Considering that there are prize tournaments, and that prize tournaments can be restricted to paying members only, there's some shred of truth about paying money to play games of skill for money. Although PayPal's emails are most likely triggered by the existence of Poker, and possibly the links to other pay sites from the front page.

I can understand why PayPal is playing it safe. BK probably doesn't make enough money for PayPal to spend a lot of time investigating what exactly it does (and doesn't). I can also understand why BK is dropping PayPal.