Internet gambling probe includes PayPal

Friday, July 12, 2002 | 11:18 a.m.

NEW YORK -- Internet payment provider PayPal Inc. said it received a subpoena from the New York state attorney general's office related to its activities in the Internet gambling market, the latest development in a broad investigation of online gambling activities, The Wall Street Journal reported today.

Vince Sollitto, a PayPal spokesman, confirmed that earlier this week the Mountain View, Calif., company received a subpoena from the office of Eliot Spitzer, the New York attorney general, asking the company for information about online gambling payments that occur through the company's network. "We will, of course, fully cooperate," Sollitto said.

It is unclear how serious any legal action could be on PayPal. EBay Inc. on Monday said it would cease the business PayPal does with Internet gambling firms when eBay completes its proposed $1.5 billion acquisition of PayPal later this year.

EBay said it decided to close the gambling business, which accounts for 8 percent of payments on the PayPal network, because of uncertainty surrounding regulation of that market.

Christine Pritchard, a spokeswoman for the New York attorney general's office, declined to comment about PayPal or confirm that a subpoena had been sent to the company. The New York attorney general's office has been conducting an investigation into companies in the Internet gambling market.