How and Why PayPal Left the US iGaming Market


Many Internet users have had PayPal accounts for a long time because of the wide reach PayPal has for both individuals and businesses. The financial information provided by customers is shielded from identifiable third parties. Credit card details are handled by PayPal. There are a number of ways to increase the security of withdrawals, including using PayPal debit cards, electronic checks, and paper checks.

This is the largest platform for processing payments online, and it has a background in online gambling. Let’s first examine the reasons PayPal departed the gaming industry in the first place before examining the results of its eventual return via New Jersey.

Why PayPal Withdrew from the iGaming Industry

PayPal was one of the first eWallets to process payments for US online casinos. It all ended in 2002 when eBay bought it. The Southern District of New York U.S. Attorney’s Office and PayPal and its new parent company, eBay, reached an agreement worth $10 million to put the past of processing payments for offshore online gambling behind the amalgamated companies.

This left a significant void in the US online gaming industry. Neteller and Firepay responded to the problem soon away. Both of these companies experienced legal troubles in 2006 and 2007, respectively.

Even though PayPal wasn’t a part of the merging company at the time of the alleged transactions, a federal inquiry into how it handled payments for online gambling in 2002 was focused on the merged companies. Eastern District of Missouri US Court and the company settled their legal dispute for $10 million. The amount was determined to be equal to the profit PayPal made when processing payments for online gambling during a two-year period.

PayPal’s services are now available to players across the US. Since so many people now use PayPal, using PayPal in NJ online casinos or any other state that regulates iGaming is not a problem. But why did the business get back into iGaming? And why did it take so long, exactly?

The Return of PayPal to iGaming

PayPal avoided the online betting market up until 2009. The United Kingdom was the only country where PayPal was an option for online gaming deposits and withdrawals.

PayPal continued to operate its eBay and person-to-person businesses in the US. It provided payment processing for popular internet businesses. There were several legal applications for skill games on the market.

Accepting payments for fantasy sports was the next big PayPal move in the US. Although there is some debate about the exact number of states that sanction the events, it is believed that skill game regulations apply to up to 45 of them. But in every state where daily fantasy providers operate, PayPal manages payments for almost all services, including deposits and withdrawals.

Following its split from eBay in July 2015, PayPal once again began to operate as a separate entity. The next step was taken by PayPal when it returned to the online gambling industry. Soon after, PayPal and Caesars Interactive Entertainment started accepting payments for online poker and casinos at, along with 888, Harrah’s Casino, and Caesars Casino. The first state that was crucial in PayPal’s comeback was New Jersey, and Nevada was second.