Is PayPal Involved in Online Gambling?

Everyone knows that PayPal pulled out of the online gambling sector about seven years ago – after settling with the Department of Justice for $10 million. However, it seems that someone may have gotten their wires crossed as the US Internal Revenue Service has served them a “John Doe” summons.

The company still has online gambling services outside the US, which would not come under US jurisdiction. However, the company has been subpoenaed to show financial records concerning the use of offshore credit cards when playing real money casino.

The company says that it has to produce the documents due to US law, even though they feel it is a violation of their clients’ privacy. The group Interactive Media and Entertainment Association says that this does not seem to be related to online gambling.

They say that this looks like tax issues regarding US residents that have bank accounts in so called “tax havens.” They don’t think it actually has anything to do with online gambling. They think it is a completely unrelated case.

The group says that the IRS can only demand this info if they have three tests met:

• The summons must relate to the investigation of a particular person or ascertainable group or class of persons.

• The Service must have a reasonable basis for believing that such person or group or class of persons may fail or may have failed to comply with the tax laws.

• The information and identities sought to be obtained from summoned records must not be readily available from other sources.
However, the group says that even if they meet all applicable parts of the law, they could still be on a “fishing expedition” and therefore should not be allowed to obtain the documents.

The online gambling group Bwin has been awarded their own Financial Services Authority license to offer e-money payment solutions to their own clients. The company had gone through a series of stringent probity checks, and has passed all of their tests.

The Vienna online gambling group is more than pleased to offer their own payment solutions, and say that they have more than earned it after all of the testing and regulation that had to go on before they could get the license. They had to give a detailed disclosure of their ownership structure, as well as reviews of management and all their employees.

They also had to show their infrastructural requirements had been met and all payment systems had to be subjected to an in-depth audit. The FSA in the UK has to make sure that they don’t just give anyone a license to accept money for their own games, and thus say it is necessary for them to go through as much testing and regulating as they went through.

The fact that they passed and are able to offer funding to their clients speaks volumes on how they handle themselves as a company. The FSA’s main goal is to prevent crime in the sector and thus must implement regulations, enforce compliance and conduct investigations.

Now that the online gambling company has gotten the right to take payment, their clients will be relieved that they don’t have to go through a third party company that they are not familiar with. They will be able to accept MasterCard and prepaid cards.