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Paypal and Online Betting

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PaypalLet’s time travel back to September of 1998. What happened that month? Most people wouldn’t be able to come up with anything of note, but it marks the date that both Google and PayPal launched their services.

PayPal was birthed from a merger of Confinity and X.com at the time. Confinity started out as a Palm Pilot payment and a cryptology company created by Max Levchin, Peter Thiel, and Luke Nosek.

X.com was an online financial service and e-mail payment company founded by renown inventor, Elon Musk. Musk is known primarily for his association with planned space exploration to Mars and for his current and prominent position as CEO of Tesla.

Confinity launched the initial PayPal concept in late 1999 just before its merger with X.com and then retained the X.com name for the entire company. That is until survey results prompted the change to PayPal as X.com was considered to be too vague and some considered it pornographic.

The newly renamed PayPal was one of the first e-wallet services entering the market slightly before prominent competitors Skrill, Neteller, and ecoCard and today remains as one of the largest providers of online financial services with over 197 million active global users.

Between 2000 and 2002, the company earned an entry onto the NASDAQ and shortly after the IPO, eBay acquired it for a whopping $1.5 billion in stock. That was $23 per share or 77% over the IPO price. Musk alone received $165 million from that one sale. PayPal then became the payment method of choice with approximately 25% of all auction listings transacted with the relatively new payment method.

In 2005, PayPal acquired Verisign, a payment solution that provided additional security support and helped to expand the overall e-commerce business.

2007 then ushered in partnership with Mastercard and a service a bit different from their current prepaid card. Ten years ago, the PayPal secure card service allowed customers to make payments on websites that didn’t offer the traditional PayPal method by generating a unique one-time-only use Mastercard number that could be input at checkout. It solved the issue of the unavailability of the PayPal offering as well as eliminated the need to have a traditional debit or credit card. That one year yielded PayPal $1.8 billion in revenue.

PayPal has continued to grow and evolve throughout the years adding prepaid cards, launching a merchant services division, acquiring online payments company, Bill Me Later, as well as payment gateway Braintree and Iron Pearl, an engagement software company.

In 2015, eBay completed a spin-off of PayPal into a separate and publicly traded company and currently conducts business in more than 200 countries and 25 currencies.

Let’s now revisit the timeline and see how it relates to PayPal’s involvement in the online gambling industry.

Shortly after its original launch before the turn of the century, PayPal did have an initially successful albeit short-lived partnership with online gambling providers. After the IPO and the eBay acquisition, it pulled out of the industry entirely, at least for a few years.

It has been particularly cautious with its involvement in gambling in the US where new legislation forced out online operators to offshore locations. Payment providers were also held accountable, so PayPal cut ties entirely but still took a financial hit through exorbitant fines imposed by the government.

In 2008, PayPal began to re-enter the online betting industry gradually. Like other e-wallet providers, PayPal’s service is custom made for player account funding so, starting in the UK, the reemergence began with prominent bookmaker William Hill and Betfair the largest online sports betting exchange. The UK is a safe bet as their laws allow for online gambling and William Hill and Betfair were both fully licensed.

PayPal got its feet wet again and then started its expansion for the second time even opting to quietly return to the U.S. through a new agreement with Caesars Interactive Entertainment, Derbygames.com, and WSOP.com. PayPal still enforces strict guidelines regarding using their services for online gambling purposes. In the US, it only allows customers in Delaware, New Jersey, and Nevada to transfer funds to legally approved online bookmakers.

Getting Started

PayPal has a very user-friendly interface and an easy registration process. The premise of PayPal is to take in funds from debit cards, credit cards, or bank accounts and then make the funds available for secure payment issuance by use of a password.

Its transfer funds area pulls up all linked accounts and lets customers move money from their bank account to their PayPal account or their PayPal account to their debit card account or any combination of back and forth cash movement. Additionally, one PayPal member can send a friend or family member, who also has a PayPal account, an instant transfer and without any applicable fees for the account to account action.

PayPal is accepted in worldwide and conducts transactions in 25 currencies. The following are the areas that the PayPal services reach:

Online Sports Betting

As we’ve already mentioned, the partnership between PayPal and online gambling has been a bit rocky. PayPal was burned by the United States shake up and shied away from the industry as a whole for a few years.

Its return to facilitating betting account funding has been unhurried and meticulous. It didn’t just jump into the deep end again. PayPal gradually established new partnerships and is still slowly expanding its reach with online betting. It strictly enforces gambling legislation with its customers and blocks any gambling related transactions to players outside the proper jurisdictions.

The service does fit in well with the industry, though. Both players and operators are looking for fast, easy, and safe ways to conduct transactions in both directions without incurring hefty fees and PayPal fits the bill. PayPal is not as heavily involved as its direct competitors Skrill and NETELLER, but some of the most prominent names in bookmaking like Paddy Power, Stan James, and bet365 have reintroduced the PayPal method within the last eight or nine years.

Fee Structure

To address the e-wallet’s fee structure, we’ll take a look at both the US and the UK as every market is going to be a bit different. However, the main premise is the same:

1. Free – depositing into the PayPal account via bank account
2. Free – sending to family or friends with a PayPal account when your account is funded by bank account or PayPal account holder transfer (same country)
3. Fee – sending to family or friends with a PayPal account but your account is partially or fully funded by credit or debit card
4. Free – buying online or in store
5. Free – receiving from other PayPal family or friend
6. Free – transferring from PayPal to bank account
7. Fee – requesting check payment withdrawal

PayPal’s premise is really more family and friend transfers than anything else and it promotes its fees assuming that most people will be sending to other members that they know. Under that structure, they have the lowest fees of any e-wallet. Others charge for deposits and withdrawals but PayPal makes their money from credit card and debit card transfers, international transactions, and some business-associated purchases.

For purposes of online gambling, if the customer’s PayPal account is entirely funded by a bank account, there won’t be any additional charges. The bookie is another story. If it attached surcharges to deposits and withdrawals then they will stay in place, but PayPal isn’t adding to them or involved in that process.

If the account was partially or fully funded by a credit card or debit card, including PayPal credit, and currency conversion is not required, the costs are as follows:

United States – 2.9% of the transaction about plus $0.30
United Kingdom – 3.4% of the transaction plus 20p

PayPal offers the following currencies for transfer or exchange:

  • Australian Dollar (AUD)
  • Brazilian Real (BRL)
  • Canadian Dollar (CAD)
  • Czech Koruna (CZK)
  • Danish Krone (DKK)
  • Euro (EUR)
  • Hong Kong Dollar (HKD)
  • Hungarian Forint (HUF)
  • Israeli Shekel (ILS)
  • Japanese Yen (JPY)
  • Malaysian Ringgit (MYR)
  • Mexican Peso (MXN)
  • New Zealand Dollar (NZD)
  • Norwegian Krone (NOK)
  • Philippine Peso (PHP)
  • Polish Zlotych (PLN)
  • Russian Ruble (RUB)
  • Singapore Dollar (SGD)
  • Swedish Krone (SEK)
  • Swiss Franc (CHF)
  • Taiwan New Dollar (TWD)
  • Thai Baht (THB)
  • UK Pounds Sterling (GBP)
  • US Dollar (USD)

*For payments being sent to other countries from PayPal accounts fully funded with a bank account:

United States – 0.5% of the transaction amount
United Kingdom – 1.0% – 3.0% of the transaction amount

*For payments being sent to other countries from PayPal accounts wholly or partly funded by debit or credit cards:

United States – 3.9% plus a fixed fee depending on the currency – (0.30 AUD, EUR France – 0.25, EUR outside of France – 0.35, 2.00 MYR, 0.20 GBP)
United Kingdom – 3.4%, 4.4%, 4.7%, or 4.9% plus a fixed fee depending on the currency

*These provide just a glimpse at basic overall costs but the rates and fees change depending on the particular country,

We did note that there was a charge assessed for check withdrawals and US customers have that option for just a $1.50 expense.

How It All Works

The beauty of PayPal is that it’s quick and easy. It’s a simple password input to transfer funds to a betting account. For customers that are already logged in to their PayPal wallet, it should be even easier, if you can believe that. Logged in users should just be able to select PayPal and confirm the transfer with one click.

As far as how much can be transferred, PayPal promotes that there are no limits to the amount of money that can be sent or received. However, in the US anyway, there is a $10,000 cap on each transaction. Some other locations state that customers may have a sending limit so they should check their personal account information to review their restrictions.

The PayPal limit doesn’t necessarily equate to the sportsbook limit as each website states different allowable deposit and withdrawal amounts. However, PayPal users that have been completely verified by identity and bank account have quite a bit of leeway in sending, or better yet, receiving, substantial amounts of money.

As long as a customer has the money already available in their PayPal wallet, the transfers take just a few minutes, if that long. However, if the PayPal account itself requires funding, bank transfers can take 3-5 business days so punters should plan ahead if they plan to use PayPal in conjunction with their betting account.

On the flip side, PayPal transfers back in to the wallet should be just a few minutes, but there will be additional time added due to the book’s policies on cash out approvals. Sometimes they’re less than 24 hours, but others may take several business days to approve cash out on those winnings.


Why to use this e-wallet for sports betting:


Good to Know

PayPal offers some unique services to its customers based on their geographical location. For example in the US and UK, PayPal offers a prepaid Mastercard. The card can be linked to your account for secure transfers back and forth. The card is not available in other locations, though, like Australia where laws are a bit different regarding prepaid cards.

The only drawback of the PayPal card compared to cards offered by NETELLER or Skrill is that the card needs to be funded first. It doesn’t just automatically draw from the PayPal account.

Another exciting program that’s also available in the UK is PayPal Working Capital.

It’s a way to grow a business and is promoted as being faster and easier than traditional methods. This service is available to firms that process payments with PayPal, and it works like a cash advance based upon the past year’s sales. The program could provide for as high as 18% of sales up to £65,000, and the funds are deposited into the business’ PayPal account for withdrawal and use at any time.

PayPal doesn’t have a VIP program like the other e-wallets but does offer special promotions to its prepaid card users. Accounts break down into basic, premier, and business with premier accounts being the ones that have been verified.

Online Betting

PayPal was notably absent from the gambling world for awhile in the early 2000s but is now associated with some of the top online bookmakers like Stan James, 888sport, bet365, Betway, and Paddy Power. Betfair’s betting exchange also offers the PayPal option.

Coral takes their partnership a step further allowing PayPal customers to complete their registration directly through their PayPal account.

The Asian-based books have not yet embraced the concept, but you will find it in Australia through Sportsbet.

PayPal’s fees are very appealing to both the players and the sportsbook. For those books that absorb any of the financial costs for their customers, PayPal is particularly beneficial.

Using this service boils down to practically one click and funds are moved, and it takes away any questions regarding traditional financial methods. Banks don’t automatically approve account debits to online betting sites, so PayPal removes them from the equation and makes it easier for both parties. The other benefit is that money can be moved in both directions, so another method of payout is not required.

Questions and Answers

What are the restrictions for new wallet holders?
PayPal customers must be at least 18 years old and live in a country serviced by this service. PayPal for gambling purposes is strictly regulated, and account holders must reside in an area where it is legal and approved. In the US, that leaves only Delaware, New Jersey, and Nevada. Additionally, new wallet holders must verify their banking information to have the limit restrictions lifted.

If I deposit to a player’s account using PayPal, can I withdraw using another method?
That is up to the sportsbook itself. The ones we’ve looked at that offer PayPal for deposits also provide it for withdrawals, so it’s a good bet that it needs to be used for payouts as well. However, some bookies may be willing to issue a money transfer or check if specifically requested.

Why would I use PayPal if I have to fund my wallet using my bank account or credit card anyway?
It is true that you do need to use a bank account or credit card to fund a PayPal wallet unless you have payments or deposits coming into your account, so you don’t need to fund it additionally. The wallet does provide the convenience of one-click payments, and the fees are relatively small. Online bettors who opt for PayPal-accepted bookmakers will appreciate the convenience of quickly funding their players account as well as having a hassle-free way to withdraw those winnings.


PayPal leaves online bettors with a good news, bad news scenario.

The good news is that it’s an excellent way to transfer money to and from online betting sites. It’s quick and straightforward, and fees are extremely minimal. Some of the biggest bookies around offer this form of payment. Sites like Paddypower.com, Sportsbet.au, bet365.com, betway.com all list PayPal in their cashier area.

So, the bad news is that PayPal isn’t accepted by nearly as many books as competitor services, like Skrill and NETELLER. None of the big Asian providers count it amongst their payment methods despite PayPal’s presence in the Asia Pacific area.

PayPal is a good all around choice for players who are eligible for an account and bet through a site that allows for its use. It can positively impact their bottom line as it has eliminated some considerable fees that other providers charge.

197 million active users should account for something but, as always, we suggest that players do their due diligence and research both PayPal and their chosen sportsbooks first and then figure out the best scenario to save the most money.