UK Problem Gamblers Using PayPal To Bypass Debit Card Limits

By Alex Smith, Last updated Mar 2, 2021

Gambling experts have announced their concerns at finding out that UK-based players are able to use PayPal while depositing at online casinos to bypass daily limits on their debit cards.
Recent research has shown that some problem gamblers in the UK have been able to use PayPal to continue gambling – even when their daily spending limit on their debit card has been reached.
The ‘glitch’ is possible due to the way in which PayPal processes payments. While – when using PayPal, transactions are usually instant, PayPal don’t actually pay merchants the money until after at least 24 hours. Over the weekends and bank holidays, this time-frame can increase even more.
When users create a PayPal account, they’re given the option to add a funding source. Most players choose to add a Debit/Credit Card for convenience purposes – but you can open a PayPal account with nothing more than a Bank Account, and this is where the problem stems from.
If players make a deposit at an online casino, and have insufficient funds in their PayPal account, PayPal automatically uses the next funding method available. If no Debit or Credit Card has been added, this is the player’s bank account – and this means that funds deposited, may not be deducted from the gambler’s bank account until the following day, or the next working day, if the transaction takes place over the weekend.

Gambling Experts Are Concerned Problem Gamblers Are Spending More Than They Can Afford

Henrietta Bowden-Jones – a former psychiatrist, and founder of the National Problem Gambling Clinic – has personal experience dealing with problem gamblers who’ve used PayPal to amass huge debts.
She said: “The first time I ever heard about a gambler using PayPal to pay for online gambling occurred about two weeks ago in clinic, when a young man came accompanied by one of his parents. The patient was 20 years old, with no savings.
“He had been online gambling, had reached his limit on his bank card but somehow managed to withdraw by direct debit £2,000 every few minutes to continue gambling while his parents were asleep next door. When they woke up the next day, he had lost £150,000.”
This is, in no means an isolated case.
Stephanie Bramley – a University researcher of King’s College London – told sources that she was ‘all too aware’ of students transferring their student loans to their PayPal accounts, so that they could gamble, without the worry of university staff finding out about their gambling transactions.
Matt Zarb-Cousin – the co-founder of Gamban, a popular software app used to block access to gambling websites also commented on Henrietta’s findings, saying: “There is a lag and that lag is what Henrietta was talking about with the 20-year-old patient. The fact he had spent money he did not have. PayPal has no limit on it with regards to gambling, so it won’t recognize previous transactions made until it’s too late.”
Thankfully, most online casinos do require funds to be made using funds actually available inside a PayPal balance in order for the deposit to be accepted – but it’s clear there are cases where this isn’t being enforced.
PayPal, this week, issued a statement, saying:
“We cannot comment on individual cases. However, we are urgently looking into these reports and take them very seriously. Our team has already reviewed the controls we have in place to identify and block problem gambling, and changes have been made to tighten the rules that govern these payments.”
Whether we’ll see regulatory action as a result of the findings remains to be seen – but it’s evident that this is a problem, and if even one problem gambler is able to use it to gamble funds he or she doesn’t have, then it’s clear it’s a loophole that needs to be fixed.

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