<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR><TD vAlign=top width=433><TABLE cellSpacing=0 cellPadding=2 border=0><TBODY><TR><TD>Voice Your Opinion on the UIGEA Regulations </TD></TR><TR><TD>by Dan on 12/4/2007 00:50
www.pocketfives.com/C6DA3D7A-A774-4C16-A909-69241B92327F.aspx</TD></TR></TBODY></TABLE></TD></TR><TR><TD vAlign=top width=433><TABLE cellSpacing=0 cellPadding=2 border=0><TBODY><TR><TD>When the United States Senate passed the Unlawful Internet Gambling Enforcement Act at the 11th hour last fall by unanimous consent, the Congressional body had little knowledge of the issue itself. Attached as a rider to the Safe Port Act, the UIGEA ushered in a climate of turmoil and uncertainty in the online gambling world. With the proposed regulations released in October, the Poker Players Alliance is seeking your input as part of a federally-mandated comment period.

PPA Executive Director John Pappas explains the existence of a comment period: �This is part of the democratic process in which we operate. The Federal Government can impose rules and regulations, but they must do so in a way that allows the American public to comment on them. When they introduced the proposed UIGEA regulations in early October, there were a number of problems. What we�ve been doing is encouraging PPA members and poker players everywhere to write to the Federal Government and point out the issues with their regulation.�

So what are the shortcomings with the UIGEA regulations? Here are five flaws taken from the PPA�s website:

1. The proposed regulations should be modified to clarify that they don�t cover games predominantly determined by skill, such as poker, bridge, mahjong and backgammon. Section 5362(1)(a) of UIGEA defines a bet or wager as �the staking or risking by any person of something of value upon the outcome of a contest of others, a sporting event, or a game subject to chance,�� �Subject to chance� can be interpreted in a variety of ways, but in a gambling context it should reasonably be taken to mean games like roulette or slots where players bet against �the house� and success is determined by chance. Poker players compete, not against the house, but against each other, and the success of a player over any significant time interval is determined by that players� skill.

2. The regulators must define what is and isn�t �unlawful Internet gambling.� The federal and state laws governing Internet gambling are very ambiguous -- nearly all of them were written before the advent of the Internet, and it is not clear how they apply to Internet gaming. In the proposed rule, the regulators emphasize that it is not their intention to clarify this question, because to do so would require them to examine the laws of every state with respect to every gaming modality. Yet that is exactly what they are requiring every bank and payment system to do individually.

3. The regulators should refrain from implementing the regulations until the U.S. resolves its international trade disputes. The World Trade Organization has found the U.S. to be out of compliance with its obligations under the General Agreement on Trade in Services because of its attempts at prohibiting Internet gambling. This is likely to cost the U.S. economy billions of dollars in lost market share and export opportunities. The U.S. government is in negotiations with its trading partners over this matter. Inasmuch as these regulations arguably make that situation worse, the regulators should hold off on finalizing the regulations until the U.S. can resolve its international trade obligations.

4. The proposed regulations should not infringe on personal privacy. UIGEA deputizes banks and payment systems and turns them into the Internet morality police. These regulations should not compel banks to scrutinize the private transactions of individual poker players and others. To do so is hostile to the personal and financial privacy of every American with a credit card or checking account.

5. The UIGEA and the enforcing regulations should not apply to Internet poker nationwide. Federal case law has consistently held that the Wire Act applies only to sports betting and very few states have any laws against Internet poker. These regulations should be clear to only block those transactions which are in fact against the law. Games of skill which are not outlawed under current federal law � such as poker, chess, bridge and majong -- should be exempt from the UIGEA and the regulations.

The main issue the PPA takes with the regulatory efforts is that the guidelines set forth by the U.S. Treasury and Federal Reserve are vague at best (point #2 above). To quote Pappas, �In effect, these regulations will force credit card companies to block transactions to online poker accounts. There�s no definition given of what is or is not unlawful. If you are the Chief Legal Officer of a bank, you�re gong to err on the side of being conservative and block anything that could be perceived as a gaming transaction whether it�s legal or not.�

The Federal Government is required to review any and all comments given as part of this process. This essentially acts as a �stall tactic� that would delay the regulations from going into effect until all comments are reviewed and analyzed: �Really what this can help do is give the government pause before they rush to push out regulations. They�re required to review and take into account all of the filings that are sent. We think that, if we can get a lot in there, it gives the Government more to chew on and effectively will help delay the implantation of any regulations for a while. That is a short term goal. Ultimately, we want good regulations.� In total, the process can take anywhere from a few weeks to a few months.

With the regulations set forth not specifically outlining what is or is not illegal, you can see that the law passed last year was a poor one, at best. Pappas agrees: �I think that Congress didn�t realize what it had passed. They certainly didn�t realize it was unenforceable and put the burden on the U.S. banks and financial institutions to figure out what isn�t and is legal.�

Comments are due by December 12th. The PPA has asked for an extension to this deadline, but doesn�t expect that to occur. Click here to learn how to submit a comment as well as read some helpful tips. Here is a sample of some of the comments submitted so far by individuals and organizations. Note that the themes are similar to the five points outlined above:

�I would like you to reconsider adopting these changes in any timely manner, and instead allow for a bill which regulates and controls online wagering. Individuals should be allowed to do what they please with their own money. Thanks for your time.�

�I urge a revision to the proposed regulations to ensure a proactive bias towards processing of all financial transactions. To accomplish this, I propose revising the regulations to remove from the regulations all penalties for all but willful and egregious noncompliance. Also, I propose that the Monitoring section of the regulations be revised to require banks to process all lawful transactions.�

�The proposed rules on stopping the funding of unlawful internet gambling activities need a major overhaul. The rules require banks to do the impossible and provide no clear guidance. The costs and regulatory burden that banks will incur will not accomplish the desired result.�

�The corruption associated with this act is also readily apparent to the American people. There is no ethical or moral foundation for allowing certain forms of gambling (horse racing, state lotteries) and prohibiting others (poker). Especially considering that lotteries are far more likely to attract people with gambling problems. The vast majority of poker players are people that can easily afford to lose the money they are gambling in contrast to the majority of state lottery participants who cannot.�

�These regulations don't define what is or isn't unlawful gaming, and the regulations differ from state to state. I'm worried that banks (who have had the enforcement of this dumped in their laps) are going to block all gaming transactions, legal or illegal.�

Check out the full list of comments by going to http://www.regulations.gov. Then, select "Department of the Treasury-All� from the agency drop-down menu, then click �Submit.� In the �Docket ID� column, select �Treas-DO-2007-0015� to view public comments for this notice of proposed rulemaking.

To learn how to submit a comment, visit the PPA�s regulatory comment landing page by clicking here. You don't even have to be a PPA member to file a comment; any interested person or organization can do so. The Federal Government has spoken. Now it�s your turn to talk back.

News Resources
To read a summary of the UIGEA regulations written by CardPlayer, click here.
Read Professor I. Nelson Rose's take on the UIGEA regulations.
</TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE>

<SPAN class=postbody>http://www.federalreserve.gov/SECRS/...-1298_45_1.pdf

Excellent comment from the Boeing credit union!</SPAN>

<SPAN class=postbody>Comment from the American Greyhound Track Operators Association: www.federalreserve.gov/SECRS/2007/November/20071108/R-1298/R-1298_26_1.pdf

It's 11 pages (plus 55 more pages of attachments), but the bottom line is that they are very concerned about overblocking, and they are requesting a definition to the term "unlawful Internet gambling".</SPAN>

Focus on the Family has just asked their members to submit comments on the UIGEA regs via the FoF Action Plan (the evil twin of our pro-freedom action plan), so please write to counteract this. Thanks.

It's amazing how many falsehoods and half-truths are in the American Family Association letter.

Hey TE, obg here, following is my latest comment.

I have noticed a theme developing from several concerning over-blocking and lack of a definition of what IS UIG.

Actually, in the UIGEA itself, there is a section directing the regs writers to design the regs specifically to avoid blocking legal (at least those specifically as legal) from over blocking, I folled the stated theme using the un-blocking requirement.

Letter as follows:

<SPAN>December 07, 2007

Jennifer J. Johnson
Secretary, Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, N.W.
Washington, DC 20551 </SPAN>

<SPAN> </SPAN>

<SPAN>RE: Comments, Docket No. R-1298

</SPAN>

<SPAN>Dear Secretary Johnson:</SPAN>

<SPAN> </SPAN>

<SPAN>I am writing in regard to the requested comments concerning overblocking, creating a list of illegal sites and developing merchant codes per the request (Docket No. R-1298) implementing the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). Though you request comments on each section individually, the two are intimately linked and dependent on the other so I am commenting as a group.</SPAN>

<SPAN> </SPAN>

<SPAN>The development of merchant codes IS necessary and required in order to comply with the UIGEA, 2006 section that states on </SPAN><SPAN>Page 233- Line 13-18
(4) ensure that transactions in connections with any activity excluded from the definition of unlawful internet gambling in subparagraphs (B), (C) or (D)(i) of section 5362(10) are not blocked or otherwise prevented or prohibited by the prescribed regulations.� This REQUIREMENT of the regulation to prevent overblocking MUST be addressed in the actual regulations.</SPAN>

<SPAN> </SPAN>

<SPAN>Quoting from the proposed regulations on page </SPAN><SPAN>PAGE 56688 D. Processing of Restricted Transactions, Prohibited, </SPAN><SPAN>Section 5 they state, �Some payment system operators have indicated that, for business reasons, they have decided to avoid processing any gambling transactions, even if lawful, because, among other things, they believe that these transactions are not sufficiently profitable to warrant the higher risk they believe these transactions pose.� Though the regulations next state correctly that the Agencies do not have the authority to REQUIRE processing of legal transactions, clearly the Agencies are REQUIRED by the UIGEA to provide an environment that is safe and without risk to processors and banks that wish to do so.</SPAN>

<SPAN> </SPAN>

<SPAN>This can be handled by the proper establishment of Merchant Codes, developed by the processors and banks AND approved by the Agencies. </SPAN>

<SPAN>As noted in the proposed rules and I quote, �</SPAN>The proposed rule does not include specific methods for identifying and blocking restricted transactions as they are being processed within the examples of procedures for any designated payment system other than card systems because the Agencies believe that only the card systems have the necessary capabilities and processes in place�.<SPAN> </SPAN>

Additionally, it is stated, �The policies and procedures of participants in a card system are expected to address methods for identifying and blocking restricted transactions as they are processed, such as by establishing one or more transaction codes and merchant business category codes that are required to accompany the authorization request from the merchant for a transaction and creating the operational functionality to enable the card system or the card issuer to identify and deny authorization for a restricted transaction. Card systems may be able to develop one or more merchant category codes for gambling transactions that are not restricted transactions under the Act.

This, however, is NOT possible without properly designed guidelines ALLOWING a PROPER determination at to what business types are assigned a specific code.

You first note above that payment system operators are DECLINING to process legal transaction because of the risk then you state you believe the card systems have the necessary processes in place.
This obviously is NOT the case considering the former portion of you proposal as noted above concerning the declining of transaction, again, due to the risk created by lack of a defined guideline.

In you analysis, the proposal looks at creating a list of sites that should / should not be blocked as an option is not feasible. I agree, a defined list of sites is not possible as they do come and go.

With this in mind, I feel it only appropriate that a guiding definition of what constitutes UNLAWFUL Internet Gambling be established rather than a list of sites.

For example, one need only look at the state laws to see IF there is a SPECIFIC prohibition against Internet wagering an IF there are clauses or court rulings allowing / exempting games of Skill that by several state and at least one Federal Court in New Jersey have ruled games of skill / contests between players do NOT constitute gambling.

By adopting this simple standard and simply looking at which states these player to player / person to person contests ARE allowed in a simple coding system can be established, thus allowing the overblocking prevention portion of the UIGEA to be fulfilled.

<SPAN>This simple, but yet effective determination and analysis will alleviate the problems of overblocking, allow processors to properly create a coded system that will remove the risk of inadvertently processing illegal transaction while at the same time creating by proxy a virtual list of unlawful gambling sites AND a list of LAWFUL Gaming sites.

obg

Also posted at a few other clubs.</SPAN>

<SPAN>I have noticed a theme of sorts that has developed in the regs comments that center on over-blocking due I believe to a lack of understanding of what actually constitutes illegal internet gambling, even in the face of the agencies being directed by the UIGEA itself to develop regs that prevent this while blocking �illegal� betting. Impossible to do I would surmise.</SPAN>

<SPAN> </SPAN>

<SPAN>Anyway, here is my comment to the board based entirely on the agencies own words and those of the UIGEA itself. </SPAN>

<SPAN> </SPAN>

<SPAN>Comments before I submit?</SPAN>

<SPAN> </SPAN>

<SPAN>December 07, 2007

Jennifer J. Johnson
Secretary, Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, N.W.
Washington, DC 20551 </SPAN>

<SPAN> </SPAN>

<SPAN>RE: Comments, Docket No. R-1298

</SPAN>

<SPAN>Dear Secretary Johnson:</SPAN>

<SPAN> </SPAN>

<SPAN>I am writing in regard to the requested comments concerning overblocking, creating a list of illegal sites and developing merchant codes per the request (Docket No. R-1298) implementing the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). Though you request comments on each section individually, the two are intimately linked and dependent on the other so I am commenting as a group.</SPAN>

<SPAN> </SPAN>

<SPAN>The development of merchant codes IS necessary and required in order to comply with the UIGEA, 2006 section that states on </SPAN><SPAN>Page 233- Line 13-18
(4) ensure that transactions in connections with any activity excluded from the definition of unlawful internet gambling in subparagraphs (B), (C) or (D)(i) of section 5362(10) are not blocked or otherwise prevented or prohibited by the prescribed regulations.� This REQUIREMENT of the regulation to prevent overblocking MUST be addressed in the actual regulations.</SPAN>

<SPAN> </SPAN>

<SPAN>Quoting from the proposed regulations on page </SPAN><SPAN>PAGE 56688 D. Processing of Restricted Transactions, Prohibited, </SPAN><SPAN>Section 5 they state, �Some payment system operators have indicated that, for business reasons, they have decided to avoid processing any gambling transactions, even if lawful, because, among other things, they believe that these transactions are not sufficiently profitable to warrant the higher risk they believe these transactions pose.� Though the regulations next state correctly that the Agencies do not have the authority to REQUIRE processing of legal transactions, clearly the Agencies are REQUIRED by the UIGEA to provide an environment that is safe and without risk to processors and banks that wish to do so.</SPAN>

<SPAN> </SPAN>

<SPAN>This can be handled by the proper establishment of Merchant Codes, developed by the processors and banks AND approved by the Agencies. </SPAN>

<SPAN>As noted in the proposed rules and I quote, �</SPAN>The proposed rule does not include specific methods for identifying and blocking restricted transactions as they are being processed within the examples of procedures for any designated payment system other than card systems because the Agencies believe that only the card systems have the necessary capabilities and processes in place�.<SPAN> </SPAN>

Additionally, it is stated, �The policies and procedures of participants in a card system are expected to address methods for identifying and blocking restricted transactions as they are processed, such as by establishing one or more transaction codes and merchant business category codes that are required to accompany the authorization request from the merchant for a transaction and creating the operational functionality to enable the card system or the card issuer to identify and deny authorization for a restricted transaction. Card systems may be able to develop one or more merchant category codes for gambling transactions that are not restricted transactions under the Act.

This, however, is NOT possible without properly designed guidelines ALLOWING a PROPER determination at to what business types are assigned a specific code.

You first note above that payment system operators are DECLINING to process legal transaction because of the risk then you state you believe the card systems have the necessary processes in place.
This obviously is NOT the case considering the former portion of you proposal as noted above concerning the declining of transaction, again, due to the risk created by lack of a defined guideline.

In you analysis, the proposal looks at creating a list of sites that should / should not be blocked as an option is not feasible. I agree, a defined list of sites is not possible as they do come and go.

With this in mind, I feel it only appropriate that a guiding definition of what constitutes UNLAWFUL Internet Gambling be established rather than a list of sites.

For example, one need only look at the state laws to see IF there is a SPECIFIC prohibition against Internet wagering an IF there are clauses or court rulings allowing / exempting games of Skill that by several state and at least one Federal Court in New Jersey have ruled games of skill / contests between players do NOT constitute gambling.

By adopting this simple standard and simply looking at which states these player to player / person to person contests ARE allowed in a simple coding system can be established, thus allowing the overblocking prevention portion of the UIGEA to be fulfilled.

This simple, but yet effective determination and analysis will alleviate the problems of overblocking, allow processors to properly create a coded system that will remove the risk of inadvertently processing illegal transaction while at the same time creating by proxy a virtual list of unlawful gambling sites AND a list of LAWFUL Gaming sites.

Sincerely

<SPAN>obg</SPAN>

<span>My regulation comment (finally). I am cross posting it here at the request of TE, and in hopes that it will inspire others to also post comments. Feel free to copy and paste to your hearts content!

December 10, 2007

Jennifer J. Johnson Department of the Treasury
Secretary Office of Critical Infrastructure
Board of Governors of the Federal Protection and Compliance Policy
Reserve System Room 1327
20th St. & Constitution Avenue, NW Main Treasury Building
Washington, DC 20551 1500 Pennsylvania Ave., NW
Washington, DC 20220

Re: FRB Docket No. R-1298; Treasury Docket No. DO-2007-0015; Prohibition on Funding of Unlawful Internet Gambling; 72 Federal Register 56680; October 4, 2007

Ladies and Gentlemen:

I am writing to express my concerns over the regulations presently proposed under the Unlawful Internet Gambling Enforcement Act. As an overview, it appears to me that these proposed regulations will have far more effect at deterring legal internet gaming than at stopping unlawful internet gambling. They are therefore not in accord with congressional intent and in serious need of further work.

Please note that I have distinguished the words �gaming� and �gambling� in the above paragraph. I have very little interest in gambling. Indeed, other than the occasional Las Vegas vacation, I have no interest in gambling at all. For the purposes of this letter I wholly accept the will of Congress as expressed in the UIGEA to hinder monetary transfers for unlawful internet gambling.

But nowhere in the UIGEA is the will expressed that it is necessary or desirable to sacrifice America�s internet gaming enthusiasts in order to more effectively deter America�s internet gambling enthusiasts. Indeed, it would appear that the will of Congress was exactly the opposite. In calling for regulations to enforce the act, one requirement is to �ensure that transactions in connections with any activity excluded from the definition of unlawful internet gambling in subparagraphs (B), (C) or (D)(i) of section 5362(10) are not blocked or otherwise prevented or prohibited by the prescribed regulations.� (page 233 of the legislation, lines 13-1.

It is the refusal of the regulations as currently proposed to make any provision for such concern that disturbs me greatly and makes the regulations both a mockery of congressional intent and an abrogation of executive responsibility.

I have been a enthusiast of games of skill all my life. From Checkers to Chess, from Bridge to Poker, from computer games to complex military simulations, I have found the playing of competitive games of skill a satisfying and enriching endeavor. With the advent of the internet, I have found a world of opportunity for game playing, against people from all across the globe, while surrounded by my family in the comfort of my own home. The failure of the regulations to distinguish between lawful skill gaming and unlawful gambling now threatens to end this benign and perfectly legal intellectual pastime of mine.

The card game of Poker is a good example of the issue. In researching the legality of playing online poker I discovered that the Federal Courts seem convinced that online poker does not violate the Federal Wire act (see, e.g., In re MasterCard Int�l, et al., 132 F. Supp. 2d 468, (E.D. La. 2001), upheld on appeal by the Fifth Circuit � 2002 C05 518 (USCA5, 2002)). Thus the only way online poker could be illegal would be if it violates state law. The law in my state of New Hampshire defines �gambling� as risking anything of value �on a future contingent event not under one�s control or influence....� NH RSA 647:2, II, (d). Some unfamiliar with the game think this applies to poker because a player cannot influence the cards. The problem with that reasoning, though, is that THE CARDS DO NOT ALWAYS OR ALONE DECIDE THE WINNER. In poker, as those familiar know, its not the best hand that wins, its the best hand of those left at the end of the betting, and if only one is left at any time he or she wins regardless of the cards. So while the players may not influence what the next card is, the players certainly and undeniably influence (through betting, raising and folding) who is there at the end to see the cards, and whether the cards are seen at all. POKER, THEREFORE, IS NOT GAMBLING UNDER NEW HAMPSHIRE LAW. (See, also: Opinion of the Justices, 73 NH 625 (1906) (distinguishing, under old law, wagering amongst players in a contest, and wagering on the contests of others, finding only the latter to be �gambling�).

On the other hand, betting on someone else�s sporting activity, a game of chance like roulette, or playing a slot machine, is certainly illegal under N.H. law, and those transactions should be blocked. I believe it is your responsibility to make this distinction clear to the financial institutions.

Now, of course, other states have different definitions of gambling, (some other states specifically prohibit or allow poker, for example). Until the UIGEA we in New Hampshire could easily ignore the laws of other states, and rightly choose to only abide by our own. If the regulations are adopted as written, that will almost certainly cease.

This is so because the UIGEA regulations as proposed fail to include any specific definition of what is and what is not �unlawful internet gambling.� At the same time the regulations have a specific exemption for financial institutions to prevent them from consequences for blocking legal internet gaming, and specify penalties for allowing unlawful internet gambling. In the regulations themselves, the writers note the extreme difficulty of defining �unlawful internet gambling� due to the open questions regarding state laws and the specific activity they may or may not cover. Obviously, if the regulation writers believe its too difficult to specifically define what is or is not �unlawful internet gambling� how can anyone reasonably expect the financial institutions to do it? In accord, The Center for Regulatory Effectiveness has recently issued an opinion indicating that such an endeavor is well nigh impossible for small to medium size financial institution and exceptionally costly for the larger ones.

So what will the financial institutions do if the current law and regulations are not changed? Obviously they have every incentive to block ANY transaction that might even remotely be labeled �unlawful internet gambling� and that will almost certainly include blocking transactions to any of the skill game internet sites that I and thousands of others enjoy playing legally on from the state of New Hampshire. I truly doubt any amount of writing, explaining and legal reasoning will convince any financial institution to leave their safe haven and venture into continuing to fund playing for residents of my state just because I, even as a New Hampshire lawyer, can present them with the proof that funding of play at Bridge sites, Chess sites, Wargaming sites, and, yes, Poker sites, does not violate any law.

The inescapable conclusion is that the proposed regulations� failure to do the hard work and complete a substantive list of what is and what is not a prohibited transaction will defy the Congress� intent and lead directly to the stopping of thousands if not millions of lawful internet gaming transactions. All to the detriment of lawful individual players and legitimate businesses. This must not stand. Although time consuming and difficult, it is certainly not impossible to do with all 50 states what I have done with New Hampshire; namely determine what is lawful and what is not. This is the task Congress imposed, and this is the task ignored in the current proposed regulations.

I ask you to rescind the proposed regulations and issue effective regulations which identify the illegal forms of gambling, game by game and state by state. Only in that way can the payment systems and participants implement the polices and procedures required by the Act without inadvertently and egregiously interfering with entirely legal activities.

"Skallagrim"</span>

<span>With the deadline for submission being tomorrow at midnight, here is my regulation comment (finally) -please send your own and feel free to steal from mine or anyone else's asmuch as you want :

December 10, 2007

Jennifer J. Johnson Department of the Treasury
Secretary Office of Critical Infrastructure
Board of Governors of the Federal Protection and Compliance Policy
Reserve System Room 1327
20th St. & Constitution Avenue, NW Main Treasury Building
Washington, DC 20551 1500 Pennsylvania Ave., NW
Washington, DC 20220

Re: FRB Docket No. R-1298; Treasury Docket No. DO-2007-0015; Prohibition on Funding of Unlawful Internet Gambling; 72 Federal Register 56680; October 4, 2007

Ladies and Gentlemen:

I am writing to express my concerns over the regulations presently proposed under the Unlawful Internet Gambling Enforcement Act. As an overview, it appears to me that these proposed regulations will have far more effect at deterring legal internet gaming than at stopping unlawful internet gambling. They are therefore not in accord with congressional intent and in serious need of further work.

Please note that I have distinguished the words �gaming� and �gambling� in the above paragraph. I have very little interest in gambling. Indeed, other than the occasional Las Vegas vacation, I have no interest in gambling at all. For the purposes of this letter I wholly accept the will of Congress as expressed in the UIGEA to hinder monetary transfers for unlawful internet gambling.

But nowhere in the UIGEA is the will expressed that it is necessary or desirable to sacrifice America�s internet gaming enthusiasts in order to more effectively deter America�s internet gambling enthusiasts. Indeed, it would appear that the will of Congress was exactly the opposite. In calling for regulations to enforce the act, one requirement is to �ensure that transactions in connections with any activity excluded from the definition of unlawful internet gambling in subparagraphs (B), (C) or (D)(i) of section 5362(10) are not blocked or otherwise prevented or prohibited by the prescribed regulations.� (page 233 of the legislation, lines 13-1.

It is the refusal of the regulations as currently proposed to make any provision for such concern that disturbs me greatly and makes the regulations both a mockery of congressional intent and an abrogation of executive responsibility.

I have been a enthusiast of games of skill all my life. From Checkers to Chess, from Bridge to Poker, from computer games to complex military simulations, I have found the playing of competitive games of skill a satisfying and enriching endeavor. With the advent of the internet, I have found a world of opportunity for game playing, against people from all across the globe, while surrounded by my family in the comfort of my own home. The failure of the regulations to distinguish between lawful skill gaming and unlawful gambling now threatens to end this benign and perfectly legal intellectual pastime of mine.

The card game of Poker is a good example of the issue. In researching the legality of playing online poker I discovered that the Federal Courts seem convinced that online poker does not violate the Federal Wire act (see, e.g., In re MasterCard Int�l, et al., 132 F. Supp. 2d 468, (E.D. La. 2001), upheld on appeal by the Fifth Circuit � 2002 C05 518 (USCA5, 2002)). Thus the only way online poker could be illegal would be if it violates state law. The law in my state of New Hampshire defines �gambling� as risking anything of value �on a future contingent event not under one�s control or influence....� NH RSA 647:2, II, (d). Some unfamiliar with the game think this applies to poker because a player cannot influence the cards. The problem with that reasoning, though, is that THE CARDS DO NOT ALWAYS OR ALONE DECIDE THE WINNER. In poker, as those familiar know, its not the best hand that wins, its the best hand of those left at the end of the betting, and if only one is left at any time he or she wins regardless of the cards. So while the players may not influence what the next card is, the players certainly and undeniably influence (through betting, raising and folding) who is there at the end to see the cards, and whether the cards are seen at all. POKER, THEREFORE, IS NOT GAMBLING UNDER NEW HAMPSHIRE LAW. (See, also: Opinion of the Justices, 73 NH 625 (1906) (distinguishing, under old law, wagering amongst players in a contest, and wagering on the contests of others, finding only the latter to be �gambling�).

On the other hand, betting on someone else�s sporting activity, a game of chance like roulette, or playing a slot machine, is certainly illegal under N.H. law, and those transactions should be blocked. I believe it is your responsibility to make this distinction clear to the financial institutions.

Now, of course, other states have different definitions of gambling, (some other states specifically prohibit or allow poker, for example). Until the UIGEA we in New Hampshire could easily ignore the laws of other states, and rightly choose to only abide by our own. If the regulations are adopted as written, that will almost certainly cease.

This is so because the UIGEA regulations as proposed fail to include any specific definition of what is and what is not �unlawful internet gambling.� At the same time the regulations have a specific exemption for financial institutions to prevent them from consequences for blocking legal internet gaming, and specify penalties for allowing unlawful internet gambling. In the regulations themselves, the writers note the extreme difficulty of defining �unlawful internet gambling� due to the open questions regarding state laws and the specific activity they may or may not cover. Obviously, if the regulation writers believe its too difficult to specifically define what is or is not �unlawful internet gambling� how can anyone reasonably expect the financial institutions to do it? In accord, The Center for Regulatory Effectiveness has recently issued an opinion indicating that such an endeavor is well nigh impossible for small to medium size financial institution and exceptionally costly for the larger ones.

So what will the financial institutions do if the current law and regulations are not changed? Obviously they have every incentive to block ANY transaction that might even remotely be labeled �unlawful internet gambling� and that will almost certainly include blocking transactions to any of the skill game internet sites that I and thousands of others enjoy playing legally on from the state of New Hampshire. I truly doubt any amount of writing, explaining and legal reasoning will convince any financial institution to leave their safe haven and venture into continuing to fund playing for residents of my state just because I, even as a New Hampshire lawyer, can present them with the proof that funding of play at Bridge sites, Chess sites, Wargaming sites, and, yes, Poker sites, does not violate any law.

The inescapable conclusion is that the proposed regulations� failure to do the hard work and complete a substantive list of what is and what is not a prohibited transaction will defy the Congress� intent and lead directly to the stopping of thousands if not millions of lawful internet gaming transactions. All to the detriment of lawful individual players and legitimate businesses. This must not stand. Although time consuming and difficult, it is certainly not impossible to do with all 50 states what I have done with New Hampshire; namely determine what is lawful and what is not. This is the task Congress imposed, and this is the task ignored in the current proposed regulations.

I ask you to rescind the proposed regulations and issue effective regulations which identify the illegal forms of gambling, game by game and state by state. Only in that way can the payment systems and participants implement the polices and procedures required by the Act without inadvertently and egregiously interfering with entirely legal activities.

"Skallagrim"</span>

<span>My regulation comment (finally):

December 10, 2007

Jennifer J. Johnson Department of the Treasury
Secretary Office of Critical Infrastructure
Board of Governors of the Federal Protection and Compliance Policy
Reserve System Room 1327
20th St. & Constitution Avenue, NW Main Treasury Building
Washington, DC 20551 1500 Pennsylvania Ave., NW
Washington, DC 20220

Re: FRB Docket No. R-1298; Treasury Docket No. DO-2007-0015; Prohibition on Funding of Unlawful Internet Gambling; 72 Federal Register 56680; October 4, 2007

Ladies and Gentlemen:

I am writing to express my concerns over the regulations presently proposed under the Unlawful Internet Gambling Enforcement Act. As an overview, it appears to me that these proposed regulations will have far more effect at deterring legal internet gaming than at stopping unlawful internet gambling. They are therefore not in accord with congressional intent and in serious need of further work.

Please note that I have distinguished the words �gaming� and �gambling� in the above paragraph. I have very little interest in gambling. Indeed, other than the occasional Las Vegas vacation, I have no interest in gambling at all. For the purposes of this letter I wholly accept the will of Congress as expressed in the UIGEA to hinder monetary transfers for unlawful internet gambling.

But nowhere in the UIGEA is the will expressed that it is necessary or desirable to sacrifice America�s internet gaming enthusiasts in order to more effectively deter America�s internet gambling enthusiasts. Indeed, it would appear that the will of Congress was exactly the opposite. In calling for regulations to enforce the act, one requirement is to �ensure that transactions in connections with any activity excluded from the definition of unlawful internet gambling in subparagraphs (B), (C) or (D)(i) of section 5362(10) are not blocked or otherwise prevented or prohibited by the prescribed regulations.� (page 233 of the legislation, lines 13-1.

It is the refusal of the regulations as currently proposed to make any provision for such concern that disturbs me greatly and makes the regulations both a mockery of congressional intent and an abrogation of executive responsibility.

I have been a enthusiast of games of skill all my life. From Checkers to Chess, from Bridge to Poker, from computer games to complex military simulations, I have found the playing of competitive games of skill a satisfying and enriching endeavor. With the advent of the internet, I have found a world of opportunity for game playing, against people from all across the globe, while surrounded by my family in the comfort of my own home. The failure of the regulations to distinguish between lawful skill gaming and unlawful gambling now threatens to end this benign and perfectly legal intellectual pastime of mine.

The card game of Poker is a good example of the issue. In researching the legality of playing online poker I discovered that the Federal Courts seem convinced that online poker does not violate the Federal Wire act (see, e.g., In re MasterCard Int�l, et al., 132 F. Supp. 2d 468, (E.D. La. 2001), upheld on appeal by the Fifth Circuit � 2002 C05 518 (USCA5, 2002)). Thus the only way online poker could be illegal would be if it violates state law. The law in my state of New Hampshire defines �gambling� as risking anything of value �on a future contingent event not under one�s control or influence....� NH RSA 647:2, II, (d). Some unfamiliar with the game think this applies to poker because a player cannot influence the cards. The problem with that reasoning, though, is that THE CARDS DO NOT ALWAYS OR ALONE DECIDE THE WINNER. In poker, as those familiar know, its not the best hand that wins, its the best hand of those left at the end of the betting, and if only one is left at any time he or she wins regardless of the cards. So while the players may not influence what the next card is, the players certainly and undeniably influence (through betting, raising and folding) who is there at the end to see the cards, and whether the cards are seen at all. POKER, THEREFORE, IS NOT GAMBLING UNDER NEW HAMPSHIRE LAW. (See, also: Opinion of the Justices, 73 NH 625 (1906) (distinguishing, under old law, wagering amongst players in a contest, and wagering on the contests of others, finding only the latter to be �gambling�).

On the other hand, betting on someone else�s sporting activity, a game of chance like roulette, or playing a slot machine, is certainly illegal under N.H. law, and those transactions should be blocked. I believe it is your responsibility to make this distinction clear to the financial institutions.

Now, of course, other states have different definitions of gambling, (some other states specifically prohibit or allow poker, for example). Until the UIGEA we in New Hampshire could easily ignore the laws of other states, and rightly choose to only abide by our own. If the regulations are adopted as written, that will almost certainly cease.

This is so because the UIGEA regulations as proposed fail to include any specific definition of what is and what is not �unlawful internet gambling.� At the same time the regulations have a specific exemption for financial institutions to prevent them from consequences for blocking legal internet gaming, and specify penalties for allowing unlawful internet gambling. In the regulations themselves, the writers note the extreme difficulty of defining �unlawful internet gambling� due to the open questions regarding state laws and the specific activity they may or may not cover. Obviously, if the regulation writers believe its too difficult to specifically define what is or is not �unlawful internet gambling� how can anyone reasonably expect the financial institutions to do it? In accord, The Center for Regulatory Effectiveness has recently issued an opinion indicating that such an endeavor is well nigh impossible for small to medium size financial institution and exceptionally costly for the larger ones.

So what will the financial institutions do if the current law and regulations are not changed? Obviously they have every incentive to block ANY transaction that might even remotely be labeled �unlawful internet gambling� and that will almost certainly include blocking transactions to any of the skill game internet sites that I and thousands of others enjoy playing legally on from the state of New Hampshire. I truly doubt any amount of writing, explaining and legal reasoning will convince any financial institution to leave their safe haven and venture into continuing to fund playing for residents of my state just because I, even as a New Hampshire lawyer, can present them with the proof that funding of play at Bridge sites, Chess sites, Wargaming sites, and, yes, Poker sites, does not violate any law.

The inescapable conclusion is that the proposed regulations� failure to do the hard work and complete a substantive list of what is and what is not a prohibited transaction will defy the Congress� intent and lead directly to the stopping of thousands if not millions of lawful internet gaming transactions. All to the detriment of lawful individual players and legitimate businesses. This must not stand. Although time consuming and difficult, it is certainly not impossible to do with all 50 states what I have done with New Hampshire; namely determine what is lawful and what is not. This is the task Congress imposed, and this is the task ignored in the current proposed regulations.

I ask you to rescind the proposed regulations and issue effective regulations which identify the illegal forms of gambling, game by game and state by state. Only in that way can the payment systems and participants implement the polices and procedures required by the Act without inadvertently and egregiously interfering with entirely legal activities.

"Skallagrim"</span>