PayPal agreed to pay 10 million

WASHINGTON (AFP) – Internet payment group PayPal agreed to pay 10 million dollars to settle allegations that it allowed customers to engage in illegal offshore gambling via the Internet, authorities said.

The Justice Department (news – web sites) late Thursday said PayPal, which is now a unit of online auction giant eBay, made the settlement of criminal charges in federal court in St. Louis, Missouri.

The 10 million dollars amounts to a forfeiture of proceeds from Internet gambling between June 2000 and November 2002, when PayPal stopped allowing its customers to place bets through its service.

The federal government has maintained that Internet gambling by US residents is illegal, and has sought to crack down on the use of credit cards or other Internet payment systems used for gambling.

Many credit card and payment operations have in the past year blocked gambling payments.

“Offshore sportsbooks and on-line casino gambling operations which do business in the United States generally do so in violation of federal criminal laws,” US Attorney Raymond Gruender said in a statement.

“Therefore, we will continue to investigate and pursue such activity.”

Authorities said PayPal and eBay cooperated with government investigators. PayPal is a service that allows people to transfer money through accounts established via e-mail.


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