EBay’s PayPal Restricts Accounts Used in March Madness Betting

Photographer: Gregory Shamus/Getty Images

The Mississippi Valley State Delta Devils battled the Western Kentucky Hilltoppers in the second half of the first round of the 2011 NCAA men's basketball tournament at UD Arena on March 13, 2012 in Dayton, Ohio. Close

The Mississippi Valley State Delta Devils battled the Western Kentucky Hilltoppers in... Read More

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Photographer: Gregory Shamus/Getty Images

The Mississippi Valley State Delta Devils battled the Western Kentucky Hilltoppers in the second half of the first round of the 2011 NCAA men's basketball tournament at UD Arena on March 13, 2012 in Dayton, Ohio.

EBay Inc. (EBAY)’s PayPal has begun restricting accounts of people it suspects of using the payment service to place bets on National Collegiate Athletic Association basketball championship tournament.

PayPal has sent alerts to some users who have used the service in connection with March Madness wagers, saying that their account use has been “limited.”

“After a recent review of your account activity, it has been determined that you are in violation of PayPal’s Acceptable Use Policy regarding your sales / offers of March Madness sports pool,” a representative of PayPal’s brand risk management division wrote in an e-mail obtained by Bloomberg News.

The user agreement for PayPal, EBay’s fastest growing business, prohibits U.S. account use for sending or receiving payments for “activities that involve gaming and/or any other activity with an entry fee and a prize.” The widely followed men’s college basketball championship kicks off this week.

The e-mail asks the user to sign an online “Acceptable Use Policy affidavit” to regain full use of the account.

Bergen Kay, a spokeswoman for San Jose, California-based PayPal, declined to comment on how the company’s system identifies alleged gamblers.

“PayPal follows all the legal and regulatory rules in the U.S. as it relates to gambling,” she said.

To contact the reporter on this story: Mark Milian in San Francisco at mmilian@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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