Support the Payments Systems Protection Act (HR 6870)

• Technology is a driving force in society, for both businesses and consumers.

• Unfortunately, these gains can be trampled by government—through censorship, taxation, or regulation.

• The internet poses a challenge to standard notions of regulation, because it does not follow traditional political boundaries. A case in point is the government’s efforts to stamp out illegal online gambling.

• In 2006, Congress passed the “Unlawful Internet Gambling Enforcement Act,” calling for new regulations on banks and payment centers to block transactions for illegal online gambling.

• The problem is that the bill offered no definition of what constitutes illegal activity. Banks and credit card companies are not only required to comply with the law—they must also define the law.

• Should the law stand, banks and payment systems will be pressed into servitude as informants and enforcers, monitoring transaction information about individual internet users, and blocking transactions with what may actually be legal online businesses.

• Given the sweeping ramifications for individual privacy, policymakers should pay close attention to the impact this has on internet freedom.

• Banks and payment systems such as credit card companies would be strapped with significant compliance costs and paperwork burdens in order to monitor transactions and identify those determined to be illegal gambling.

• “The Payments System Protection Act of 2008” (H.R. 6870) makes clear that the law can be enforced against sports betting, which the courts have already said is illegal.

• It also requires the regulators to define exactly what “unlawful internet gambling” is prior to issuing broader regulations. This would substantially reduce the uncertainty and compliance burden for banks and payment centers.

• Federal encroachment on the internet to regulate various activities politicizes innovation and encourages government regulation of legitimate commercial activity.

• Federal efforts to identify particular internet transactions are a clear threat to individual rights and protections granted under the United States Constitution.

• Mandates to regulate online activity should not be taken lightly and should require a thorough assessment of both the costs and benefits.

• Each new mandate offers a greater foothold for government control over the future development of the internet. But the internet has been able to evolve into such a dynamic and valuable resource precisely because it was free from regulatory impediments.

• Moving forward in the dawn of a new technological era, it would be wise to avoid unnecessary mandates and take steps to protect internet freedom forever.

• Please support “The Online Payments System Protection Act.” (HR 6870) in order to clarify what the definition of “online gambling” is – and to protect online privacy for millions of Americans.