In October 2008 all three major banks in Iceland went bankrupt with serious consequences for Icelandic society. The national currency lost more than half of its value and there was a sharp increase in household debts and prices for domestic goods. Very little is known about the potential effects of economic recessions on gambling participation and problem gambling. This study reports on the results of three national prevalence studies conducted before and after the economic collapse in Iceland. The same methodology and measures were used in all three studies to ensure their comparability and the studies included in total N = 8.249 participants. There was an increase in past year gambling participation which extended across most gambling types. Only participation on EGMs declined significantly after the economic collapse. Past year prevalence of problematic gambling increased but further examination revealed that this increase is most probably explained by an increase in card and internet gambling among young men. Moreover, those who experienced financial difficulties due to the economic recession were 52% more likely to have bought a lottery ticket during the recession compared to those who were not affected financially. Overall, the results indicate that serious national economic recessions have differential effects on gambling behavior.