PayPal May Come Back to US Online Poker Markets

August 14th, 2014 | by Kaycee James

US online poker players may soon be able to make deposits via PayPal. (Image: PayPal logo)

PayPal is the dominant force in online payment processing. That’s true in almost all spheres except for one: the world of Internet gambling, where they’ve lagged behind some of their competitors because they stick to working only at fully licensed sites in regulated markets. Previously, that’s meant PayPal wasn’t an option for Americans playing poker online, but that might be about to change.

PayPal is reportedly considering offering their services in regulated US online gambling markets, a move that would give players a more familiar and reliable option for deposits and withdrawals. That news comes from OnlinePokerReport, which announced PayPal’s intentions via a tweet.

“Sources tell OPR that PayPal will start processing regulated US online #gambling payments in coming months,” they tweeted. “Handful of operators to start.”

PayPal Could Improve Payment Situation

If PayPal does become available for American players in these regulated markets, there could be major benefits for both operators and players. Issues with payment processing have been among the biggest constraints on the growth of online gambling markets in New Jersey, Nevada and Delaware, and PayPal would likely fill a niche that a lot of players could use.

The most commonly tried payment methods, credit and debit cards, have had unfortunately high rejection rates in US online gambling markets. This is due primarily to the fact that banks and other financial institutions have been slow (or unable) to change their policies to approve regulated gambling transactions, while still blocking unlicensed sites. This has led to frustration on the part of casual gamblers who aren’t willing to try several payment methods just to play a few hands of poker.

Other solutions have been launched in some jurisdictions. NETELLER, which was once a major player in the US online poker industry before being targeted by the Department of Justice in 2007, has been licensed to offer banking services at sites in New Jersey and Nevada. Similarly, Skrill (formerly Moneybookers) offers similar options in New Jersey, but is more popular internationally than in the United States.

Popular US Service

But neither of these sites have the kind of brand familiarity in the United States that PayPal enjoys. Ever since their purchase by eBay in 2002, PayPal has become the standard way to make online payments for many Americans. Many individuals and businesses also use the service as an easy way to accept payments over the Internet.

That means many potential online poker players have money sitting in their PayPal accounts right now, or have an easy way to fund such accounts. If PayPal were an option for making deposits at Internet poker sites, some of these players who might otherwise be frustrated could instantly get to the tables and play for real money.

It’s unclear when or where PayPal might first appear as a payment option. However, it will likely take some time before this occurs, as the company would first have to be licensed by each individual state they wish to operate in.

PayPal is already utilized at some online poker sites in the United States, but not for real money gambling transactions. PokerStars and Winamax both offer play money poker sites that allow the purchase of additional chips (which have no cash value) through PayPal accounts.