PayPal to Stop Processing Online Casino Payments in Germany

  • New measure will come into effect on October 21, 2019
  • The Lower Saxony state in Germany issued a warning to an unnamed payment processor in June
  • Many believe that this was a forewarning for PayPal
  • Currently, only the Schleswig-Holstein state offers online casino licenses in the country
PayPal app icon displayed on smartphone.
PayPal will stop processing online casino payments in Germany from October 21. [Image: Shutterstock]

Reason for this withdrawal

PayPal has announced plans to stop supporting payments to and from online casinos in Germany beginning October 21, 2019.

This matter dates back to June when the Lower Saxony state in Germany issued a warning to an unnamed international payment processor about catering for illegal online casino transactions.

issued a warning to an unnamed international payment processor about catering for illegal online casino transactions

While the processor in question was not named, many people thought that the processor was PayPal. 

PayPal was quick to update to their German terms of service to reflect this change. Their policy of activities not catered for now includes: “offers that are not legal in your respective whereabouts, including some online gambling offers.”

Many illegal online casino platforms have been using PayPal as a banking method for players to add and withdraw funds from their accounts. This includes offshore platforms that cater for German residents despite not being licensed in the country. 

Online gambling in Germany

The only state currently offering online casino licenses in Germany is Schleswig-Holstein.

These licenses expired at the start of 2019 and it was only in June that they were given a temporary extension to their license. License holders are under strict orders to only offer their services to residents of the Schleswig-Holstein state. 

Some online casinos previously stopped offering PayPal as a method of payment for their German customers. For example, Bwin stopped offering PayPal in the German market for their online casino offering in December 2018. 

There are 16 states in Germany and they are planning to roll out online sports betting licenses in January 2020. Those pursuing licenses are not allowed to have any links to online casinos targeting the German market.

A new federal treaty on gambling is in the works and they hope to have it ready by the end of June 2021. 

There is a new gambling framework currently under review. It sees a ban on non-sports betting products, as well as preventing in-play bets. There would be a tax of 5% on betting turnover and users could only spend up to €1,000 each month.

Other restrictions include operators having to obtain a separate license if they want to advertise their offering in the country. There are hopes that these are only temporary measures and that the federal treaty in 2021 will be a lot more enticing to operators and users alike.