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WASHINGTON (Dow Jones/AP) — Online payment service PayPal Inc. and its parent, eBay Inc., have agreed to pay a $10 million fine to settle allegations they aided illegal offshore and online gambling.
According to the settlement, PayPal between mid-2000 and November 2002 transmitted money in violation of federal and state online gambling laws. As part of the settlement, PayPal must maintain a corporate compliance program for at least two years.
The settlement ends the government’s case against PayPal and e-Bay, but doesn’t limit investigation of companies or individuals outside PayPal and eBay who were involved.
“Offshore sportsbooks and on-line casino gambling operations which do business in the United States generally do so in violation of federal criminal laws,” said U.S. Attorney Raymond Gruender. “Therefore, we will continue to investigate and pursue such activity.”
Gruender commended the “cooperative, conciliatory approach of PayPal and eBay” in resolving the matter and their continued assistance to related investigations.
Online gambling accounted for about 8 percent, or $117 million, of the $1.46 billion processed through PayPal during the first three months of 2002.
PayPal stopped accepting payments for gambling services when it was acquired by eBay later the same year.
“Offshore sportsbooks and on-line casino gambling operations which do business in the United States generally do so in violation of federal criminal laws,” said U.S. Attorney Raymond Gruender. “Therefore, we will continue to investigate and pursue such activity.”
This is what I found very ominous
Definitely scary!!!
It sets a nasty legal precedent that prosectors WILL take advantage of. If you ever received commissions from online gambling via Paypal I would be very concerned. I think most of us in the business did and I also believe Paypal’s pledge to cooperate in investigations may have very bad ramifications in the near future.
:Cry:I have certainly received commissions there!
Now we need to worry about neteller next I guess….
If my memory servves correctly, Paypal said they stopped all gaming transactions in November of 2001. The 1st 3 months of 2002 they were STILL processing gaming transactions?
If that was the case, the morons deserved a fine.
It also follows with a statement I’ve made earlier: If you are doing anything in this business, make sure all i’s are dotted and all t’s crossed.
All forms should be filed and all legal entities should be legitimately established in the jurisdiction you are in. Otherwise, you leave yourself at a MAJOR legal risk.
This applies not only to casinos but to ANY operation out there (including “non profits”). Heck, some attorney generals have a ‘hard on’ for interent gaming related people. They are looking to make exapmles of these poeple. That’s how they operate.
Just an FYI
Marc Lesnick
