PayPal Regulations


Online business was changed forever when PayPal began web-based payments in 1999. Using bank accounts and credit cards to submit payment without submitting financial information to the selling party improved privacy and ease of quick online transactions. PayPal users must abide by certain rules and regulations, covered primarily in the Acceptable Use Policy.


  • Gambling of any kind, including gaming that requires an entry fee with the chance to win a jackpot or prize is forbidden. This includes betting on sports, races, casino-type games, lottery tickets and sweepstakes. According to PayPal, there are few exceptions, but the operators must have prior approval and are located exclusively in jurisdictions where these activities are permitted by law.

Controlled Sales

  • All sales and substances controlled by the federal government, such as drugs and drug paraphernalia, firearms and ammunitions, obscene items and sexually oriented materials or services are prohibited under PayPal use policies. This is a short and noncomprehensive list because PayPal's Acceptable Use Policy has a clause that states that all activities that violate any law, statute, ordinance or regulation are prohibited.


  • Certain types of organizations must attain preapproval before conducting PayPal transactions. PayPal’s compliance department must review jewelry sales, alcohol sales, donations to charities and nonprofits, stocks and bonds, escrow services or any kind of investment before transactions may occur. Approval depends on the business’ specific circumstances.

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