Why Has PayPal Withdrawn From Gambling Operators in Some Countries?

PayPal is a convenient method of sending money and issuing payments for various products and services all across the world in different industries, even the gambling and betting industry.

However, PayPal had recently decided to withdraw its services from some gambling operators in some countries.

While thepunterspage.com lists some renowned betting sites that are still operating in collaboration with Paypal, there were several reasons that led to the withdrawal, mainly due to external factors. These include:

Irresponsible gambling

Due to the limitless offers on credit transactions given by PayPal, some compulsive problem gamblers can spend a huge sum of money which is a case of concern. The users get to a point that they go beyond their bank limits which eventually leads them to bankruptcy from the overload of huge debts.

In some cases, students can put in their loans into PayPal and instead use it for gambling. This is quite disastrous as this much overspending can lead to an economic crisis in the long run.

To curb such irresponsible gambling and still maintain its convenience in the market. PayPal withdrew itself from offering a platform to deposit and withdraw funds into gambling sites in some countries.

Source: unsplash.com

Cases of misidentity

PayPal allows people to transfer money to anyone with an email address. The account is usually tethered to a bank account or a credit card. If by any chance, the PayPal balance is zero or not enough to cover the cost, the amount is then directly deducted from the bank account or charged on the credit card. This is quite risky especially if one’s contact details fall into a compulsive gambler. Cases of misindentity tend to arise and thus put PayPal at the risk of losing its credibility in the market world.

Freezing of accounts

Most gambling operators do not regularly check on the credit usage of their users. PayPal can randomly freeze the accounts of the users in case of any suspicious activity. By doing this, they can verify the identity of the holders or question any transactions that might seem to overstep the given guidelines. Since the gambling operators are not very keen on this, it causes a major area of conflict as they cannot seem to be on the same side.

Source: investopedia.com

Complicated laws

In some regions, the laws relating to gambling online are quite complicated, for example in the EU. This makes it hard for PayPal to recognize what’s legal and what’s not at the said moment. This also can be quite confusing for the PayPal providers are they do not know what to work about the state laws to avoid any misunderstanding with the authorities.

Untrustworthy gambling operators

Some gambling authorities sell licenses to anyone with enough money which can put PayPal at risk as they can be associated with gambling sites that offer illegal services. This can bring in friction especially with the government authorities of said countries. It gives a negative general business outlook and credibility to the company.

Source: unsplash.com

Unorthodox betting

A variety of gambling operators offer tips and instructions riddled with gambling and handicapping. This is not favorable to PayPal due to the extra fees charged as they do not allow such merchants in their platform. It’s also the same case for operators who offer intermediaries to hold gambling licenses in the name of easing the process of placing bets. PayPal is also withdrawing from gambling operators who organise forums that facilitate betting between people.

Casino games

In countries where gambling is illegal, PayPal has withdrawn its services to gambling operators who offer in-person and virtual casinos. Games of chance where one randomly can guess an outcome and games of skill where one usually uses their physical and mental capabilities are also not favored in PayPal if gambling is illegal in said country.

Source: unsplash.com

Sports betting and horse racing

PayPal has withdrawn from the gambling operators who include horse racing and individual wavering. The activity itself had attracted a huge number of spectators and bettors. The horse racing prohibited by PayPal includes types of races that ideally revolve around betting between bettors, parimutuel betting, on-course betting, sweepstakes gambling, bookmaking betting, and off-course betting.

Lotteries

PayPal had withdrawn itself from gambling operators who deal with a lottery that mainly involves the sale and purchase of sweepstakes. The lottery option is not functional for PayPal. The distribution of the prize money and other prizes is also not allowed as they need a more personal initiative between the user and the seller.

Source: unsplash.com

Use of game machines

Due to the easy reach of game machines at different outlets, PayPal does not allow the use of gaming machines in its platform. Any machine that a player can readily use to win or lose money is considered to be banned from the site.

Transfer of site funds to user

Some gambling operators usually forward the PayPal fee to the players which are not acceptable. This causes a rift between the said gambling operators and PayPal as the operators do not reach their end of the deal. The operators are supposed to pay the fees themselves because they are the recognized business partners. This would help in maintaining a healthy business relationship as opposed to using back routes.

Source: nexter.org

Poor security policies

In some countries, the policies do not favor the protection of users by PayPal. PayPal generally protects users from fraud as it offers consumer protection policies on a global level. This can be quite cumbersome because, in some countries, this does not apply to those who choose to gamble online.

Limited options

A variety of countries only offer the option of depositing and withdrawing money through PayPal. The other facilities offered by PayPal are restricted as they are not part and parcel of the two options given. The operators also offer market options to residents at a small level and do not include those of the international market.

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