Online Gambling Bill Gets Renewed Support - 05-03-06

May 3 - The Internet Gambling prohibition Act lead by Rep. Bob Goodlatte has found renewed backing from an unlikely source. In what smacks of total hypocrisy, Paypal and eBay have commended Goodlatte's efforts...

One immediately wonders why Paypal, in writing to our friend Rep. Goodlatte, would commend him for his actions and call the attempts to ban online gambling as "commonsense legislation". The letter written to Goodlatte apparently also states that "the power to prosecute citizens who partake in online gambling activates will be the most effective solution to the problems posed by illegal online gambling". is

Let's backtrack a couple of months. Paypal Europe started processing transaction for Betfair and Ladbrokes in February and March respectively. This comes after Paypal had suspended the processing of gambling transactions in November 2002, after it was acquired by eBay. Paypal has however made it very clear that it will not process transactions for companies illegally transacting with US citizens.

So why would Paypal back the banning of online gambling transactions?

It's very simple to see why. Goodlatte is the chair person of the Congressional Internet Caucus, which by default implies that Paypal want to make sure that they are in his good books. Furthermore, shortly after being acquired by eBay, Paypal took a beating from the then New York Attorney General, Eliot Spitzer, for having processed gambling transactions. Paypal ultimately ended the investigation when it agreed to pay a $200,000 fine.

A source is quoted to say that " They are being contrite".  That puts it mildly.

Clearly, Paypal wants to have its cake and eat it too.

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