Just like other companies, PayPal was scared away by the online gambling industry within the US. Ebay, parent company of the popular payment processor PayPal, ordered PayPal to stop accepting payments from online casinos in the United States in light of the UIGEA.
Now PayPal is back in action in the online gambling industry.

PayPal has recently signed an agreement to now allow merchants of Neovia Financial to provide PayPal as a payment processor option, whose primary merchants are online gambling companies in the UK.

As for US customers, PayPal still can’t process payments from US gamblers to online gambling sites, but PayPal will process payments in jurisdictions that allow Internet gambling where it is regulated. Now after the fact, PayPal may be rethinking their stance on online gambling.

“It was very clear back in the early part of this decade that PayPal made an effort to move away from online gambling altogether,” says Steve Schwartz, Gaming Analyst. “With this deal, however, it may be a signal that PayPal is reconsidering that stance and is preparing to make a full jump back into the online gambling industry.”

Lately it’s become increasingly difficult in the US for payment processors to accept transactions from online gambling industry. The difficulty is mainly coming from the US government, as they have already begun seizing more and more bank accounts related to online gambling lately.

The fact is that in the United States, online gambling is still illegal. Perhaps the proposed legislation by Representative Barney Frank which would overturn the 2006 Unlawful Internet Gambling Enforcement Act will pass. If and when the UIGEA is overturned, those businesses that ignored the ban on online gambling activity in the US will face the possibility of not being allowed to legally be a part of the industry.