As popular an online payment method as PayPal has become in the last ten years, the company now owned by eBay hasn’t always been popular with online gamblers. To say that PayPal is widely used at online casinos in SA is sort of a misnomer, for while bettors can certainly get money from a PayPal account into an online casino account, it isn’t always a “direct” transaction. But first, a little history:

Before the passing of US legislation attempting to ban online gambling (the UIGEA), PayPal was being extensively used at online casinos. To be more precise, it was actually three years before the UIGEA – shortly after PayPal was acquired by eBay in October, 2002 – that the online payment processor announced it would cease facilitating deposits at internet betting sites (not just online casinos). The very next year, PayPal Casinos in South Africa disclosed in a filing with the U.S. Securities and Exchange Commission that it was being investigated by the U.S. Attorney’s Office – largely spearheaded by the U.S. Attorney for the Eastern District of Missouri.

While PayPal claims it acted in good faith and did not violate the USA Patriot Act and antiquated Wire Wager Act, the company nonetheless reached a $10 million settlement agreement with the U.S. Department of Justice. The agreement was allegedly based on revenue earned directly from online gambling transactions in 2002, which PayPal said accounted for 6% of the company’s gross revenue that year. Considering that eBay bought PayPal for $1.5 billion, 6% goes to show just how much online gambling business was actually being done with U.S. residents in 2002. In many ways, the settlement with PayPal Casinos South Africa helped serve as a benchmark for the growth of the online gambling industry in Africa. Look at South African Online Casino directory

And even though PayPal dropped out of the gaming business, there was nothing stopping the continued growth of an industry that is now estimated to be worth $150 billion worldwide. Other eWallets, like Neteller, picked up the slack, but just like PayPal, soon faced their own battles with the U.S. government. Needless to say, PayPal still does not allow U.S. account holders to make transactions at internet betting sites. However, as mentioned earlier, U.S. online casinos continue finding ways to help bettors use PayPal funds to make wagers. One of the more popular ways – if not the only way – is to fund another third-party eWallet (most commonly, the Wired Plastic card through VISA prepaid card vendors) then using the newly funded card to deposit directly into an online casino account.

PayPal Casinos in Europe

As for the European online gambling industry, which is becoming increasingly regulated as more countries follow the lead of Great Britain in liberating their gambling laws (post 2005), PayPal is just beginning to once again charter the internet betting waters. 2010 marked the year of PayPal’s reentrance into the gaming industry, with the highly reputed 32Red Casino and Ladbrokes becoming the first PayPal online casinos since 2002. Bodog has also reportedly begun to offer PayPal for non-US customers. Please note that use is currently limited to players residing in the UK, Ireland, Austria, Italy, Swden, Denmark and Portugal.

The benefits of using PayPal Casinos in SA to fund a real-money betting account are manifold. Firstly, there are no fees on deposits, nor for withdrawals. Withdrawal requests are process within 24 hours and are instantly available once hitting a PayPal account, which only takes from 3-5 days. Essentially, PayPal is as convenient and secure as eWallets get.

And with that, it will only be a matter of time before even more Euro online casinos begin offering PayPal as a deposit and withdrawal method. If and when the U.S. online gambling market becomes regulated, PayPal will likely return to this market as well.