[Todd Terry]

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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.

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This is both wrong and irrelevant.

It is wrong because under no reasonable reading of the phrase "game subject to chance" could poker not qualify. It is a game. It is subject to chance. Regulations are promulgated by the executive branch to implement legislation passed by Congress. It would be improper for a regulation to take a position at odds with the clear language of a statute. If this silly argument advocating a bizarre reading of statutory language is to be made anywhere, it needs to be made to a court in a lawsuit challenging the UIGEA, not to a regulatory agency.

It is also completely irrelevant. The UIGEA applies to unlawful Internet gambling. If online poker is not unlawful, the UIGEA doesn't apply. If adopted, this argument regarding "game subject to chance" would only support an argument that the UIGEA doesn't apply to online poker even though it is unlawful, which is silly.

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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.

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The underlying legislation deliberately, explicitly took no position on defining unlawful Internet gambling. Therefore, regulations implementing that legislation cannot do so, period. In addition, it would be improper, and probably unconstitutional, for the federal government, let alone a federal regulatory agency, to take positions regarding the meaning of ambiguous state laws.

Not to mention, why are we asking the executive branch, which includes the DoJ who has taken the legally indefensible position that online poker violates the Wire Act, to define whether online poker is illegal? If they were to do so, which they won't for the reasons set forth above, we wouldn't like the answer.

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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.

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This is a good point. It will probably fall on deaf ears, but it's worth saying.

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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.

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Unfortunately, this battle was lost a long time ago. Banks already are de facto agents of federal law enforcement. If you don't want your privacy invaded, the only alternative is to keep $2.8 million dollars in cash in your home, like a former WSOP final tablist.

There was an amusing article a while back in the Economist regarding the Patriot Act reporting provisions for banks. The banks, rather than risk severe penalties, took an overly expansive view of what needed to be disclosed to the Feds and literally buried them in an avalanche of data that was so big as to be completely useless because they lacked the manpower and tools to be able to wade through it.

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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.

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See point 2 above, this is essentially the same point as asking them to define "unlawful Internet gambling". While the sentence about federal case law is correct, it's been very few cases, and the legality of online poker has never been addressed directly by any court. I'd love to hear from either the PPA or the online poker industry why this has not been done via a declaratory judgment action. I'm pretty sure I know the answer.