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PayPal Opens Door to Gambling in US

PayPal rival Skrill, formerly called Moneybookers, has been providing online payment solutions to the gambling industry for over 10 years. Now it looks like PayPal wants a piece of the action in the U.S., where it had prohibited its service to gambling operators.

An EcommerceBytes reader pointed us to an article on Poker News. “Several years ago,” the reader said, “as a division of eBay, PayPal changed their policy and stopped allowing users to complete payments to gambling related web sites.”

“Internet gaming has changed significantly since PayPal withdrew from that market,” he continued. “Online casinos have been legalized in New Jersey, Nevada and other jurisdictions, and poker is now viewed more as a game of skill as opposed to “gambling.””

The source of the Poker News story, iGaming Business, said a Nevada website has become the first US-licensed online gaming operator to offer PayPal as a payment option. World Series of Poker (WSOP) has a page here explaining to users how to use PayPal to make a deposit in their account.

“PayPal is widely available on European igaming sites but the US launch on Caesars’ domains is the first time it has been made available to US players,” according to iGaming Business, which said PayPal would also become available to New Jersey customers through CaesarsCasino.com, HarrahsCasino.com and WSOP.com websites.

PayPal had exited the online gambling payment processing business in November 2002, a month after eBay acquired it – approximately 6% of PayPal’s revenues in 2002 had been derived from online gambling payment processing. A year later, eBay settledwith US government over charges that PayPal’s services to gambling merchants in 2001 and 2002 had violated the Patriot Act.

“I am “betting” that PayPal will expand their business and once again allow payments to legal online casinos just as soon as they realize they need another source of revenue,” our reader predicted.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.