PayPal No Longer Accepting German Online Gambling Payments

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PayPal No Longer Accepting German Online Gambling Payments ( Click to Enlarge )

PayPal will officially pull out of offering online gambling payments in Germany come October after some twists and turns in an ongoing legal battle to try to get the industry regulated in that country. This is yet another situation where a lack of regulation is hurting players in Germany.

The Issue With German Online Gambling

Europe has been a place in general known for regulating the online gambling industry on a country-by-country basis. While that’s been great for most players, and the coffers of most of those countries, not every area has had the same luck.

This applies to Germany, which has still yet to regulate any type of online gambling on a national level.

While they’re missing out on revenue and trying to prevent players from doing something that they’re simply going to do anyway, an announcement has come out that PayPal will no longer be processing payments for online gambling in the country.

This policy change will kick in starting in October 2019, and it’s yet another negative consequence for players as German politicians refuse to do what needs to be done to protect players in a real way instead of paying lip service to the concept.

The Schleswig-Holstein Situation

Schleswig-Holstein is the only state in Germany that has licensed the online casino industry. They have outwardly put forward statements to remind companies not to market to people from other German states because the industry is not regulated anywhere else in the country. There are some indications that these types of warnings could have led to PayPal’s upcoming policy change about processing German payments.

Lower Saxony is another state in Germany, and they were very open about how they had warned an “unidentified” major payment processor of the same. This is presumed to be PayPal.

There’s no official recognition that this was the case, but unless we’re missing something major here, it seems pretty obvious what happened.

Sports Betting Regulation

Something interesting that’s happening right now is that there are 16 total German states looking to offer online sports betting licenses between now and January 2020, but there’s something interesting in the terms and conditions companies must abide by if they want in on the action: They can’t have any ties to online casinos that accept German players.

To say that this is an interesting development is a bit of an understatement. What’s more is that there was an official session this month where hopeful operators were given information on the upcoming licensing rules and guidelines, and those rules were seen as being a bit unrealistic:

  • A 5 percent tax on all gambling turnover (revenue), which is seen as particularly high.
  • An enforced spending limit of €1,000 per player per month, which is generally seen as being entirely too low.
  • The above mentioned severing of ties to online casino operations that accept German players in the general sense.

All of this is on top of the other regulatory guidelines they’ll have to follow like making sure that they do not accept any players on a registry of players who have self-excluded. They won’t even be able to advertise any of their online gambling operations on any level without being licensed along these lines, which makes sense.

What to Expect

We’re not sure how this is going to play out. These rules and guidelines that they’re putting on operators seems like a bit much to the point that it would be difficult for them to even be profitable in some cases. If they can’t be profitable, then they’re not going to operate there, which takes away the tax revenue that these German states could have had if they had more reasonable policies.

All of that aside, we’ll have to wait and see how things go. They’re looking at getting a countrywide agreement for online gambling by the middle of 2021, and this is a step in that direction.