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Paypal to end gambling protection in several countries 12/05/16
• Paypal removes protection 7 months after rejoining the market

Paypal has announced it is to stop protecting payments made by customers for online gambling transactions in a number of countries, including the US, Canada and Brazil.

The online money transfer giant will amend its Payment Protection policy and User Agreement, with the changes impacting buyer and seller protection, as well as dispute resolution.

Paypal’s updated list of ‘ineligible items’ for protection will include “gambling, gaming and/or any other activity with an entry fee and a prize”.

The move will also impact customers in certain countries that use Paypal for making payments to crowdfunding projects..

“This is consistent with the risks and uncertainties involved in contributing to crowdfunding campaigns, which do not guarantee a return for the investment made in these types of campaigns,” Paypal said, according to the BBC.

US Online Poker and DFS Affected
PayPal was once the biggest processor of online gambling transactions in the world, but it voluntarily withdrew itself from all markets in 2003, due to the then legally gray nature of the sector in most countries.

In 2010, it began accepting gambling transactions again, but only for licensed operators in jurisdictions where the online gambling was fully legal and regulated. Last year it quietly began to offer its services to the regulated US online poker markets of Nevada and New Jersey, and it also processes transactions for daily fantasy sports in the US.

To be clear, the withdrawal of payment protection for online poker deposits is unlikely to have a major effect on the consumer market. Simply put, the regulated online gambling industry with which PayPal now engages is unlikely to run off with anyone’s money anytime soon.

PayPal also added other kinds of transaction to its updated list of items ineligible for Purchase Protection. They are “anything purchased from or an amount paid to a government agency” and “and/or any other activity with an entry fee and a prize.”

The U.S. Department of Treasury began accepting PayPal on, which accepts payments to government agencies in February 2015, while the payment platform started allowing U.S. gambling sites to use it again last September after a 12-year ban. Both developments gave PayPal more revenue streams following its spin-off from eBay, and removing them from Purchase Protection mitigates the company’s exposure to risks.