What are PayPal’s Policies Towards Online Gambling?

Unknown to many people, PayPal can be used at a number of online gambling and sportsbook sites. Unfortunately, PayPal does not allow most residents of the United States to use this feature, so you have to be in very specific geographical areas to be eligible. It is important to understand that you do not have to be a resident of these areas, only physically at the location. This article will explain how all this works.

U.S. Restrictions

First, we will cover the limited number of possibilities within the United States. To begin with, there is a blanket rule that covers any type of gambling activity for both merchants and PayPal account holders who have declared their residence to be in the United States. You may be in France using French Francs to conduct all your financial transactions, but if your PayPal address is in the U.S. then you will not be able to use PayPal for any type of gambling transaction.

This blanket rule applies to merchants as well. A business can make online gambling services available to non-U.S. PayPal account holders, but the merchant must be in a state or area where gambling activities are not illegal. The legal term is “jurisdiction” and it may go beyond the geographical location and include areas where the United States government can legally enforce its laws. If a merchant meets the jurisdiction requirement, it cannot make its services available to any U.S. resident.

However, as with most rules, there are exceptions made by PayPal. Regarding the merchants, a merchant can be approved by PayPal under certain conditions to conduct gambling activities. PayPal’s definition of gambling activities is detailed below, but to keep things general for now you can understand it to basically cover all online casinos, poker sites, and sportsbook wagers. Once approved, a merchant can receive payments from account holders online, by wire, or even in person. When it comes to operating an online casino, PayPal blocked the possibility of account holders physically going into the merchant’s place of business and depositing cash into an account, then going online to play.

For account holders, you may want to know an important but easily overlooked fact about PayPal’s policies. You cannot use your account to pay off gambling debts, even those incurred that have nothing to do with online gambling. The consequence will be to have your account privileges revoked and your account closed.

For people who have declared the United States as their primary residence, there are three states that have made online gambling legal – Nevada, New Jersey, and Delaware. If you are physically within the borders of any of these three states you can legally gamble online. But PayPal still advises its customers to act with caution when using their account to gamble online as there are still illegitimate businesses who are out there to scam you.

For example, sites like 888poker will offer you specific instructions on how to deposit, play, and withdraw using PayPal. You should be wary of any site that does not have specific instructions or disclaimers regarding the use of your PayPal account. If the website does not have them it could mean the business is not a registered merchant with PayPal and might be illegal.

The legitimate online gambling sites will usually ask you to install a program that can identify your physical location, even if you are using a VPN. Once verified as being located within the state’s borders, you can make your deposit and start playing. Remember, you do not have to reside in the state, just be physically present in the state.

However, there is also another significant change in the law that affects PayPal account holders. In May of this year the U.S. Supreme Court voted 6-3 to strike down the Professional and Amateur Sports Protection Act. By this court ruling, individual states are now allowed to make their own laws regarding sports gambling. As of this writing, those states are:

  • California
  • Connecticut
  • Delaware
  • Illinois
  • Indiana
  • Iowa
  • Kansas
  • Kentucky
  • Louisiana
  • Maryland
  • Michigan
  • Mississippi
  • Missouri
  • Nevada
  • New Jersey
  • New York
  • Oklahoma
  • Pennsylvania
  • Rhode Island
  • South Carolina
  • West Virginia

Before continuing there are a few cautionary notes. First, these states have decided to allow betting on sports, not general games of chance. Second, whether you can place your wagers online varies from state to state. Finally, you must reside in the state to be able to take advantage of the new laws. This list of states each have their own restrictions for making sports bets, so check with your state’s specific laws to find out whether you can use your PayPal account without violating its Terms and Conditions. You may also want to contact PayPal customer service before trying to use your account to make wagers.

List of Gambling Activities

As you scan the list below, it is important to understand that the issue is not even whether the gambling activity is legal in the jurisdiction where you are located, but whether the merchant is one that has been approved by PayPal. If not, you have violated the Terms of Use.

  • Games of chance and games of skill –If you have to pay an entry fee with the possibility of winning a prize, it is prohibited by PayPal.
  • Casino games – This includes just about everything a casino has to offer
  • Sports books or sports betting – The two categories are in effect with the current terms, but expect there to be a modification.
  • Horse or greyhound racing – Includes Off Track Betting.
  • Person-to-person betting
  • Lottery tickets – You can’t buy them online with PayPal unless the State is an authorized merchant.
  • Gaming machines – Those slot machines often found in bars
  • Gambling-related ventures – This is interesting. PayPal can choose to prohibit transactions if you are paying for gambling advice or using your account to give money to someone else to place a bet. Also, organized (online?) forums where person-to-person betting is taking place.

Outside the U.S.

Most European countries have no online gambling restrictions regarding the use of PayPal cards or accounts. You are warned by many casinos that making a deposit using your PayPal account does not automatically make the money immediately available. It may take as long as a week to verify your account and authorize the deposit. Even after going through the approval process, a deposit you make with PayPal may not be available for between 1 and 3 days. And then there is the caveat that by using your PayPal account you forfeit any potential welcome bonus, a key motivator for choosing an online casino. Unless there are specific country restrictions on online gambling, you PayPal card or account is just as useful in the U.K. as in Gibraltar.


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