On-line payment service PayPal yesterday said that it has
reached an agreement with the New York State Attorney General in an
inquiry into payments made through the company’s service to on-line
gambling merchants. Under the settlement, PayPal will stop
processing payments from New York residents to on-line casinos by
1st September 2002.
The company will also pay $200,000 to the State of New York to
cover gambling profits, the cost of investigation and
penalties.
PayPal said in a statement that it is “taking this action in
voluntary co-operation with the Attorney General and is not
admitting to a violation on law.”
Earlier this week Ebay received US regulatory clearance to
acquire PayPal. For the time being, PayPal will block only payments
made by New York residents to internet casinos. However, Ebay has
stated that it intends to discontinue all of PayPal’s on-line
gambling activities after it completes the purchase.
