Paypal was one of the first ewallets. PayPal started out as an ewallet for Americans that specialized in eBay and online gambling payment processing. eBay eventually acquired PayPal and almost immediately stopped processing U.S. online gambling payments in 2002. This was partly due to an investigation in New York State.
By the time PayPal stopped processing online gambling payments it was only 8% of its total business. Paypal paid a $10 million fine for its online gambling payment processing in 2003 to the U.S. Government. This was in addition to the $200,000 fine paid to the State of New York to settle similar charges.
PayPal centered its business by processing eBay transactions. They also continue to provide peer to peer payment processing outside of the eBay system.
Paypal Processes Non U.S. Gambling Deposits
PayPal reentered the online gambling payment processing business in 2009. This started with an agreement with Betfair, the largest sports exchange on the internet. Paypal now processes payments for many online gambling companies. In addition to Betfair, 888, Paddy Power, BWIN, Ladbrokes, Bet365 and William Hill accept PayPal as a payment option. All of these sites have one thing in common, they do not accept players from the United States.
Paypal’s Business Interests in the USA
Paypal continues to accept Americans as customers, but for the most part these payments revolve around eBay purchases and peer to peer transfers. It is only natural that a majority of Paypal payments are used to process Ebay purchases since Ebay is now the parent company of Paypal.
There is hope for Americans that wish to use PayPal for online poker and other related gaming purchases. Paypal is a favorite for players that enjoy skill games. Many sites that offer skill games such as chess, spades, hearts and other games that are predominantly skill accept Paypal for deposits and withdrawals. WorldWinner and Pogo are sites that accept Paypal for these types of games.
As online poker and other gambling games become legalized and regulated in the United States it seems certain that Paypal will open up in the states as well. Paypal already has a large security department that is needed to investigate deposits made by players and help research fraudulent players. Once online poker and other games are legalized in the U.S. Paypal seems like a perfect fit for the industry’s payment processing. Nevada’s gaming regulations already include payment processing companies like PayPal in their laws. PayPal is likely waiting for the day that they can re-enter the lucrative U.S. online gambling payment processing industry.
Legal Poker Sites in the US Now Accepting PayPal
With the advancement of legal online poker in the states of New Jersey, Nevada and Delaware, it is important to note that PayPal is once again making headlines yet again by accepting terms by most of the major online poker operators in these states to start processing deposits and withdrawals for players in these locales. It is a HUGE step for the company as they hope to enter more online gaming markets down the road, especially with legislation on the horizon for states like California and Pennsylvania.