PayPal Launches Online Casino Crackdown in Germany

Online payment system PayPal has made changes to its terms of use in Germany and prohibited the transactions for products that are not legal in the jurisdiction in which they are used.

Online casino games are not legal outside of the state of Schleswig-Holstein in Germany, the rule effectively prohibits the use of PayPal for igaming payments in the remainder of the country. The changes will come into effect on 21 October.

The changes also add that “if you are unsure as to whether or not a specific offer is permitted, you must ensure that it is legal before using PayPal’s services.”

According to PayPal, the added term exists to clarify section 9.1 of its user agreement, which already prohibits clients from the “infringement of applicable law, contract or regulation.”

In June, Lower Saxony (Niedersachsen) issued the country’s first federal blocking order to a payment service provider. The unnamed company, widely thought to be PayPal, was ordered to stop working with operators offering online casino, poker and lottery betting in the market. The Niedersachsen Ministry of the Interior, which is responsible for implementing payment blocking controls across all German states, also sent warnings to a number of other payment service providers over links to illegal gambling.