German gamblers will no longer be able to use their PayPal accounts for online casino gambling purposes after a recent update of the payments giant’s German-language guidelines.
News about PayPal’s updated policies regarding online gambling emerged shortly after Germany launched a crackdown on payments companies working with providers of Germany-facing online casino services.
Under PayPal’s updated guideline 9.1. Prohibited Activities, Germans will no longer be able to use the company’s services “in connection with offers that are not legal in your respective whereabouts, including some online gambling offers.” The updated guideline reads further that “if you are unsure as to whether on not a specific offer is legal in your place of residence, you must ensure that it is legal before using PayPal’s services in connection with the offer.”
The updates are set to come into effect on October 21, 2019. This means that as online casino gambling is prohibited in all but one German state, PayPal will no longer be an available payment option for online casino products.
Crackdown on the Sector
News about PayPal cutting off German online casino payments came a couple of months after the German State of Lower Saxony issued an order to an unnamed payment services provider, urging it to immediately cut ties with any internationally licensed online gambling operators targeting German customers.
The payments company was generally prohibited to do business with operators providing online casino, poker, and lottery betting products on the territory of the country, as these are prohibited under the State Treaty on Gambling. Many believe that the affected payments provider was PayPal, although that has not been confirmed yet.
Last December, major gambling group GVC Holdings announced that “PayPal won’t be available as a payment option for casino product in Germany” across all its brands.
Germany’s Gambling Regulations Mess
Germany has been trying to reorganize its market for seven years now, but the process has hit major set backs that have prevented its progress. PayPal’s recently updated policies in Germany suggest that the country’s lawmakers could this time enforce the State Treaty on Gambling after two unsuccessful attempts in the past.
Earlier this year, the heads of Germany’s 16 states signed the third version of the treaty. However, it needs to be ratified by the end of the year in order to be enforced on January 1, 2020. The treaty extends a so-called experimental phase for online sports betting from mid-2019 to mid-2021. It also removes a previous, highly-contested, cap on the number of sports betting licenses to allow the issuance of more than just licenses.
If the treaty is ratified by the end of the year, German authorities will be able to start issuing sports betting licenses to interested companies early next year. However, operators will have to shut down all their Germany-facing casino operations in order to be eligible for sports betting licenses in the country.
The state of Schleswig-Holstein is the only place in Germany where online casino gambling is legal. Previously issued online casino licenses expired earlier this year, but were reinstated in June until mid-2021, when German authorities hope a permanent gambling regulatory framework that will apply to all states will take effect.
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