Back in the old days, PayPal used to be used for online gambling transactions but started getting sued for their involvement in the industry. New York Attorney General Eliot Spitzer cited PayPal for having a user agreement that wasn't clear enough. He then subpoenaed all documents relating to PayPal's use in online gambling sites, suggesting the company was violating New York gambling laws. Following Spitzer's investigation, the U.S. Justice Department determined that PayPal's use by gambling sites violated the US PATRIOT Act.
After Ebay bough out PayPal, they settled the PATRIOT Act charge with the Justice Department for $10 million and agreed to bar its customers from using the service for online gambling.
These days PayPal isn't an option for online gambling money transfers. PayPal has been very aggressive in separating themselves from the gambling industry. PayPal even said it will fine people up to $500 for uses related to gambling. PayPal's "Acceptable Use Policy" states that you "may not use the PayPal service for activities that:
involve gambling, gaming and/or any other activity with an entry fee and a prize, including, but not limited to casino games, sports betting, horse or greyhound racing, lottery tickets, other ventures that facilitate gambling, games of skill (whether or not it is legally defined as a lottery) and sweepstakes unless the operator has obtained prior approval from PayPal and the operator and customers are located exclusively in jurisdictions where such activities are permitted by law."
PayPal prohibits transactions for gambling activities by merchants and account holders in the U.S. and any jurisdiction where gambling activities are illegal, and by merchants whose services are accessible to account holders in the U.S."
Under their section, "What gambling activities does PayPal prohibit?." it also say that it is "poker (whether or not it is considered a game of skill in the gambler's jurisdiction)."
maria00 on January 16, 2009