[TheEngineer]

My submitted comment (x-posted from another thread):

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

Dear Secretary Johnson,

Following careful review the proposed regulations (Docket No. R-1298) implementing the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), I agree with the authors of the regulations - the regulations as proposed do have several weaknesses that are inherent to UIGEA itself. The primary risk is that of overblocking transactions to legal businesses.

I live in Kentucky. Internet horse race betting is legal here under the Interstate Horse Racing Act of 1978 (IHRA). Additionally, Internet poker is not illegal here under any state or federal law (federal case law has consistently held that the Wire Act applies only to sports betting). Despite the exclusion of the domestic horse racing industry operating under the auspices of the IHRA from the provisions of the Act, banks may choose to comply with these regulations by banning all Internet gambling transactions (as was noted in the proposed regulations themselves). I am concerned that these legal businesses will be unfairly affected by these regulations, affecting my ability to access and patronize these legal businesses.

An additional issue concerning overblocking is the risk of an illegal restraint of trade. As the United States recently lost its trade dispute (and its final appeal) with Antigua and Barbuda with regards to providing of cross-border betting services, additional restrictions via overblocking resulting from these regulations could result in either new or increased WTO penalties, especially as domestic financial transactions are largely excluded from these regulations.

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 last thing our country needs is more impediments to lawful financial transactions.

Thank you for your consideration.

Sincerely,

TheEngineer