Online gaming comes with its own set of risks, but PayPal appears to be rolling the dice when it comes to the U.S.
After cutting ties with online gaming sites in 2003, PayPal is back in the business of facilitating payments and deposits for Caesars Interactive Entertainment, iGamingBusiness reported. Though there’s been no official word, advertisements for PayPal have started to appear on WSOP.com, the online gaming site for the World Series of Poker.
PayPal originally parted ways with the online gaming sector more than a decade ago when its merger with eBay forced the company to eliminate sources of excessive financial risk. Howard Mason, a financial analyst with SSR, told CNBC that the online gaming industry is subject to the second highest number of fraud attempts, only behind online adult entertainment.
With PayPal’s recent split from eBay, though, the payments service was free to throw its hat back into the online gaming ring. The potential rewards of re-entering the scene are no doubt attractive, as a 2014 report from Morgan Stanley estimated a possible $5 billion valuation for the industry by 2020 if more states legalize and regulate gaming sites. At the moment, only a handful of states have laws on the books permitting online gaming.
Regardless of PayPal’s motives, it’s clear the company is taking it easy on public relations. Without as much as a press release, PayPal’s relative silence on its return to online gaming has some experts scratching their heads.
“My thinking is PayPal may not want attention because there is a perception that online gaming is a gray area,” Andy Frankenberger, a former Wall Street broker and decorated tournament poker player, told CNBC. “… Perhaps PayPal doesn’t want to jeopardize their market status in states that oppose online gaming.”
PayPal is widely used on online gaming sites outside the U.S., but only time will tell if the payments company will be able to re-establish a foothold in stateside online gaming.