Stripe's $53B Bid For PayPal Puts Its Role At US Online Casinos In Question

Stripe and private equity firm Advent International have offered to buy PayPal for more than $53 billion. The deal, if it closes, would put America's most widely used online casino e-wallet under a new owner whose own payment platform bans gambling outright.

It is too early to know whether that would change anything for US casino players. But it is the central question the deal raises for the US online casino market.

Reuters reported the joint offer values PayPal at $60.50 a share. That is roughly a 28% premium over Tuesday's closing price.

The bid is backed by about $50 billion in committed bank financing. It was submitted earlier this month, following an initial approach in April.

Stripe and Advent would each take an equal 50/50 stake in PayPal, according to Yahoo Finance. Both firms reportedly plan to keep the company intact rather than break it up.

PayPal shares surged as much as 16-20% in premarket and early trading on the news. Neither PayPal nor Stripe has confirmed the report.

PayPal is accepted at licensed online casinos across the US, including FanDuel, BetMGM and Caesars Palace. It treats gambling as a sensitive category, not a blanket prohibition.

Only operators licensed in a US state, and separately approved by PayPal, can offer it as a deposit method. That vetting adds a second layer of scrutiny on top of state licensing.

This is a relatively recent posture. PayPal exited gambling payments entirely in November 2002, when nearly all US-facing online gambling was unlicensed.

It returned gradually as states legalized online poker, casino gaming and sports betting from 2013 onward. Its approval model was built specifically for that regulated market.

Stripe's published restricted-business policy bars online casinos, sports betting, poker, lotteries and other games of chance. That ban applies even to operators holding a state, national or international license.

The restriction comes from Stripe's agreements with its acquiring banks and card networks. It is not a discretionary policy Stripe can waive merchant by merchant.

Businesses that try to route gambling transactions through Stripe risk having their accounts suspended or terminated. No public statement from either company has addressed how, or whether, that policy would apply to PayPal's existing casino business if the deal closes.

Online casinos rarely rely on a single payment method. Most licensed US operators already support several alternatives to PayPal.

Play+ prepaid cards are casino-branded and support both deposits and withdrawals. They process almost as fast as PayPal and rarely get declined.

Skrill is another e-wallet option, though it is far less common at US operators than PayPal. Google Pay and Apple Pay also work at many sites, though some casinos only allow them for deposits, not withdrawals.

ACH bank transfers move money directly from a player's bank account. They typically take longer to clear but come with high deposit limits, which makes them popular with high rollers.

Visa, Mastercard and Discover cards remain widely accepted too. They carry a specific merchant code, MCC 7801, that flags gambling transactions to banks. That code is a separate reason cards get declined more often than e-wallets, regardless of who owns PayPal.

None of these options replaces PayPal's speed or its scale. But their presence means a disruption to PayPal's casino approvals, should Stripe apply its own gambling ban after a deal closes, would not cut off deposits and withdrawals entirely.

PayPal has not yet responded publicly to the offer. Analysts at William Blair said the board and CEO Enrique Lores could push for a higher price, potentially as high as $70 a share.

Investor Michael Burry, who holds PayPal stock, called the reported bid too low. He said he expects the price to rise, according to Yahoo Finance.

Regulators are likely to scrutinize the deal closely given its scale. A combined Stripe-PayPal would process trillions of dollars in payment volume annually.

Bloomberg first reported Stripe's interest in February, citing early talks about buying all or part of PayPal. That followed a stretch in which PayPal's market value fell sharply from its 2021 peak of roughly $360 billion.

Stripe brings strength in merchant-side payments. PayPal brings hundreds of millions of consumer accounts, Venmo, and its PYUSD stablecoin.

Lores has spent his tenure cutting costs and simplifying PayPal's operations amid competition from Apple Pay and Google Pay. No official comment has come from either company since the Reuters report.