EcommerceBytes-NewsFlash, Number 379 - August 22, 2002     1 of 3

PayPal Antes up $200K to NY Attorney General, Cuts Off Service to New York Gamblers

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PayPal Inc. said it reached an agreement with the New York State Attorney General in his inquiry into payments made through PayPal's service to online gambling merchants. In an Assurance of Discontinuance made to the New York Attorney General, PayPal agreed to cease processing payments from its New York members to online gambling merchants by September 1, 2002.

PayPal is taking this action in voluntary cooperation with the Attorney General and is not admitting to a violation of law. The Attorney General has agreed to accept PayPal's assurance of discontinuance in lieu of commencing a statutory proceeding. PayPal has also agreed to pay penalties of $200,000 to the State of New York to cover the Attorney General's costs of investigation.

eBay said it would discontinue PayPal's online gambling processing when it acquires PayPal. The proposed acquisition was announced in July and approved by Federal antitrust regulators Monday.

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Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to

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