and move from legal gambling to illegal foreign sites, causing money to flow out of the country instead of going towards good causes domestically.

Towards a unique Icelandic approach

HHí, a gambling operation that has been operating for 90 years, funds the building and maintenance of the University of Iceland’s campus. Six Icelandic companies hold a licence for gambling operations in Iceland, and their proceeds all go towards social causes, such as education, youth groups, or sporting activities.

The report focuses on the need for a comprehensive approach to address the issues posed by foreign gambling websites. It calls for stricter regulations, public oversight, and measures to combat gambling addiction. The unique Icelandic approach of directing gambling profits towards social causes presents a model that could potentially be replicated in other jurisdictions to mitigate the negative impacts of gambling. However, further research is needed to fully understand the implications of this model and its applicability in different contexts.

It is important to note that Iceland has made solid progress since the 2008 crisis in restructuring banks and implementing important financial sector reforms. The Iceland Monitor Report indicates that economic growth, i.e., the change in GDP at constant prices, was 6.4 percent and that the estimated nominal GDP was 3.766 billion ISK in 2022. Considering population growth, the growth rate per capita is estimated to be 3.7 percent, altogether highlighting the strength and resilience of Iceland’s economy and the effectiveness of the country’s economic policies and reforms.