According to its privacy policyand sites like US Poker and PokerNews, the online payment processor PayPalshares information with Iovation, whose CEO is Greg Pierson, one of the founders of Ultimate Bet. According to PayPal’s Privacy Policy, the company contracts Iovation to “retrieve risk information regarding the IP and device from which you are accessing PayPal[and] research and testing as to appropriateness of new products and services.”

In terms of what information is shared between PayPal and Iovation, PayPal’s Privacy Policy states, “IP and hardware information about the device.”

You’ll recall that the legalized and regulated Nevada online poker room Ultimate Poker formerly used Iovation. The latter’s software included the now infamous “god mode” that allowed the cheats at Ultimate Bet to view players’ hole cards and extract millions of dollars.

Very quickly after word surfaced in the poker community that Iovation and Ultimate Poker were working together, Ultimate Poker broke off the relationship, commenting, “Ultimate Poker discontinued the use of all services from Iovation. We understand that there were concerns among some of our customers; we hope this makes our players feel more comfortable.”

Iovation had been providing verification services for Ultimate Poker. Nevada Gaming officials began investigating Iovation’s involvement.

Also in May of this year, alleged recorded conversationsbetween reported UB cheating mastermind Russ Hamilton and a variety of UB executives reached the general public. In them, references to Iovation included the following: “It’s not taking the ultra high road. It’s not saying we’re not going to do anything. It’s something in between, but the point is they’re interested in coming up with reasonable arguments to minimize it. That’s a big part of what Iovation is doing right now.”

According to PokerNews, “Travis Makar, an Ultimate Bet whistle-blower, released these audiotapes that implicate Ultimate Bet founder and CEO Pierson along with Russ Hamilton in the cover-up of the infamous cheating scandal.”

Speaking on Pierson’s and Iovation’s involvement with the UB cheating scandal, Diamond Flush Poker detailed, “Scandal sleuths have long suggested Iovation technology should have been an important roadblock to the kind of endemic cheating occurring at Ultimate Bet from 2003 to 2007. Pierson(pictured) must have tacitly approved and perhaps even assisted in the cheating. The recordings back the argument, though Pierson does not admit to using the tool and acknowledges fellow founding investor, Russ Hamilton’s, use sparingly. Much about the recordings is not as it seems.”

As you might imagine, the response from the poker community toward PayPal was less-than-cordial. One Twitter user wrote, “Please e-mail david.marcus@paypal.com (CEO) and tell him how appalling this is.” Longtime industry insider Michael Josem added, “Hey @AskPayPal – Stop sharing my personal information with Iovation, the former operators of Absolute Poker & Ultimate Bet.” By the way, the PayPal CEO can be found on Twitter under the handle @davidmarcus.

Josem added on Two Plus Two, “People who steal money should be in prison, and leading financial organizations like PayPal should not be trusting them with our personally identifiable information. It brings into question the efforts of PayPal (and other businesses that do business with Iovation) to protect even their own business against fraud. If we can’t trust PayPal to properly evaluate who they give our computer technical information to, how can we trust PayPal to look after our privacy and financial information?”

PayPal can be used to deposit and withdraw on major online poker rooms including PokerStars.

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