Payment Service Providers and Gambling in the EU: Banking Relationships, Transaction Processing, and Regulatory Requirements

The Critical Role of PSPs in EU Gambling Markets

Payment service providers (PSPs) occupy a pivotal position in the European gambling ecosystem. They serve as the financial infrastructure connecting players, gambling operators, banks, and card networks. Without reliable payment processing, licensed gambling operators cannot function, making PSPs essential gatekeepers in the industry.

The relationship between PSPs and the gambling industry in Europe has evolved significantly over the past decade. Early online gambling growth occurred with minimal payment regulation, but the introduction of the Payment Services Directive 2 (PSD2) in 2018 and successive updates to Anti-Money Laundering Directives have created a complex compliance environment that shapes how gambling payments flow across Europe.

This guide examines the regulatory requirements, practical challenges, and strategic considerations for PSPs operating in EU gambling markets. Whether you're a payment processor evaluating the gambling vertical, an operator seeking banking relationships, or a compliance professional navigating cross-border payment flows, understanding these dynamics is essential.

Understanding the PSP Regulatory Landscape

Payment Services Directive 2 (PSD2)

PSD2 forms the foundational regulatory framework for payment services across the European Economic Area. For gambling payments, several PSD2 requirements have particular significance:

• Strong Customer Authentication (SCA): Electronic payments require multi-factor authentication. Gambling deposits and withdrawals must comply unless specific exemptions apply (such as trusted beneficiary listings or transactions below €30).
• Open Banking: Account Information Services (AIS) and Payment Initiation Services (PIS) enable new payment methods. Operators can offer bank-to-operator transfers that bypass card networks, potentially reducing costs and improving success rates.
• Licensing Requirements: PSPs must be authorized as payment institutions or e-money institutions to process payments. This authorization covers gambling transactions without additional gambling-specific licensing in most jurisdictions.
• Passporting: A PSP authorized in one EEA state can provide services across the EEA. However, gambling-specific regulations may impose additional requirements in target markets.

The European Banking Authority (EBA) provides technical standards and guidelines that detail how PSPs must implement PSD2 requirements, including specific guidance on SCA exemptions and secure communication standards.

Anti-Money Laundering Requirements

The EU's Anti-Money Laundering framework designates gambling as a high-risk sector, imposing enhanced obligations on both operators and their payment processors. Key requirements include:

• Enhanced Customer Due Diligence: PSPs must apply enhanced due diligence when onboarding gambling clients, including understanding the operator's licensing status, beneficial ownership, and source of funds.
• Transaction Monitoring: Gambling-related transactions require ongoing monitoring for suspicious patterns, including rapid turnover, structuring, and activity inconsistent with known customer profiles.
• Suspicious Activity Reporting: PSPs must file Suspicious Activity Reports (SARs) with their national Financial Intelligence Unit when detecting potential money laundering indicators.
• Record Keeping: Transaction records and customer due diligence documentation must be retained for five years after the business relationship ends.

The upcoming EU AML Package, including the new AML Regulation and the establishment of the Anti-Money Laundering Authority (AMLA), will further harmonize requirements and potentially introduce direct supervision of high-risk PSPs serving gambling clients.

Gambling-Specific Regulatory Considerations

While PSPs generally don't require gambling licenses, they must navigate gambling-specific regulations that affect their operations:

Banking Relationships: The Core Challenge

Why Banks Avoid Gambling

Securing and maintaining banking relationships represents the most significant operational challenge for gambling-related businesses, including PSPs serving the sector. Banks commonly decline gambling clients for several interconnected reasons:

• High-Risk Classification: The designation of gambling as a high-risk sector under AML frameworks requires banks to apply enhanced due diligence, increasing compliance costs significantly.
• Reputational Concerns: Some banks, particularly those with retail-focused brands, avoid gambling associations due to concerns about public perception and stakeholder expectations.
• Regulatory Complexity: Gambling regulations vary dramatically across EU member states. Banks must assess licensing status in each jurisdiction, creating substantial compliance burden.
• Chargeback Risk: Card-not-present gambling transactions historically showed elevated chargeback rates, though modern fraud prevention has reduced this concern.
• Risk-Reward Calculation: The enhanced compliance requirements may not be offset by revenue potential, particularly for smaller gambling clients.

De-Risking Trends

The practice of "de-risking"—wholesale avoidance of certain client categories—has significantly impacted the gambling sector. According to research by the Financial Action Task Force (FATF), de-risking can push legitimate businesses toward less regulated financial channels, potentially increasing rather than decreasing money laundering risk.

This dynamic has particular implications for payment blocking and AML compliance, where the tension between financial inclusion and risk management creates complex regulatory challenges.

Strategies for Obtaining Banking Services

PSPs and operators navigating banking challenges employ several strategies:

• Licensing Portfolio: Holding licenses in respected jurisdictions (Malta, UK, Gibraltar) signals regulatory commitment and facilitates banking discussions.
• Compliance Documentation: Proactive sharing of comprehensive compliance documentation, including AML policies, transaction monitoring systems, and audit reports.
• Specialized Banking Partners: Some European banks specialize in gambling clients, offering tailored services at premium pricing.
• Fintech Alternatives: Electronic money institutions (EMIs) often serve gambling clients that traditional banks decline, though with higher fees.
• Multi-Banking Strategy: Diversifying across multiple banking relationships reduces single-point-of-failure risk.

Transaction Processing Requirements

Deposit Processing

Deposits into gambling accounts involve several compliance checkpoints that PSPs must facilitate:

1. Identity Verification: Under KYC requirements, player identity must be verified before deposits are credited. PSPs may need to support enhanced verification for flagged transactions.
2. Deposit Limits: Many jurisdictions impose maximum deposit limits. Germany's €1,000 monthly limit for online slots requires real-time tracking across operators.
3. Self-Exclusion Checks: Before processing deposits, operators must verify the player isn't on national self-exclusion registers. PSPs may need to support rejection messaging for excluded players.
4. Source of Funds: Enhanced due diligence for large deposits may require source of funds documentation, which PSPs may need to collect or facilitate.

Withdrawal Processing

Withdrawal processing carries distinct requirements focused on preventing money laundering and ensuring player protection:

• Closed-Loop Principle: Many operators and regulators require withdrawals to return to the same payment method used for deposits, preventing gambling accounts from being used for money laundering.
• Identity Re-Verification: First withdrawals or withdrawals above thresholds typically trigger additional identity verification.
• Source of Wealth: Large withdrawals may require documentation of how funds were won, including game history and betting records.
• Processing Times: Regulatory frameworks increasingly specify maximum withdrawal processing times, with several jurisdictions requiring payouts within 24-72 hours.

Cross-Border Considerations

EU gambling markets remain nationally regulated, creating complexity for cross-border payment flows:

• Currency Management: Players may deposit in their local currency while operators settle in different currencies, requiring multi-currency processing capability.
• Licensing Verification: PSPs must verify operator licensing status in each jurisdiction where they process transactions.
• Local Payment Methods: Regional payment preferences (iDEAL in Netherlands, SOFORT in Germany, Trustly across Nordics) require diverse integration capabilities.
• Regulatory Reporting: Different jurisdictions may require transaction reporting in varying formats and frequencies.

Compliance Framework for PSPs

Due Diligence on Gambling Clients

Before onboarding a gambling operator, PSPs must conduct thorough due diligence:

Ongoing Monitoring Obligations

Due diligence doesn't end at onboarding. PSPs must maintain ongoing monitoring of gambling clients:

• Transaction Pattern Analysis: Monitor for unusual patterns suggesting potential AML concerns, including rapid deposit-withdrawal cycles, structuring below reporting thresholds, and activity spikes.
• License Status Monitoring: Regularly verify that operator licenses remain valid across all operating jurisdictions.
• Regulatory Intelligence: Track regulatory developments that may affect client operations, including new restrictions, enforcement trends, and market changes.
• Periodic Reviews: Conduct full due diligence reviews on regular cycles (typically annually) or triggered by material changes.

Reporting Requirements

PSPs face multiple reporting obligations when processing gambling transactions:

• Suspicious Activity Reports: File SARs with the relevant Financial Intelligence Unit when detecting potential money laundering indicators. Timeliness is critical—most jurisdictions require filing within days of detection.
• Large Transaction Reports: Transactions exceeding €15,000 (or lower country-specific thresholds) may require automatic reporting.
• Regulatory Data Requests: Gambling regulators may request transaction data for compliance investigations or market monitoring.
• Statistical Reporting: Some jurisdictions require PSPs to report aggregate gambling transaction volumes.

Payment Methods in EU Gambling

Traditional Payment Methods

Credit and Debit Cards: Visa and Mastercard remain the most widely used payment methods in EU gambling. However, credit card gambling bans in the UK (2020) and proposed restrictions elsewhere may reduce credit card volumes. PSPs must support Merchant Category Codes (MCCs) that identify gambling transactions, enabling banks to apply appropriate policies.

Bank Transfers: Direct bank transfers offer lower fraud risk but slower processing. SEPA transfers enable efficient euro-denominated payments across the Single Euro Payments Area.

E-Wallets: PayPal, Skrill, Neteller, and similar services provide an intermediary layer between player bank accounts and gambling operators. E-wallets apply their own AML controls and may offer faster processing than direct bank transfers.

Emerging Payment Technologies

Open Banking Payments: PSD2's open banking provisions enable direct bank-to-operator transfers initiated through operator interfaces. Benefits include real-time processing, lower fees than card networks, and built-in authentication. Players authorize payments through their banking apps without sharing card details.

Cryptocurrency: Cryptocurrency gambling remains in regulatory gray zones across much of the EU. While some licensed operators accept crypto, the lack of consistent regulatory framework creates uncertainty. The Markets in Crypto-Assets Regulation (MiCA) will provide clearer rules for crypto payment services but doesn't directly address gambling-specific considerations.

Mobile Payments: Apple Pay, Google Pay, and similar services add convenience layers over underlying card infrastructure. These methods leverage device biometrics for authentication, potentially satisfying SCA requirements while improving user experience.

Country-Specific PSP Considerations

Germany: The GGL Framework

Germany's 2021 State Treaty on Gambling (GlüStV) creates significant PSP implications. The Gemeinsame Glücksspielbehörde der Länder (GGL) requires:

• Payment blocking for unlicensed operators
• €1,000 monthly deposit limit enforcement across all operators
• OASIS self-exclusion system integration
• Real-time verification before processing deposits

PSPs serving Germany must develop systems to query the centralized player database and enforce deposit limits in real-time, regardless of which licensed operator the player uses.

Netherlands: KSA Requirements

The Kansspelautoriteit (KSA) maintains a strict licensing regime with PSP implications:

• Mandatory payment blocking for blacklisted operators
• Cruks self-exclusion register verification
• Strict advertising restrictions affecting payment communications
• Enhanced affordability checks requiring financial capacity verification

Malta: The MGA Approach

The Malta Gaming Authority (MGA) regulates both gambling operators and the PSPs serving them. PSPs processing for MGA-licensed operators should understand:

• Player fund protection requirements (segregated accounts)
• Reporting obligations to the MGA
• Anti-fraud and AML cooperation requirements
• Business continuity and contingency planning standards

Emerging Trends and Future Outlook

AMLA and Enhanced Supervision

The new EU Anti-Money Laundering Authority (AMLA), expected to begin operations in 2026, will directly supervise certain high-risk financial institutions. PSPs with significant gambling portfolios may fall under AMLA's enhanced supervision, requiring compliance with harmonized EU-level requirements rather than varying national approaches.

Real-Time Payment Verification

Regulatory trends toward real-time deposit limits (Germany) and cross-operator affordability checks suggest PSPs will need increasingly sophisticated verification infrastructure. Open banking APIs may enable real-time income and spending verification to assess player affordability.

AI in Compliance

The application of artificial intelligence to transaction monitoring, fraud detection, and compliance is accelerating. The EU AI Act will regulate high-risk AI applications, potentially including AML systems, requiring explainability and human oversight.

Convergence of Gaming and Payments

The boundaries between gaming, gambling, and payments continue to blur. Loot boxes, in-game currencies, and virtual item trading create payment flows that don't fit neatly into traditional gambling categories. PSPs must navigate these evolving classifications and apply appropriate controls.

Practical Guidance for Stakeholders

For PSPs Entering the Gambling Vertical

• Assess Risk Appetite: Gambling clients bring enhanced compliance burden. Ensure leadership understands and accepts the regulatory and reputational implications.
• Build Specialized Expertise: Gambling compliance requires understanding both payment regulations and gambling-specific requirements. Invest in specialized training and consider hiring experienced gambling compliance professionals.
• Develop Robust Due Diligence: Create comprehensive onboarding processes that assess licensing status, beneficial ownership, AML programs, and responsible gambling measures.
• Implement Gambling-Specific Monitoring: Standard transaction monitoring may miss gambling-specific risk indicators. Develop rules for detecting patterns like rapid deposit-withdrawal cycles, bonus abuse, and collusion.
• Maintain Regulatory Relationships: Proactive engagement with gambling regulators demonstrates commitment and provides early warning of regulatory changes.

For Gambling Operators Seeking PSP Relationships

• Demonstrate Compliance Maturity: Comprehensive documentation of licensing status, AML programs, and responsible gambling measures facilitates PSP due diligence.
• Diversify Payment Partnerships: Relying on a single PSP creates operational risk. Maintain relationships with multiple providers across different risk appetites.
• Anticipate Information Requests: PSPs will require extensive documentation. Maintain organized records of licenses, beneficial ownership, financial statements, and compliance certifications.
• Consider Payment Infrastructure: Some operators build internal payment capabilities to reduce dependence on third-party PSPs, though this requires significant investment in licensing and compliance infrastructure.

Related Resources

For additional context on EU gambling payment regulation, explore these related guides:

• Payment Blocking and AML: Why EU Gambling Transactions Fail – Understanding why deposits and withdrawals are rejected
• Gambling and Money Laundering: AML Compliance Requirements in the EU – Detailed AML obligations for gambling operators
• Cryptocurrency and Bitcoin Gambling in the EU – Legal status of crypto gambling by country
• B2B Gambling Licensing in the EU – Requirements for software and platform providers
• Gambling Data Protection and GDPR Compliance – Privacy requirements for payment data
• Gambling Affordability Calculator – Interactive tool for assessing gambling affordability

Last Updated: January 2026