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To: Herc who started this subject7/12/2002 7:38:44 AM
From: Herc
   of 827
 
Ambitious attorneys general love to grandstand.

<<New York Subpoenas PayPal
For Details on Web Gambling

By NICK WINGFIELD
Staff Reporter of THE WALL STREET JOURNAL


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.

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," Mr. 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% 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.

Mr. Spitzer, who has recently led high-profile investigations of Wall Street analysts, has also actively sought to crack down on Internet gambling, a market that is expected to generate upward of $4 billion in revenue this year.

In June, following an inquiry into Citibank's business practices, Mr. Spitzer announced that Citigroup Inc.'s Citibank unit, the nation's largest credit-card issuer, agreed to block attempts to use its credit cards to pay for online gambling transactions. Citibank paid $100,000 to the state of New York and donated money to groups that fight compulsive gambling as part of the settlement.

Gambling and betting outside of authorized locations such as horse tracks and lotteries is illegal in New York and most other states, but Internet casinos often operate in offshore venues beyond the reach of U.S. authorities.

As a result, opponents of Internet gambling such as Mr. Spitzer have pressed financial firms that facilitate online bets to stop the practice. Credit-card issuers such as Bank of America, Fleet, MBNA and Chase Manhattan Bank currently block such transactions.

Until now, PayPal has found a thriving business in Internet gambling. While 60% of the $1.46 billion in payments it handled last quarter were related to eBay transactions, about 8%, or $117 million, stemmed from Internet gambling. Ebay executives had forecast that the gambling business would have accounted for between 10% and 15% of PayPal's business next year.

Some analysts and investors believe PayPal, as an independent company, would have had a difficult time walking away from the gambling business, though eBay, being larger, can absorb the impact. The gambling business is especially profitable for PayPal because it charges "high risk" merchants such as Internet casinos a higher transaction fee than other customers.

Write to Nick Wingfield at nick.wingfield@wsj.com>>

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To: kidl who wrote (798)10/1/2002 8:11:49 AM
From: Herc
   of 827
 
ANOTHER SUSPENSION VOTE LIKE TWO YEARS AGO.

WASHINGTON – As reported by the Las Vegas Review-Journal: ``Pressured by other Republican leaders, House Majority Leader Dick Armey, R-Texas, has scheduled a vote Tuesday on a bill to ban Internet gambling.

``The bill will require a two-thirds majority to pass since it will be voted on under an expedited procedure. Sponsored by Rep. Jim Leach, R-Iowa, the bill would prohibit the use of credit cards, checks and electronic fund transfers to pay for Internet gambling.

``As recently as last week, Armey reportedly was reluctant to schedule a vote on the Leach bill because it was too controversial and unlikely to receive a two-thirds vote.

``But House Speaker Dennis Hastert, R-Ill., pressed for a vote during a House GOP leadership meeting on Tuesday.

``Bear, Stearns & Co., an investment firm, estimates there are 1,800 Internet gambling sites and the industry is projected to produce annual revenue of $4.2 billion by 2003.

``…`The testimony this month by FBI Director (Robert) Mueller that Internet gambling was a substantial means of money laundering used by terrorists and criminal elements also was important,’ Leach chief of staff Bill Tate said…”

- September 30, 2002

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To: Herc who wrote (806)10/1/2002 9:05:13 AM
From: kidl
   of 827
 
Designed to fail???

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To: kidl who wrote (807)10/2/2002 7:55:27 AM
From: Herc
   of 827
 
H.R. 556, the Unlawful Internet Gambling Prohibition Act, passed without a voice vote since no opposition called for a vote. However the text of the bill still excludes any internet gambling legalized by a state.

So it just makes things more difficult for internet casinos based overseas.

The backers got a bill passed but it's a Pyrrhic victory because the price for passage was such a weak bill that it's toothless. And they had to confront the issue peripherally with credit cards.

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To: Herc who wrote (808)10/2/2002 8:11:27 AM
From: kidl
   of 827
 
Do you think the bill will go through the Senate before adjournment?

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To: kidl who wrote (809)10/2/2002 10:24:50 AM
From: Herc
   of 827
 
I actually forgot about the Senate. But I don't think the AGA would have let it out of the House without opposition if they thought it would hurt them. Internet gambling has been legalized in NV, and some of the big casinos own internet casinos in the Channel Islands.

And in the Senate, NV. has more influence. Democrats control the senate. One of the NV. senators is the majority whip. And Mitch McConnell is looking after horse racing interests. And the AGA is a big campaign contributor. So who knows? The House vote could well be just to placate the religious right, and the bill will be killed in the Senate.

But the way I take the bill, it will just decrease competition for any state that legalizes intrastate internet gambling by banning credit cards for the offshore casinos.

The states are so hard pressed for cash right now I don't think many will be anti gambling.

But I'll write my senators anyway.

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To: kidl who wrote (809)10/2/2002 10:44:03 AM
From: Herc
   of 827
 
Harry Reid of NV. is the senate majority whip. And the father in law of the other senator, John Ensign, is a casino exec. But a Google search did not reveal which casino.

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To: kidl who wrote (809)10/4/2002 8:17:58 AM
From: Herc
   of 827
 
Rolling Good Times has two articles today saying passage of the Leach/Lafalce bill in the Senate is slim. And that the AGA is luke warm towards the bill, favoring it just for PR reasons.

I already emailed my two senators.

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To: Herc who wrote (812)10/21/2002 8:08:50 AM
From: kidl
   of 827
 
CNN's Moneyline website conducted a poll recently which asked the question:

"Should gambling on the Internet be banned?"

The final poll results:

cnn.com

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To: kidl who wrote (813)11/6/2002 8:39:07 AM
From: Herc
   of 827
 
<<Tennessee voters, by 57-to-43 percent, amended the state's 1834 Constitution, which forbids all forms of gambling, to allow a state lottery, leaving Hawaii and Utah the only states without them. State Sen. Steve Cohen, D-Memphis, said his 18-year effort to legalize a lottery had finally paid off.

- North Dakota voters, by 63-to-37 percent, OKd joining a multi-state lottery, while Arizona rejected casino gambling outside Indian reservations by 80-to-20 percent.>>

I couldn't find the North Carolina lotto referendum results.

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