The attorney general of New York has subpoenaed PayPal Inc. to request information about online gambling payments that have been made using its system.
The Wall Street Journal is reporting today that New York Attorney General Eliot Spitzer still has his attention on the Internet gambling industry, one month after announcing an agreement with Citibank for it to block the use of its credit cards for Internet gambling purposes.
According to the newspaper, PayPal is cooperating fully with the attorney general's investigation. The newspaper states that it is not yet known the degree of legal action that could be taken against PayPal.
Online person-to-person auction company eBay Inc. announced Monday that it would purchase PayPal for $1.5 billion in stock. In a joint press release, the two companies said that after the acquisition is complete, PayPal would phase out its e-cash service for online gaming payments.
"In view of the uncertain regulatory environment surrounding online gaming, eBay plans to phase out PayPal's gaming business after the transaction closes," the release states. "Gaming providers who use PayPal will have ample opportunity to fine alternative payment solutions."