Paypal enters the online gaming arena

When PayPal was first launched in 1998, it really caught on with those that played games online. This service offered them security and anonymity when playing, though this renaissance never made it to gamblers in the US for long.

As of last year, US gambling sites have begun to take payments via this method which has prompted many to wonder why they hadn’t done this before. The influx of new sites that can be played through PayPal are the first to offer the service in the US in over 10 years.

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When the company merged with Ebay this service was rescinded from gambling sites. Ebay is all about loss and fraud prevention, so didn’t want this new company associated with gambling. It’s not the only shopping app out there, but it is the largest – so what they said in this merger really mattered.

Last year Ebay announced plans to make PayPal an independent venture once more, which has given them the freedom to move back into gaming. This has been done almost silently, as the company inches their way back into the industry site by site. This is purely a pilot scheme as of yet, as the results could be disastrous if rolled out all over the country.

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The reasons for the lack of publicity could be down to the perception in the US that gambling is immoral. Take the recent presidential candidates for example, as some firmly oppose gambling and the affects it could have on the population.

Another reason that this could be a sticky situation for the payment providers is that they’d need to show due diligence to stay in line with the law. It would be up to them to ensure that their players weren’t manipulating the system to make them appear to be in a state with legalised gambling.

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Of course, this is only offered in states with legalised gambling thus far but this could change in the future. As more states toy with the proposition of legalising online gambling, PayPal might be jumping on this trend right on time. They’re already known as the authority on safe payments and as the gambling market expands, so too do their clients.

Right now, they’re hand-picking the casinos that you can use their service on so that there’s no room for unsecure casinos to use them. This is all part of their fraud prevention strategies, which are no laughing matter as the company nearly folded early in their history because of poor fraud prevention.

With more betting and gambling options set to pounce on states that allow it, US citizens would soon be able to take their pick of operators. Certain casinos even offer odds on current events like the Eurovision Song Contest or even who will win the presidency.

As with many forms of gambling, the exact rules surrounding online gambling are murky to say the least. PayPal are skirting the issue with equally unclear terms and conditions, as their current private policy states that they do not support online gambling in the US. Perhaps this needs updating.

How long this will take to roll out, or even if it will be at all after the pilot, remains to be seen but it could be a profitable move for the company.

They also have a foothold in the fantasy sports sector, as they provide transactions for this grey area of gambling. Lately there has been a crackdown on this form of betting in territories that do not allow online gambling, such as New York. This is a dicey situation for PayPal to be in, as they can’t be seen to support any platform that breaks the law.

It could be the first of many of these disputes that their names will be involved in, as casino gaming could have an equally bad effect on their reputation.

About Simon Blish

Writing, drawing, editing - Simon loves it all.