Poker Player Lena Evans Accuses PayPal of Racketeering in Federal Lawsuit

Posted on: January 17, 2022, 12:23h. 

Last updated on: January 17, 2022, 02:39h.

Philip Conneller @casinoorgphilc Read More

Expertise: Gaming Business, Regulation, Tribal Gaming.

Lena Evans, a two-time World Series of Poker Circuit ring winner, is suing PayPal. In a RICO lawsuit filed Thursday in a Northern California federal court, she accuses the digital payments giant of “fraudulent, oppressive, and malicious conduct.”

In the proposed class-action suit, Evans says PayPal froze $26,984 in her account without warning or explanation.

She uses the account to help run her non-profit organization, the Poker League of Nations (PLON). This raises money for women with various needs, according to the lawsuit. These include female veterans, women with breast cancer, and those facing child custody issues.

Evans also uses the payment processor to exchange money for a poker league she owns and manages, Helix Poker, and to buy and sell clothes.

‘Outright Theft’

Evans is the lead plaintiff in the suit that includes two other businesspeople, who say they have also fallen afoul of PayPal’s “Acceptable Use Policy (AUP),” with little explanation as to why.

The plaintiffs claim PayPal’s practice of seizing money under this policy is “illegal, highly questionable, and akin to outright theft.”

The AUP itself is not included in Paypal’s User Agreement, but is a separate document that users must access via a hyperlink on its website. It prohibits the use of the platform for various illicit activities, and states that PayPal can seize some funds for “damages” where they are detected.

The plaintiffs claim they have done nothing wrong. While poker tournaments are illegal in certain jurisdictions, Evans’ tournaments are organized at licensed and regulated casinos in the US. Meanwhile, her fellow plaintiffs aren’t involved in the gambling industry at all.

These provisions explicitly only allow for Defendant to collect damages if there has been a violation of the AUP – not merely a suspected violation, or an alleged violation,” the lawsuit states. “Moreover, even where there is an actual violation, users are expressly only liable to Defendant for Defendant’s ‘damages’ caused by said violation.

“Nevertheless, Defendants routinely engage in ‘self-help’ under the cover of this provision by withdrawing money – sometimes entire account balances – from its users’ accounts and transferring those funds to itself based merely on suspected or alleged violations of the AUP,” it continues.

According to the lawsuit, PayPal does this without conducting any “reasonable investigation” to determine whether a violation has occurred. Often, it does not even contact the user prior to the seizure of funds, and offers no reasonable way for users to challenge the action or obtain any due process.

Moneymaker Effect

Evans was likely inspired to file the case by Chris Moneymaker, the 2003 WSOP champion and Poker Hall-of-Famer. Moneymaker took to Twitter in June to complain PayPal had frozen more than $12,000 he intended to use as buy-ins for fantasy football tournaments.

He threatened to sue and asked to hear from Twitter followers with similar experiences. There were many.

Legal action was apparently aborted, however, after Moneymaker’s funds reappeared in his account ten days later.

Evans and her fellow plaintiffs are using the lawyer the former world champion briefly hired, Eric Bensamochan.

Along with racketeering, they accuse PayPal of unjust enrichment, violation of the federal Electronic Funds Transfer Act, breach of contract, and of breaching various state laws in California.

They are seeking three times the amount seized by PayPal in enhanced damages, plus punitive and exemplary damages as permitted by law. They also want the court to order the company to cease and desist from engaging in the “unfair, unlawful and/or fraudulent business practices” outlined in the lawsuit.