PayPal Returns To Regulated US iGaming Market

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Tuesday, September 22nd, 2015 | Written by Stephen Smith

If you don’t live in Nevada, you may have missed the news earlier this month that WSOP.com has added PayPal as a valid payment and withdraw option to their site. While there were no big announcements at the time, the addition of PayPal to WSOP.com in Nevada is huge news, and last week WSOP.com rooms in New Jersey, and Delaware also added the online financial processor, a move which is set to greatly benefit players. Furthermore, in addition to providing its service to the Caesars Interactive Entertainment (CIE) owned World Series of Poker (WSOP) brand, PayPal has also announced it is in discussions to provide its product to three other iGaming operators, and as the company explained to CNBC recently:

“PayPal is launching a pilot program to support four leading real money gaming operators to offer PayPal as a way for gamers to fund their online accounts with these merchants. As a global payments provider, PayPal’s goal is to give people safe and simple ways to pay for the things they want, so long as we can comply with applicable laws.”

The Return of PayPal

Although many people are heralding PayPal’s arrival at WSOP.com as something new, in actuality PayPal is returning to online poker, not entering the industry for the first time. Up until the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006, PayPal was used for depositing and making withdrawals from online poker sites. Once the law was passed, however, it became illegal for financial institutions in the United States to process these transactions leading to PayPal’s exit. With online poker now legal in three US states since 2013, however, PayPal has begun seizing the opportunity to provide its service for US players once more.

Why Now?

Nevertheless, analysts have questioned the timing of its move, and why it has taken the digital payment giant so long to rejoin the US market. One explanation is that PayPal is mindful of the extra competition that has sprung up recently, with many newer types of online processing options being seen as a threat to the company’s long term growth. This includes Amazon, Facebook, and a number of other e-wallets that seem to be appearing almost on a weekly basis, and as Riley senior analyst, Scott Tilghman, explains:

“Competition abounds and we think the longer-term health of the company will be based on its ability to navigate regulatory processes in order to offer a broader array of traditional banking services within its portfolio.”

As a result, PayPal is currently positioning itself to take advantage of the US iGaming market in the event of the industry spreading beyond the current three regulated markets, to also include much larger states such as California and New York. Nevertheless, only time will tell if PayPal is successful able to re-establish itself back in the USA.

How PayPal Benefits Players

There are a number of ways in which PayPal will benefit online poker players, including:

– Greater Security: Many poker players have concerns about the safety of transactions. PayPal is the largest and most trusted e-Wallet provider in the U.S. and sure to instill confidence in players.

– More Flexibility: With PayPal, players can use winnings to shop online or transfer them to their accounts. Deposits to online poker playing accounts can be paid for with a credit card or with a bank draft.

– Increased Reliability: Many players have experienced problems with their credit cards being declined when they attempt to pay for poker online. Now that PayPal has been made available, the rate of declines are likely to be very small.

– Peer-to-peer Transfer: With PayPal now an option, players can send money directly to one another instantly and with all of the flexibility for payments and withdrawals that PayPal provides.

The Future of PayPal and Legal Online Gaming

It’s doubtful that PayPal’s foray into iPoker payment processing will stop with WSOP.com, and the handful of unnamed iGaming operators it has already mentioned. Industry experts anticipate that when legal online poker begins in California and Pennsylvania, PayPal will be offered as a payment method there from day one, too. Therefore, its seem likely that PayPal is set to continue expanding its payment processing options stateside in the near future.