Recently, a few U.S. online gaming sites have started accepting PayPal. That is happening after more than a decade. The online payments firm had been very quiet about the development. It initially announced very limited details about the historic move. PayPal Holdings, Inc. is a US firm operating an international online payments scheme. The online funds transfer is a smart electronic alternative to the traditional paper techniques such as checks and the outdated money orders. PayPal was formerly known as MoneyBookers. It is one of the leading online payment firms in the world.The firm works as an acquirer. It enables payment processing for subscribed online vendors, auction websites and other online shoppers at a fee.
PayPal was established in 1998, but it carried out its IPO in 2002 to become an entirely owned subsidiary of the eBay later the same year. In the year 2014, PayPal transferred $228 billion in 26 different currencies to over 190 countries. Consequently, it generated overall revenue of $7.9 billion. That was 44 percent of its total profits. Still in 2014, eBay announced its plans to make PayPal an independent firm by mid-2015 and the process was completed in July 2015.
PayPal is now a brand new featured in popular US gambling sites like DerbyGames.com and WSOP.com. Caesars Interactive Entertainment owns WSOP.com and Derby Games is a start-up providing regulated online betting services in the U.S., mainly horse race betting. The iGaming Business announced the initial news of the quiet, but massive platform shift. The mega online payment system has been largely available on most foreign gaming websites, but surprisingly, that was the first instance it is being featured on any U.S. gambling site since its inception. That has mostly been caused by its increased regulation and its 2002 merger with eBay. However, prior to that, PayPal had been used in online gambling transactions when it was an independent entity. During that time, it was the leading transactor in global online gaming.
PayPal almost collapsed when it was first formed, due to gross fraud. However, it retreated and came back with a bang.It has now invested a lot in fraud risk management. The business of online gambling is only second to online porn as far as being targeted by cyber fraudsters is concerned. The firm is looking forward to being an acquirer rather than a potential target, since it has $4 billion in cash in its cash reserves, with no debt. That puts the online money transfer company in a strong position to grow in rips and bounds. Now that the company is independent once more, the gaming transactions will be carried out very efficiently. In fact, the PayPal had been planning this for more than a whole year. Its intentions can be dated back to it announcement in August 2014 that it was planning the move. The move will make online gambling transactions much easier for gamblers. As an online gambler, instead of having to wait for several days to have a check mailed to you, now PayPal can have your money instantly credited to your account.
The most probable reason PayPal does not want the hype is because there is a wide perception that online gambling is a “gray area”. “If you are not legalized in all the 50 states of the US, then it is not even black and white. Currently, online gaming is legal in just a couple of States while the daily fantasy is legal in most. Maybe, PayPal does not want to expose their market status in the American States that forbid online gaming. At the same time, one can note that here is massive upside if online gambling is legalized in some of the biggest American states such as New York and California. Right now, it is a tiny proportion of what it can become. Considering that PayPal is now participating, it is proof enough that it can be a grand opportunity. Online gambling revenue in New Jersey in the month of July 2015 was more than $12 million. That is a pittance when compared to online horse race betting in the U.S, which amounts to slightly over $2.6 billion annually. The two kinds of gambling look like a rounding error when compared to total land-based casino revenue nationally, which clocks more than $70 billion annually.
PayPal’s policy statement emphasizes that it prohibits all online gambling, unless it has accredited a merchant. That means that the firms that have just started accepting PayPal payments were automatically approved by the firm. In its statement, the company said that it was launching a pilot program to incorporate four leading real money gaming operators. That was meant to enable the merchants have PayPal as an alternative way for gamblers to fund their online gaming accounts with the merchants. It launched the pilot so that it can able to comply totally with the ever-evolving laws in RMG in the US. As an international online payment provider, PayPal’s goal is to offer people with safe and simple methods to pay for their products and services.
The PayPal policy statement particularly bans any activity featuring an entry fee or a prize, regardless of whether the result is determined by skill or chance. That covers daily fantasy websites such as FanDuel and DraftKings yet both have been accredited by PayPal. FanDuel said that PayPal processes about half of its total transactions. With that kind of market dominance, there is a massive upside if PayPal can attain a similar grip in other online games. PayPal’s headquarters are located in California at eBay’s North First Street office campus. The firm’s operations base is located in Nebraska, and it started its operations in 1999. Since 2007, PayPal has been operating in the European Union as a bank. The firm’s European headquarters are in Luxembourg while the global headquarters are in Singapore.