Online wallets are a good tool for moving money through gambling websites, and PayPal is the most popular online wallet in the world. It’s good news, then, that it has once again become an option in some online gambling markets, including parts of the US.
After cutting off gambling transactions for several years, PayPal has once again opened up its services to regulated operators. The majority of legal, licensed online gambling sites now make use of PayPal.
Below are some of the basics about using PayPal in connection with online gambling.
Paypal is used extensively across betting, fantasy sports, and online casino/poker platforms.
PayPal also facilitates transactions related to daily fantasy sports. The contests are believed to fall under skill-game laws in most states, although there is a lack of legal clarity in some. Nonetheless, PayPal processes deposits and withdrawals for all DFS sites (such as DraftKings and FanDuel) in all states where they operate.
In 2015, PayPal started processing online poker and casino payments for WSOP NJ, WSOP Nevada and 888 Poker and 888 Casino, as well as Harrah’s and Caesars online casino. It was an important addition to help further differentiate the regulated industry from the unregulated one.
The list continues to grow, too, now including:
To this day, PayPal remains the largest ewallet in the world, both for commercial transactions and those involving online gambling.
Several of the regulated online horse race wagering sites in the US accept PayPal, including:
Read more about online horse betting.
Using an existing balance is arguably the easiest way to deposit to a poker room, casino or sportsbook. But if you’re starting with an empty PayPal account, there are several quick ways to fund it.
An instant electronic check can be drawn from a bank account, and larger transactions are facilitated via wire transfers. European gamblers may also use a credit card or debit card, including the PayPal Extras Mastercard.
The latter is not an option for Americans. Those in the US may not use a card to fund their PayPal account for gambling purposes.
No. Players must create a PayPal account if they wish to use it as a deposit method. It’s a simple process that only takes a few minutes.
It’s also worth noting that many online gambling sites require the user account and PayPal account to be registered with the same e-mail address.
PayPal withdrawal options include electronic check and check by mail. The site also offers a debit card that may be used at most retailers and ATMs.
PayPal will appear as a withdrawal option once a deposit is made using the service.
Online gambling sites typically do not charge a fee, and there is no PayPal fee for using an existing balance or funds transfer from a bank account. PayPal does charge 2.9 percent for transactions using a credit card or debit card.
No. The PayPal account used to deposit at a gambling site must belong to the account holder.
Yes. PayPal has a reputation as one of the very safest ewallets. It’s arguably safer than using a bank account directly, as it provides an additional layer of security between the gambling site and the player’s financial information.
PayPal is available for gamblers in Austria, Australia, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Portugal, Spain, Sweden and the UK.
PayPal only permits gambling transactions in jurisdictions where it is licensed, like Europe. Online gambling sites in Nevada, Delaware and New Jersey are also permitted to use PayPal as a payment option.
The gambling sites available to players outside of regulated markets are, by definition, unregulated. Often located offshore, PayPal does not do business with those sites.
DraftKings and FanDuel are daily fantasy sports sites. Most state laws classify these platforms as a form of skill gaming. Therefore, PayPal’s legal opinion is that processing DFS payments is legal in all available jurisdictions.
Yes. PayPal was once the main ewallet for offshore gaming sites that accepted US players. This included poker, casino and sports betting, processing these payments until late 2002.
The US government began investigating these transactions around this time, citing both the Wire Act and the Patriot Act. The legal pressure was likely a significant factor in PayPal’s ensuing sale to eBay. The new owner paid a $10 million civil fine to clear the slate with the courts.
Under eBay’s guidance, PayPal ceased all gambling transactions for a time.
PayPal was the first major ewallet on the internet, allowing easy financial exchanges between companies and/or individuals.
It quickly became the top choice for online gambling sites that accepted US players, representing a significant portion of PayPal’s total business. Gambling transactions accounted for about eight percent of PayPal’s entire processing operation in 2002.
At the time, PayPal was primarily building a base of customers in North America. That has changed drastically, with PayPal growing into an international giant that processes payments in over 100 countries.
eBay acquired PayPal in 2002, but the company has since split into two separate entities again.
Part of eBay’s interest stemmed from the fact that PayPal is the most popular way to purchase an item on the online auction site.
The company stopped processing online gambling payments almost immediately after the 2002 merger, leaving the US online gaming market with a massive void. Firepay and Neteller stepped in to fill it, and all three of those companies ran into some legal trouble over the following years.
PayPal was an early target for a federal investigation, and it agreed to pay a $10 million civil settlement to dispose of the case. That amount was equal to the estimated profit PayPal made while processing online gambling payments.
PayPal/eBay steered clear of online gambling until 2009 before reapproaching the industry.
This time around, though, it only did business with sites that were fully legal and licensed in the jurisdictions where payments were processed. This generally meant that the UK was the only country where PayPal was available as a deposit and withdrawal option.
Betfair, a sports betting exchange, was the first online gambling site to use PayPal elsewhere in Europe. Maybe not coincidentally, Betfair never accepted US gamblers, even before the UIGEA took hold in 2006. Before that time, virtually every gambling site was transacting in the US.