HR 1174 IHCommentsClose CommentsPermalink

112th CONGRESSCommentsClose CommentsPermalink

1st SessionCommentsClose CommentsPermalink

H. R. 1174CommentsClose CommentsPermalink

To amend title 31, United States Code, to provide for the licensing of Internet gambling activities by the Secretary of the Treasury, to provide for consumer protections on the Internet, to enforce the tax code, and for other purposes.CommentsClose CommentsPermalink

IN THE HOUSE OF REPRESENTATIVESCommentsClose CommentsPermalink

March 17, 2011CommentsClose CommentsPermalink

Mr. CAMPBELL (for himself, Mr. FRANK of Massachusetts, Mr. KING of New York, and Mr. PERLMUTTER) introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committees on the Judiciary and Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concernedCommentsClose CommentsPermalink

A BILLCommentsClose CommentsPermalink

To amend title 31, United States Code, to provide for the licensing of Internet gambling activities by the Secretary of the Treasury, to provide for consumer protections on the Internet, to enforce the tax code, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Internet Gambling Regulation, Consumer Protection, and Enforcement Act’.CommentsClose CommentsPermalink

SEC. 2. FEDERAL LICENSING REQUIREMENT FOR INTERNET GAMBLING OPERATORS.

(a) In General- Chapter 53 of title 31, United States Code, is amended by adding at the end the following new subchapter:CommentsClose CommentsPermalink

‘SUBCHAPTER V--REGULATION OF LAWFUL INTERNET GAMBLING

‘Sec. 5381. Congressional findings

‘The Congress finds the following:CommentsClose CommentsPermalink





‘(1) Since the development of the Internet, millions of people have chosen to gamble online, and today Internet gambling is offered by operators located in many different countries under a variety of licensing and regulatory regimes.CommentsClose CommentsPermalink





‘(2) Despite the increasing use of the Internet for gambling by persons in the United States, there is no Federal or State regulatory regime in place to protect United States citizens who choose to engage in this interstate activity, or to oversee operators to establish and enforce standards of integrity and fairness.CommentsClose CommentsPermalink





‘(3) In the United States, gambling activities, equipment, and operations have been subject to various forms of Federal and State control, regulation, and enforcement, with some form of gambling being permitted in nearly every State and by many Indian tribes.CommentsClose CommentsPermalink





‘(4) Internet gambling in the United States should be controlled by a strict Federal, State, and tribal licensing and regulatory framework to protect underage and otherwise vulnerable individuals, to ensure the games are fair, to address the concerns of law enforcement, and to enforce any limitations on the activity established by the States and Indian tribes.CommentsClose CommentsPermalink





‘(5) An effective Federal, State, and tribal licensing system would ensure that licenses are issued only to Internet gambling operators which meet strict criteria to protect consumers, and which--CommentsClose CommentsPermalink





‘(A) are in good financial and legal standing, and of good character, honesty, and integrity;CommentsClose CommentsPermalink





‘(B) utilize appropriate technology to determine the age and location of users;CommentsClose CommentsPermalink





‘(C) adopt and implement systems to protect minors and problem gamblers;CommentsClose CommentsPermalink





‘(D) adopt and implement systems to enforce any applicable Federal, State, and Indian tribe limitations on Internet gambling; andCommentsClose CommentsPermalink





‘(E) have in place risk-based methods to identify and combat money laundering and fraud relating to Internet gambling, and to protect the privacy and security of users.CommentsClose CommentsPermalink





‘(6) There is a need to extend the regulatory provisions of this Act to all persons, locations, equipment, practices, and associations related to Internet gambling, with each State and Indian tribe having the ability to limit Internet gambling operators from offering Internet gambling to persons located within its territory by opting out of the provisions of this Act.CommentsClose CommentsPermalink

‘Sec. 5382. Definitions

‘For purposes of this subchapter, the following definitions shall apply:CommentsClose CommentsPermalink





‘(1) APPLICANT- The term ‘applicant’ means any person who has applied for a license pursuant to this subchapter.CommentsClose CommentsPermalink





‘(2) BET OR WAGER- The term ‘bet or wager’ has the same meaning as in section 5362(1).CommentsClose CommentsPermalink





‘(3) ENFORCEMENT AGENT- The term ‘enforcement agent’ means any individual authorized by the Secretary to enforce the provisions of this subchapter and regulations prescribed under this subchapter.CommentsClose CommentsPermalink





‘(4) INDIAN LANDS AND INDIAN TRIBE- The terms ‘Indian lands’ and ‘Indian tribe’ have the same meanings as in section 4 of the Indian Gaming Regulatory Act.CommentsClose CommentsPermalink





‘(5) INTERNET- The term ‘Internet’ has the same meaning as in section 5362(5).CommentsClose CommentsPermalink





‘(6) LICENSEE- The term ‘licensee’ means an entity authorized to operate an Internet gambling facility in accordance with this subchapter.CommentsClose CommentsPermalink





‘(7) OPERATE AN INTERNET GAMBLING FACILITY- The term ‘operate an Internet gambling facility’ or ‘operation of an Internet gambling facility’ means the direction, management, supervision, or control of an Internet site through which bets or wagers are initiated, received, or otherwise made, whether by telephone, Internet, satellite, or other wire or wireless communication.CommentsClose CommentsPermalink





‘(8) SECRETARY- The term ‘Secretary’ means the Secretary of the Treasury, or any person designated by the Secretary.CommentsClose CommentsPermalink





‘(9) STATE- The term ‘State’ means any State of the United States, the District of Columbia, or any commonwealth, territory, or other possession of the United States.CommentsClose CommentsPermalink





‘(10) SPORTING EVENT- The term ‘sporting event’ means any athletic competition, whether professional, scholastic, or amateur.CommentsClose CommentsPermalink

‘Sec. 5383. Establishment and administration of licensing program

‘(a) Treasury Responsibilities- The Secretary shall have responsibility for the following activities:CommentsClose CommentsPermalink





‘(1) Exercising full regulatory jurisdiction over--CommentsClose CommentsPermalink





‘(A) the operation of Internet gambling facilities by licensees; andCommentsClose CommentsPermalink





‘(B) the licensure and regulation of all applicants, except to the extent that powers have been delegated to qualified State and tribal regulatory bodies pursuant to this subchapter.CommentsClose CommentsPermalink





‘(2) Prescribing such regulations as may be necessary to administer and enforce the requirements of this subchapter.CommentsClose CommentsPermalink





‘(3) Employing enforcement agents with sufficient training and experience to administer the requirements of this subchapter and the regulations prescribed under this subchapter.CommentsClose CommentsPermalink





‘(4) Enforcing the requirements of this subchapter through all appropriate means provided under this subchapter and other provisions of law.CommentsClose CommentsPermalink





‘(b) Internet Gambling Licensing Program-CommentsClose CommentsPermalink





‘(1) LICENSING REQUIRED FOR CERTAIN INTERNET GAMBLING- No person may operate an Internet gambling facility that knowingly accepts bets or wagers from persons located in the United States without a license issued by the Secretary in accordance with this subchapter.CommentsClose CommentsPermalink





‘(2) AUTHORITY UNDER VALID LICENSE- A licensee may accept bets or wagers from persons located in the United States, subject to the limitations set forth in this subchapter, so long as its license remains in good standing.CommentsClose CommentsPermalink





‘(c) Application for License-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Any person seeking authority to operate an Internet gambling facility offering services to persons in the United States may apply for a license issued by the Secretary.CommentsClose CommentsPermalink





‘(2) INFORMATION REQUIRED- Any application for a license under this subchapter shall contain such information as may be required by the Secretary, including the following:CommentsClose CommentsPermalink





‘(A) The criminal and credit history of the applicant, any senior executive and director of the applicant, and any person deemed to be in control of the applicant.CommentsClose CommentsPermalink





‘(B) The financial statements of the applicant.CommentsClose CommentsPermalink





‘(C) Documentation showing the corporate structure of the applicant and all related businesses and affiliates.CommentsClose CommentsPermalink





‘(D) Documentation containing detailed evidence of the applicant’s plan for complying with all applicable regulations should a license be issued, with particular emphasis on the applicant’s ability to--CommentsClose CommentsPermalink





‘(i) protect underage and problem gamblers;CommentsClose CommentsPermalink





‘(ii) ensure games are being operated fairly; andCommentsClose CommentsPermalink





‘(iii) comply with and address the concerns of law enforcement.CommentsClose CommentsPermalink





‘(E) Certification that the applicant agrees to submit to United States jurisdiction and all applicable United States laws relating to acceptance by the applicant of bets or wagers over the Internet from persons located in the United States and all associated activities.CommentsClose CommentsPermalink





‘(F) Certification that the applicant has established a corporate entity or other separate business entity in the United States, a majority of whose officers are United States persons and, if there is a board of directors, that the board is majority-controlled by directors who are United States persons.CommentsClose CommentsPermalink





‘(d) Standards for License Issuance; Suitability Qualifications and Disqualification Standards-CommentsClose CommentsPermalink





‘(1) SUITABILITY FOR LICENSING STANDARDS-CommentsClose CommentsPermalink





‘(A) IN GENERAL- No person shall be eligible to obtain a license unless the Secretary or an appropriate State officer or agency has determined, upon completion of a background check and investigation, that the applicant, and any person deemed to be in control of the applicant, is suitable for licensing.CommentsClose CommentsPermalink





‘(B) ASSOCIATES OF APPLICANTS- If the applicant is a corporation, partnership, or other business entity, a background check and investigation shall occur with respect to the president or other chief executive of the corporation, partnership, or other business entity and other partners or senior executives and directors of the corporation, partnership, or entity, as determined appropriate by the Secretary or any appropriate State or tribal officer or agency.CommentsClose CommentsPermalink





‘(C) BACKGROUND CHECK AND INVESTIGATION- The Secretary shall establish standards and procedures for conducting background checks and investigations for purposes of this subsection.CommentsClose CommentsPermalink





‘(2) SUITABILITY FOR LICENSING STANDARDS DESCRIBED- For purposes of this subchapter, an applicant and any other person associated with the applicant, as applicable, is suitable for licensing if the applicant demonstrates to the Secretary or appropriate State or tribal officer or agency by clear and convincing evidence that the applicant (or individual associated with the applicant, as applicable)--CommentsClose CommentsPermalink





‘(A) is a person of good character, honesty, and integrity;CommentsClose CommentsPermalink





‘(B) is a person whose prior activities, reputation, habits, and associations do not--CommentsClose CommentsPermalink





‘(i) pose a threat to the public interest or to the effective regulation and control of the licensed activities; orCommentsClose CommentsPermalink





‘(ii) create or enhance the dangers of unsuitable, unfair, or illegal practices, methods, and activities in the conduct of the licensed activities or the carrying on of the business and financial arrangements incidental to such activities;CommentsClose CommentsPermalink





‘(C) is capable of and likely to conduct the activities for which the applicant is licensed in accordance with the provisions of this subchapter and any regulations prescribed under this subchapter;CommentsClose CommentsPermalink





‘(D) has or guarantees acquisition of adequate business competence and experience in the operation of Internet gambling facilities; andCommentsClose CommentsPermalink





‘(E) has or will obtain sufficient financing for the nature of the proposed operation and from a suitable source.CommentsClose CommentsPermalink





‘(3) UNSUITABLE FOR LICENSING- An applicant or any other person may not be determined to be suitable for licensing within the meaning of this subchapter if the applicant or such person--CommentsClose CommentsPermalink





‘(A) has failed to provide information and documentation material to a determination of suitability for licensing under paragraph (1);CommentsClose CommentsPermalink





‘(B) has supplied information which is untrue or misleading as to a material fact pertaining to any such determination;CommentsClose CommentsPermalink





‘(C) has been convicted of an offense punishable by imprisonment of more than 1 year;CommentsClose CommentsPermalink





‘(D) is delinquent in filing any applicable Federal or State tax returns or in the payment of any taxes, penalties, additions to tax, or interest owed to a State or the United States;CommentsClose CommentsPermalink





‘(E) has, on or after the date of the enactment of the Unlawful Internet Gambling Enforcement Act of 2006--CommentsClose CommentsPermalink





‘(i) knowingly participated in, or should have known they were participating in, any illegal Internet gambling activity, including the taking of an illegal Internet wager, the payment of winnings on an illegal Internet wager, the promotion through advertising of any illegal Internet gambling Web site or service, or the collection of any payments to an entity operating an illegal Internet gambling Web site; orCommentsClose CommentsPermalink





‘(ii) knowingly been owned, operated, managed, or employed by, or should have known they were owned, operated, managed, or employed by, any person who was knowingly participating in, or should have known they were participating in, any illegal Internet gambling activity, including the taking of an illegal Internet wager, the payment of winnings on an illegal Internet wager, the promotion through advertising of any illegal Internet gambling Web site or service, or the collection of any payments to an entity operating an illegal Internet gambling Web site;CommentsClose CommentsPermalink





‘(F) has--CommentsClose CommentsPermalink





‘(i) received any assistance, financial or otherwise, from any person who has, before the date of the enactment of the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, knowingly accepted bets or wagers from a person located in the United States in violation of Federal or State law; orCommentsClose CommentsPermalink





‘(ii) provided any assistance, financial or otherwise, to any person who has, before the date of the enactment of the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, knowingly accepted bets or wagers from a person located in the United States in violation of Federal or State law;CommentsClose CommentsPermalink





‘(G) with respect to another entity that has accepted a bet or wager from any individual in violation of United States law, has purchased or otherwise obtained--CommentsClose CommentsPermalink





‘(i) such entity;CommentsClose CommentsPermalink





‘(ii) a list of the customers of such entity; orCommentsClose CommentsPermalink





‘(iii) any other part of the equipment or operations of such entity;CommentsClose CommentsPermalink





‘(H) is listed on a State gambling excluded persons list; orCommentsClose CommentsPermalink





‘(I) fails to certify in writing, under penalty of perjury, that the applicant or other such person, and all affiliated business entities (including all entities under common control), has through its entire history--CommentsClose CommentsPermalink





‘(i) not committed an intentional felony violation of Federal or State gambling laws; andCommentsClose CommentsPermalink





‘(ii) used diligence to prevent any United States person from placing a bet on an Internet site in violation of Federal or State gambling laws.CommentsClose CommentsPermalink





‘(4) APPEAL OF DETERMINATION- With respect to any applicant or other person that the Secretary determines is not suitable for licensing within the meaning of this subchapter by reason of subparagraph (E) or (F) of paragraph (3), and where the Secretary has not determined that such applicant or person was acting in their capacity as a managerial employee of an Internet gambling Web site, the Secretary shall establish an appeals process by which such applicant or person may appeal the Secretary’s determination.CommentsClose CommentsPermalink





‘(5) ONGOING REQUIREMENT- A licensee (and any other person who is required to be determined to be suitable for licensing in connection with such licensee) shall meet the standards necessary to be suitable for licensing throughout the term of the license.CommentsClose CommentsPermalink





‘(6) PROTECTION OF THE PUBLIC TRUST- The Secretary may take such action as is necessary to protect the public trust, including the implementation of such safeguards as may be necessary to ensure the operation of an Internet gambling facility licensed under this subchapter is controlled only by persons who are suitable for licensing.CommentsClose CommentsPermalink





‘(7) ENFORCEMENT ACTIONS-CommentsClose CommentsPermalink





‘(A) DETERMINATION OF UNSUITABILITY FOR CONTINUED LICENSURE- If the Secretary finds that an individual owner or holder of a security of a licensee, or of a holding or intermediary company of a licensee or any person with an economic interest in a licensee or a director, partner, or officer of a licensee is not suitable for licensing, the Secretary may determine that the licensee is not qualified to continue as a licensee.CommentsClose CommentsPermalink





‘(B) ACTION TO PROTECT THE PUBLIC INTEREST, INCLUDING SUSPENSION- If the Secretary may determine that the licensee is not qualified to continue as a licensee, the Secretary shall propose action necessary to protect the public interest, including, if deemed necessary, the suspension of the authority of the licensee to engage in licensed activities.CommentsClose CommentsPermalink





‘(C) IMPOSITION OF CONDITIONS INCLUDING REMOVAL OF PARTIES- Notwithstanding a determination under subparagraph (A), the Secretary may allow a licensee to continue engaging in licensed activities by imposing conditions on the licensee under penalty of revocation or suspension of the authority of the licensee to engage in licensed activities, including--CommentsClose CommentsPermalink





‘(i) the identification of any person determined to be unsuitable for licensing; andCommentsClose CommentsPermalink





‘(ii) the establishment of appropriate safeguards to ensure such person is excluded from any interest in the licensed activities.CommentsClose CommentsPermalink





‘(e) Assessments for Administrative Expenses-CommentsClose CommentsPermalink





‘(1) USER FEES-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The cost of administering this subchapter with respect to each licensee, including the cost of any review or examination of a licensee to ensure compliance with the terms of the license and this subchapter, shall be assessed by the Secretary against the licensee institution by written notice in an amount appropriate to meet the Secretary’s expenses in carrying out such administration, review, or examination.CommentsClose CommentsPermalink





‘(B) DISPOSITION- Amounts assessed by the Secretary as user fees under subparagraph (A) shall--CommentsClose CommentsPermalink





‘(i) be maintained by the Secretary solely for use in accordance with clause (ii);CommentsClose CommentsPermalink





‘(ii) be available to the Secretary to cover all expenses incurred by the Secretary in carrying out this subchapter; andCommentsClose CommentsPermalink





‘(iii) not be construed to be Government funds or appropriated monies, or subject to apportionment for the purposes of chapter 15 or any other authority.CommentsClose CommentsPermalink





‘(C) HEARING- Any licensee against whom an assessment is assessed under this paragraph shall be afforded an agency hearing if such person submits a request for such hearing within 20 days after the issuance of the notice of assessment.CommentsClose CommentsPermalink





‘(D) COLLECTION-CommentsClose CommentsPermalink





‘(i) REFERRAL- If any licensee fails to pay an assessment under this paragraph after the assessment has become final, the Secretary shall recover the amount assessed by action in the appropriate United States district court.CommentsClose CommentsPermalink





‘(ii) APPROPRIATENESS OF ASSESSMENT NOT REVIEWABLE- In any civil action under clause (i), the validity and appropriateness of the assessment shall not be subject to review.CommentsClose CommentsPermalink





‘(2) DIRECT AND EXCLUSIVE OBLIGATION OF LICENSEE- The user fee shall be the direct and exclusive obligation of the licensee and may not be deducted from amounts available as deposits to any person placing a bet.CommentsClose CommentsPermalink





‘(f) Approval of License- The Secretary shall grant licenses under this subchapter if the applicant meets the criteria set by the Secretary set forth in this subchapter and in any regulations promulgated thereunder.CommentsClose CommentsPermalink





‘(g) Safeguards Required of Licensee- No person may operate an Internet gambling facility in accordance with this subchapter unless the person maintains or requires mechanisms so that the following requirements, and the standards established under section 5384, are met with respect to any Internet bet or wager:CommentsClose CommentsPermalink





‘(1) LEGAL AGE- Appropriate safeguards to ensure that the individual placing a bet or wager is of legal age as defined by the law of the State or tribal area in which the individual is located at the time the bet or wager is placed.CommentsClose CommentsPermalink





‘(2) PERMISSIBLE LOCATION- Appropriate safeguards to ensure that the individual placing a bet or wager is physically located in a jurisdiction that permits Internet gambling at the time the bet or wager is placed.CommentsClose CommentsPermalink





‘(3) COLLECTION OF CUSTOMER TAXES- Appropriate mechanisms to ensure that all taxes relating to Internet gambling from persons engaged in Internet gambling are collected at the time of any payment of any proceeds of Internet gambling.CommentsClose CommentsPermalink





‘(4) COLLECTION OF TAXES OF LICENSEE- Appropriate mechanisms to ensure that all taxes relating to Internet gambling from any licensee are collected and disbursed as required by law, and that adequate records to enable later audit or verification are maintained.CommentsClose CommentsPermalink





‘(5) SAFEGUARDS AGAINST FINANCIAL CRIME- Appropriate safeguards to combat fraud, money laundering, and terrorist finance.CommentsClose CommentsPermalink





‘(6) SAFEGUARDS AGAINST COMPULSIVE GAMBLING- Appropriate safeguards to combat compulsive Internet gambling.CommentsClose CommentsPermalink





‘(7) PRIVACY SAFEGUARDS- Appropriate safeguards to protect the privacy and security of any person engaged in Internet gambling.CommentsClose CommentsPermalink





‘(8) PAYMENT OF ASSESSMENTS- Appropriate mechanisms to ensure that any assessment under subsection (e) is paid to the Secretary.CommentsClose CommentsPermalink





‘(9) OTHER REQUIREMENTS- Such other requirements as the Secretary may establish by regulation or order.CommentsClose CommentsPermalink





‘(h) Term and Renewal of License-CommentsClose CommentsPermalink





‘(1) TERM- Any license issued under this section shall be issued for a 5-year term beginning on the date of issuance.CommentsClose CommentsPermalink





‘(2) RENEWAL- Licenses may be renewed in accordance with the requirements prescribed by the Secretary pursuant to this subchapter.CommentsClose CommentsPermalink





‘(i) Revocation of License-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Any license granted under this subchapter may be revoked by the Secretary if--CommentsClose CommentsPermalink





‘(A) the licensee fails to comply with any provision of this subchapter;CommentsClose CommentsPermalink





‘(B) the licensee is determined to be unsuitable for licensing, within the meaning of this subchapter; orCommentsClose CommentsPermalink





‘(C) the licensee is determined to be targeting marketing or advertising materials at individuals who are not of legal age to place a bet or wager, as defined by the law of the State or tribal area in which the individuals are located.CommentsClose CommentsPermalink





‘(2) FINAL ACTION- Any revocation of a license under paragraph (1) shall be treated as a final action by the Secretary.CommentsClose CommentsPermalink





‘(j) Regulations- The regulations prescribed by the Secretary under this subchapter shall include regulations to fully implement--CommentsClose CommentsPermalink





‘(1) safeguards required for licensees under subsection (g); andCommentsClose CommentsPermalink





‘(2) the requirements for programs relating to the Problem Gambling, Responsible Gambling, and Self-Exclusion Program under section 5384.CommentsClose CommentsPermalink





‘(k) Administrative Provisions-CommentsClose CommentsPermalink





‘(1) GENERAL POWERS OF SECRETARY-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The Secretary shall have the authority to engage in the following:CommentsClose CommentsPermalink





‘(i) Investigate the suitability of each licensee to ensure compliance with this subchapter and regulations prescribed under this subchapter.CommentsClose CommentsPermalink





‘(ii) Require licensees to maintain appropriate procedures to ensure compliance with this subchapter and regulations prescribed under this subchapter.CommentsClose CommentsPermalink





‘(iii) Require licensees to maintain substantial facilities involved with the processing of bets or wagers from the United States within the United States.CommentsClose CommentsPermalink





‘(iv) Require that a majority of all of the employees of the applicant or licensee, and of its affiliated business entities, be residents or citizens of the United States. All entities under common control shall be considered affiliated business entities for the purposes of this subparagraph.CommentsClose CommentsPermalink





‘(v) Require licensees to maintain in the United States all facilities that are essential to the regulation of bets or wagers placed from the United States at a location that is accessible to the appropriate regulatory personnel at all times.CommentsClose CommentsPermalink





‘(vi) Examine any licensee and any books, papers, records, or other data of licensees relevant to any recordkeeping or reporting requirements imposed by the Secretary under this subchapter.CommentsClose CommentsPermalink





‘(vii) Require licensees to maintain all facilities within the United States for processing of bets or wagers made or placed from the United States.CommentsClose CommentsPermalink





‘(viii) When determined by the Secretary to be necessary, summon a licensee or an applicant for a license, an officer or employee of a licensee or any such applicant (including a former officer or employee), or any person having possession, custody, or care of the reports and records required by the Secretary under this subchapter, to appear before the Secretary or a designee of the Secretary at a time and place named in the summons and to produce such books, papers, records, or other data, and to give testimony, under oath, as may be relevant or material to any investigation in connection with the enforcement of this subchapter or any application for a license under this subchapter.CommentsClose CommentsPermalink





‘(ix) Investigate any violation of this subchapter and any regulation under this subchapter and any other violation of law relating to the operation of an Internet gambling facility.CommentsClose CommentsPermalink





‘(x) Conduct continuing reviews of applicants and licensees and the operation of Internet gambling facilities by use of technological means, onsite observation of facilities, including servers, or other reasonable means to assure compliance with this subchapter and any regulations promulgated hereunder.CommentsClose CommentsPermalink





‘(xi) Prohibit inappropriate advertising practices by licensees, including unsolicited emails targeting members of vulnerable populations, including problem gamblers and minors, or Internet advertising linked to search terms associated with children, problem gamblers, or other topics deemed inappropriate.CommentsClose CommentsPermalink





‘(B) EFFECT OF WTO RULING- Clauses (iii) and (iv) of subparagraph (A) shall cease to have effect if a tribunal of the World Trade Organization of final arbitration rules that the implementation of such clauses would violate the trade commitments of the United States under the World Trade Organization.CommentsClose CommentsPermalink





‘(2) CONSULTATION WITH INDIAN TRIBES- In implementing this subchapter, the Secretary shall conduct meaningful consultation with Indian tribes regarding all aspects of this subchapter which affect Indian tribes, both as potential licensing entities or operating entities.CommentsClose CommentsPermalink





‘(3) ADMINISTRATIVE ASPECTS OF SUMMONS-CommentsClose CommentsPermalink





‘(A) PRODUCTION AT DESIGNATED SITE- A summons issued pursuant to this subsection may require that books, papers, records, or other data stored or maintained at any place be produced at any business location of a licensee or applicant for a license or any designated location in any State or in any territory or other place subject to the jurisdiction of the United States not more than 500 miles distant from any place where the licensee or applicant for a license operates or conducts business in the United States.CommentsClose CommentsPermalink





‘(B) NO LIABILITY FOR EXPENSES- The United States shall not be liable for any expense incurred in connection with the production of books, papers, records, or other data under this subsection.CommentsClose CommentsPermalink





‘(C) SERVICE OF SUMMONS- Service of a summons issued under this subsection may be by registered mail or in such other manner calculated to give actual notice as the Secretary may prescribe by regulation.CommentsClose CommentsPermalink





‘(4) CONTUMACY OR REFUSAL-CommentsClose CommentsPermalink





‘(A) REFERRAL TO ATTORNEY GENERAL- In case of contumacy by a person issued a summons under this subsection or a refusal by such person to obey such summons or to allow the Secretary to conduct an examination, the Secretary shall refer the matter to the Secretary of the Treasury for referral to the Attorney General.CommentsClose CommentsPermalink





‘(B) JURISDICTION OF COURT- The Attorney General may invoke the aid of any court of the United States to compel compliance with the summons within the jurisdiction of which--CommentsClose CommentsPermalink





‘(i) the investigation which gave rise to the summons or the examination is being or has been carried on;CommentsClose CommentsPermalink





‘(ii) the person summoned is an inhabitant; orCommentsClose CommentsPermalink





‘(iii) the person summoned carries on business or may be found.CommentsClose CommentsPermalink





‘(C) COURT ORDER- The court may issue an order requiring the person summoned to appear before the Secretary or a delegate of the Secretary to produce books, papers, records, and other data, to give testimony as may be necessary to explain how such material was compiled and maintained, to allow the Secretary to examine the business of a licensee, and to pay the costs of the proceeding.CommentsClose CommentsPermalink





‘(D) FAILURE TO COMPLY WITH ORDER- Any failure to obey the order of the court may be punished by the court as a contempt thereof.CommentsClose CommentsPermalink





‘(E) SERVICE OF PROCESS- All process in any case under this subsection may be served in any judicial district in which such person may be found.CommentsClose CommentsPermalink





‘(5) COMPILATION OF DATASETS ON PLAYER BEHAVIOR-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The Secretary shall compile and make available to the public, on the Web site of the Secretary, datasets on player behavior.CommentsClose CommentsPermalink





‘(B) REGULATIONS REQUIRING SUBMISSION OF INFORMATION- The Secretary shall prescribe regulations to require licensees under this subchapter to provide information on player behavior that the Secretary determines is appropriate for the datasets under subparagraph (A).CommentsClose CommentsPermalink





‘(C) INFORMATION REQUIRED TO BE INCLUDED- Datasets prepared under this paragraph shall include information on any individual player, if requested by the Secretary, including but not limited to information concerning gambling frequency, gaming duration, the amount wagered, the number of bets placed, and net losses, provided that such request complies with the provisions of subparagraph (D).CommentsClose CommentsPermalink





‘(D) PROTECTION OF PRIVACY- All information provided pursuant to this paragraph shall be aggregated and anonymized, and shall not contain information that either alone or in combination with other data elements would permit identification of any individual player.CommentsClose CommentsPermalink





‘(l) Civil Money Penalties-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The Secretary may assess upon any licensee or other person subject to the requirements of this subchapter for any willful violation of this subchapter or any regulation prescribed or order issued under this subchapter, a civil penalty of not more than the greater of--CommentsClose CommentsPermalink





‘(A) the amount (not to exceed $100,000) involved in the violation, if any; orCommentsClose CommentsPermalink





‘(B) $25,000.CommentsClose CommentsPermalink





‘(2) ASSESSMENT-CommentsClose CommentsPermalink





‘(A) WRITTEN NOTICE- Any penalty imposed under paragraph (1) may be assessed and collected by the Secretary by written notice.CommentsClose CommentsPermalink





‘(B) FINALITY OF ASSESSMENT- If, with respect to any assessment under paragraph (1), a hearing is not requested pursuant to subparagraph (E) within the period of time allowed under such subparagraph, the assessment shall constitute a final and unappealable order.CommentsClose CommentsPermalink





‘(C) AUTHORITY TO MODIFY OR REMIT PENALTY- The Secretary may compromise, modify, or remit any penalty which the Secretary may assess or has already assessed under paragraph (1).CommentsClose CommentsPermalink





‘(D) MITIGATING FACTORS- In determining the amount of any penalty imposed under paragraph (1), the Secretary shall take into account the appropriateness of the penalty with respect to--CommentsClose CommentsPermalink





‘(i) the size of the financial resources and the good faith of the person against whom the penalty is assessed;CommentsClose CommentsPermalink





‘(ii) the gravity of the violation;CommentsClose CommentsPermalink





‘(iii) the history of previous violations; andCommentsClose CommentsPermalink





‘(iv) such other matters as justice may require.CommentsClose CommentsPermalink





‘(E) HEARING- The person against whom any penalty is assessed under paragraph (1) shall be afforded an agency hearing if such person submits a request for such hearing within 20 days after the issuance of the notice of assessment.CommentsClose CommentsPermalink





‘(F) COLLECTION-CommentsClose CommentsPermalink





‘(i) REFERRAL- If any person fails to pay an assessment after any penalty assessed under this paragraph has become final, the Secretary shall recover the amount assessed by action in the appropriate United States district court.CommentsClose CommentsPermalink





‘(ii) APPROPRIATENESS OF PENALTY NOT REVIEWABLE- In any civil action under clause (i), the validity and appropriateness of the penalty shall not be subject to review.CommentsClose CommentsPermalink





‘(G) DISBURSEMENT- All penalties collected under authority of this subsection shall be deposited into the Treasury.CommentsClose CommentsPermalink





‘(3) CONDITION FOR LICENSURE- Payment by a licensee of any civil penalty assessed under this subsection that has become final shall be a requirement for the retention of its license.CommentsClose CommentsPermalink





‘(m) Treatment of Records- In light of business competition, confidentiality, and privacy concerns, the Secretary shall protect from disclosure information submitted in support of a license application under this subchapter and information collected in the course of regulating licensees to the full extent permitted by sections 552 and 552a of title 5.CommentsClose CommentsPermalink





‘(n) Suitability for Licensing Requirements for Certain Service Providers-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Any person that knowingly--CommentsClose CommentsPermalink





‘(A) manages, administers, or controls bets or wagers that are initiated, received, or otherwise made within the United States,CommentsClose CommentsPermalink





‘(B) otherwise manages or administers the games with which such bets or wagers are associated, orCommentsClose CommentsPermalink





‘(C) develops, maintains or operates, or distributes or makes available for downloading software, other system programs or hardware that create, operate, or otherwise affect the outcome of a game,CommentsClose CommentsPermalink





shall meet all of the suitability for licensing criteria established under this section in the same manner and to the same extent as if that person were itself a licensee.CommentsClose CommentsPermalink





‘(2) SUITABILITY FOR LICENSING REQUIREMENTS FOR CERTAIN SERVICE PROVIDERS- Any failure on the part of person described in any subparagraph of paragraph (1) to remain suitable for licensing shall be grounds for revocation of the authority of the licensee for whom such service is provided to operate an Internet gambling facility, in the same manner and in accordance with subsection (i).CommentsClose CommentsPermalink





‘(o) Reliance on State and Tribal Regulatory Body Certifications of Suitability for Applicants-CommentsClose CommentsPermalink





‘(1) QUALIFICATION OF STATE AND TRIBAL REGULATORY BODIES-CommentsClose CommentsPermalink





‘(A) APPLICATION FOR DETERMINATION- Any State or tribal regulatory body with expertise in regulating gambling may--CommentsClose CommentsPermalink





‘(i) notify the Secretary of its willingness to review prospective applicants to certify whether any such applicant meets the qualifications established under this subchapter; andCommentsClose CommentsPermalink





‘(ii) provide the Secretary with such documentation as the Secretary determines necessary for the Secretary to determine whether such State or tribal regulatory body is qualified to conduct such review and may be relied upon by the Secretary to make any such certification.CommentsClose CommentsPermalink





‘(B) DETERMINATION AND NOTICE- Within 60 days after receiving any notice under subparagraph (A)(i), the Secretary shall--CommentsClose CommentsPermalink





‘(i) make the determination as to whether a State or tribal regulatory body is qualified to conduct a review of prospective applicants and may be relied upon to certify whether any such applicant meets the qualifications established under this subchapter; andCommentsClose CommentsPermalink





‘(ii) notify the State or tribal regulatory body of such determination.CommentsClose CommentsPermalink





‘(2) ACTIONS BY QUALIFIED AUTHORITIES- During the period that any determination of qualification under paragraph (1)(B) is in effect with respect to any such State or tribal regulatory body, the State or tribal regulatory body--CommentsClose CommentsPermalink





‘(A) may undertake reviews of any applicant to determine whether the applicant or any person associated with the applicant meets the criteria for suitability for licensing established under this subchapter;CommentsClose CommentsPermalink





‘(B) may impose on each such applicant an administrative fee or assessment for conducting such review in an amount the regulatory body determines to be necessary to meet its expenses in the conduct of such review; andCommentsClose CommentsPermalink





‘(C) shall process and assess each applicant fairly and equally based on objective criteria, regardless of any prior licensing of an applicant by the State or tribal regulatory body.CommentsClose CommentsPermalink





‘(3) RELIANCE ON STATE OR TRIBAL CERTIFICATION- Any applicant may provide a certification of suitability for licensing made by any State or tribal regulatory body under paragraph (2), together with all documentation the applicant has submitted to any such State or tribal regulatory body, to the Secretary, and any such certification and documentation shall be relied on by the Secretary as evidence that an applicant has met the suitability for licensing requirements under this section.CommentsClose CommentsPermalink





‘(4) AUTHORITY OF SECRETARY TO REVIEW- Notwithstanding any certification of suitability for licensing made by any State or tribal regulatory body, the Secretary retains the authority to review, withhold, or revoke any license if the Secretary has reason to believe that any applicant or licensee does not meet the suitability requirements for licensing established under this section, or any other requirement of a licensee.CommentsClose CommentsPermalink





‘(5) RELIANCE ON QUALIFIED REGULATORY BODY FOR OTHER PURPOSES, INCLUDING EXAMINATION AND ENFORCEMENT- The Secretary shall rely on any State and tribal regulatory body found qualified under this subsection for such other regulatory and enforcement activities as the Secretary finds to be useful and appropriate to carry out the purposes of this subchapter, including authority under paragraph (6).CommentsClose CommentsPermalink





‘(6) ADDITIONAL AUTHORITY OF QUALIFIED STATE OR TRIBAL AUTHORITIES- The qualified state or tribal authorities may--CommentsClose CommentsPermalink





‘(A) examine licensees who are licensed under a State or tribal program referred to in paragraph (1);CommentsClose CommentsPermalink





‘(B) employ enforcement agents with sufficient training and experience to administer the requirements of this subchapter; andCommentsClose CommentsPermalink





‘(C) enforce any requirement of this subchapter that is within the jurisdiction of the qualified state or tribal authority through all appropriate means provided under this subchapter and other provisions of law.CommentsClose CommentsPermalink





‘(7) REVOCATION OF QUALIFICATION- The Secretary may revoke, at any time and for any reason, the qualification of any State or tribal regulatory body to certify or to conduct any other regulatory or enforcement activity to carry out the purposes of this subchapter.CommentsClose CommentsPermalink





‘(p) Prevention of Minors From Placing Bets or Wagers- The Secretary shall--CommentsClose CommentsPermalink





‘(1) frequently monitor, evaluate, and measure compliance effectiveness of each licensee’s software, mechanisms, and other systems for preventing minors from placing bets or wagers through the Internet site of the licensee; andCommentsClose CommentsPermalink





‘(2) impose a sanction of either a fine, a revocation of license, or both, on a licensee whose minor protection software, mechanisms, and other systems are found to be insufficiently effective.CommentsClose CommentsPermalink





‘(q) Requirements With Respect to Child Support Delinquents-CommentsClose CommentsPermalink





‘(1) IN GENERAL- When it is made known to the Secretary by a Federal or State court or a competent State agency involved with the administration or enforcement of a court-ordered child support payment that a particular individual is delinquent with respect to court-ordered child support payments, the Secretary shall include that individual on the list established under section 5384(c)(1)(A).CommentsClose CommentsPermalink





‘(2) REMOVAL FROM LIST- Individuals placed on the list pursuant to paragraph (1) shall be removed from such list if the court or agency that made such individual’s delinquency known to the Secretary notifies the Secretary that such individual is no longer delinquent.CommentsClose CommentsPermalink

‘Sec. 5384. Problem Gambling, Responsible Gambling, Consumer Safeguards, and Self-Exclusion Program

‘(a) Regulations Required- The Secretary and any State or tribal regulatory body that has been qualified under subsection 5383(o) shall prescribe regulations for the development of a Problem Gambling, Responsible Gambling, Consumer Safeguards, and Self-Exclusion Program on the basis of standards that each licensee shall implement as a condition of licensure.CommentsClose CommentsPermalink





‘(b) Minimum Requirements-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Any application for a license shall include a submission to the Secretary or qualified State or tribal regulatory body setting forth a comprehensive program that is intended--CommentsClose CommentsPermalink





‘(A) to verify the identity and age of each customer through the use of commercially available data sources or any approved government database that is available for access in real-time through an automated process;CommentsClose CommentsPermalink





‘(B) to ensure that no customers under the legal age 21 may initiate or otherwise make any bets or wagers for real money;CommentsClose CommentsPermalink





‘(C) to verify the State or tribal land in which the customer is located at the time the customer attempts to initiate a bet or wager;CommentsClose CommentsPermalink





‘(D) to ensure that no customer who is located in a State or tribal land that opts out pursuant to section 5387 can initiate or otherwise make a bet or wager prohibited by such opt-out;CommentsClose CommentsPermalink





‘(E) to ensure that responsible gambling materials including materials on problem gambling, services and resources to address problem gambling, descriptions of games offered by the licensee, and when appropriate, odds of winning or payout rates of games, and any other materials that the Secretary or qualified State or tribal regulatory body may deem appropriate are made available to customers;CommentsClose CommentsPermalink





‘(F) to make available player-selectable responsible gambling options that may include, as appropriate to specific gambling games, a stake limit, loss limit, time-based loss limits, deposit limit, session time limit, time-based exclusion from all gambling and other similar options that the Secretary or qualified State or tribal regulatory body may deem appropriate and require to be made available;CommentsClose CommentsPermalink





‘(G) to require each customer, before making or placing any bet or wager, to establish personal limits as a condition of play that apply across all betting sites, which may be in hourly, daily, weekly or monthly increments, at the discretion of the customer;CommentsClose CommentsPermalink





‘(H) to protect the privacy and security of any customer in connection with any lawful Internet gambling activity;CommentsClose CommentsPermalink





‘(I) to protect against fraud and to provide for dispute resolution relating to internet gambling activity through programs to insure the integrity and fairness of the games; andCommentsClose CommentsPermalink





‘(J) to protect against money laundering relating to Internet gambling activities.CommentsClose CommentsPermalink





‘(2) REQUIREMENTS FOR PROGRAMS ENSURING INTEGRITY AND FAIRNESS- The programs referred to in paragraph (1)(I) to insure the integrity and fairness of the games shall include requirements for--CommentsClose CommentsPermalink





‘(A) real-time, multiparty cryptographic protocols for random number generation where one of the parties is the player;CommentsClose CommentsPermalink





‘(B) secure audit trails;CommentsClose CommentsPermalink





‘(C) detailed player betting logs that record and store each wager placed by the player;CommentsClose CommentsPermalink





‘(D) real time confirmation of high value bets or wagers, where appropriate; orCommentsClose CommentsPermalink





‘(E) equally effective options that the Secretary or qualified State or tribal regulatory officer or agency may determine to be appropriate.CommentsClose CommentsPermalink





‘(c) Periodic Review-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The Secretary shall, on a regular basis, review the minimum requirements under this section and may, based on the best available technology, update the standards that each licensee shall implement as a condition of licensure.CommentsClose CommentsPermalink





‘(2) CONSULTATION- In conducting the review required under paragraph (1), the Secretary shall consult with--CommentsClose CommentsPermalink





‘(A) State and tribal gaming regulatory officials;CommentsClose CommentsPermalink





‘(B) law enforcement officials;CommentsClose CommentsPermalink





‘(C) experts in underage and problem gaming;CommentsClose CommentsPermalink





‘(D) experts on individual privacy;CommentsClose CommentsPermalink





‘(E) consumers;CommentsClose CommentsPermalink





‘(F) on-line retailers of other age restricted materials such as tobacco and alcohol products;CommentsClose CommentsPermalink





‘(G) licensees and other representatives of the gaming industry;CommentsClose CommentsPermalink





‘(H) software developers with expertise in gaming, privacy, the payments systems available, and other relevant areas; andCommentsClose CommentsPermalink





‘(I) such other relevant individuals as the Secretary may determine to be appropriate.CommentsClose CommentsPermalink





‘(d) List of Persons Self-Excluded From Gambling Activities-CommentsClose CommentsPermalink





‘(1) ESTABLISHMENT-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The Secretary shall provide by regulation for the establishment of a list of persons self-excluded from gambling activities at all licensee sites.CommentsClose CommentsPermalink





‘(B) PLACEMENT REQUEST- Any person may request placement on the list of self-excluded persons by--CommentsClose CommentsPermalink





‘(i) acknowledging in a manner to be established by the Secretary that the person wishes to be denied gambling privileges; andCommentsClose CommentsPermalink





‘(ii) agreeing that, during any period of voluntary exclusion, the person may not collect any winnings or recover any losses resulting from any gambling activity at any licensee sites.CommentsClose CommentsPermalink





‘(2) PLACEMENT AND REMOVAL PROCEDURES- The regulations prescribed by the Secretary under paragraph (1)(A) shall establish procedures for placements on, and removals from, the list of self-excluded persons.CommentsClose CommentsPermalink





‘(3) LIMITATION ON LIABILITY-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The United States, the Secretary, an enforcement agent, or a licensee, or any employee or agent of the United States, the Secretary, an enforcement agent, or a licensee, shall not be liable to any self-excluded person or to any other party in any judicial or administrative proceeding for any harm, monetary or otherwise, which may arise as a result of--CommentsClose CommentsPermalink





‘(i) any failure to withhold gambling privileges from, or to restore gambling privileges to, a self-excluded person; orCommentsClose CommentsPermalink





‘(ii) otherwise permitting a self-excluded person to engage in gambling activity while on the list of self-excluded persons.CommentsClose CommentsPermalink





‘(B) RULE OF CONSTRUCTION- No provision of subparagraph (A) shall be construed as preventing the Director from assessing any regulatory sanction against a licensee for failing to comply with the minimum standards prescribed pursuant to this subsection.CommentsClose CommentsPermalink





‘(4) DISCLOSURE PROVISIONS-CommentsClose CommentsPermalink





‘(A) IN GENERAL- Notwithstanding any other provision of Federal or State law, the list of self-excluded persons shall not be open to public inspection.CommentsClose CommentsPermalink





‘(B) AFFILIATE DISCLOSURE- Any licensees may disclose the identities of persons on the self-excluded list to any affiliated company or, where required to comply with this subsection, any service provider, to the extent that the licensee ensures that any affiliated company or service provider maintains such information under confidentiality provisions comparable to those in this subsection.CommentsClose CommentsPermalink





‘(5) LIMITATION ON LIABILITY FOR DISCLOSURE- A licensee or an employee, agent, or affiliate of a licensee shall not be liable to any self-excluded person or to any other party in any judicial proceeding for any harm, monetary or otherwise, which may arise as a result of disclosure or publication in any manner.CommentsClose CommentsPermalink





‘(e) Gambling by Prohibited Persons-CommentsClose CommentsPermalink





‘(1) PROHIBITION BENEFITTING FROM PROHIBITED GAMBLING ACTIVITY- A person who is prohibited from gambling with a licensee by law, or by order of the Secretary or any court of competent jurisdiction, including any person on the self-exclusion list as established in accordance with subsection (d), shall not collect, in any manner or proceeding, any winnings or recover any losses arising as a result of any prohibited gambling activity.CommentsClose CommentsPermalink





‘(2) FORFEITURE- In addition to any other penalty provided by law, any money or thing of value that has been obtained by, or is owed to, any prohibited person by a licensee as a result of bets or wagers made by a prohibited person shall be subject to forfeiture by order of the Secretary, following notice to the prohibited person and opportunity to be heard.CommentsClose CommentsPermalink





‘(3) DEPOSIT OF FORFEITED FUNDS- Any funds forfeited pursuant to this subsection shall be deposited into the general fund of the Treasury.CommentsClose CommentsPermalink





‘(4) PERSONS SELF-EXCLUDED- Licensees may not accept bets or wagers from persons on the list established pursuant to subsection (d)(1)(A).CommentsClose CommentsPermalink





‘(f) Problem or Compulsive Gamblers Not on the List of Self-Excluded Persons-CommentsClose CommentsPermalink





‘(1) PUBLIC AWARENESS PROGRAM-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The Secretary and any State or tribal regulatory body that has been qualified under subsection 5383(o) shall provide by regulation for the establishment of a program to alert the public to the existence, consequences, and availability of the self-exclusion list, and shall prepare and promulgate written materials to be used in such a program.CommentsClose CommentsPermalink





‘(B) LICENSEE-PROVIDED PUBLICITY- Regulations prescribed under subparagraph (A) may require a licensee to make available literature or screen displays relating to the existence of the program.CommentsClose CommentsPermalink





‘(2) RULE OF CONSTRUCTION- No provision of this subsection shall be construed as creating a legal duty in the Secretary, a qualified State or tribal regulatory body, a licensee, or any representative of a licensee to identify or to exclude problem or compulsive gamblers not on the list of self-excluded persons.CommentsClose CommentsPermalink





‘(3) IMMUNITY- The United States, the Secretary, a qualified State or tribal regulatory body, a licensee, and any employee or agent of a licensee, shall not be liable to any person in any proceeding for losses or other damages of any kind arising out of that person’s gambling activities based on a claim that the person was a compulsive, problem, or pathological gambler.CommentsClose CommentsPermalink

‘Sec. 5385. Financial transaction providers

‘(a) In General- No financial transaction provider shall be held liable for engaging in financial activities and transactions for or on behalf of a licensee or involving a licensee, including payments processing activities, unless such provider has knowledge that the specific financial activities or transactions are conducted in violation of this subchapter and with applicable Federal and State laws.CommentsClose CommentsPermalink





‘(b) Definitions- For purposes of this section, the following definitions shall apply:CommentsClose CommentsPermalink





‘(1) FINANCIAL TRANSACTION PROVIDER- The term ‘financial transaction provider’ means a creditor, credit card issuer, financial institution, operator of a terminal at which an electronic fund transfer may be initiated, money transmitting business, or international, national, regional, or local payment network utilized to effect a credit transaction, electronic fund transfer, stored value product transaction, or money transmitting service, or a participant in such network, or other participant in a payment system.CommentsClose CommentsPermalink





‘(2) OTHER TERMS-CommentsClose CommentsPermalink





‘(A) CREDIT, CREDITOR, CREDIT CARD, AND CARD ISSUER- The terms ‘credit’, ‘creditor’, ‘credit card’, and ‘card issuer’ have the meanings given the terms in section 103 of the Truth in Lending Act.CommentsClose CommentsPermalink





‘(B) ELECTRONIC FUND TRANSFER- The term ‘electronic fund transfer’--CommentsClose CommentsPermalink





‘(i) has the meaning given the term in section 903 of the Electronic Fund Transfer Act, except that the term includes transfers that would otherwise be excluded under section 903(6)(E) of such Act; andCommentsClose CommentsPermalink





‘(ii) includes any fund transfer covered by Article 4A of the Uniform Commercial Code, as in effect in any State.CommentsClose CommentsPermalink





‘(C) FINANCIAL INSTITUTION- The term ‘financial institution’ has the meaning given the term in section 903 of the Electronic Fund Transfer Act, except that such term does not include a casino, sports book, or other business at or through which bets or wagers may be placed or received.CommentsClose CommentsPermalink





‘(D) INSURED DEPOSITORY INSTITUTION- The term ‘insured depository institution’--CommentsClose CommentsPermalink





‘(i) has the meaning given the term in section 3(c) of the Federal Deposit Insurance Act; andCommentsClose CommentsPermalink





‘(ii) includes an insured credit union (as defined in section 101 of the Federal Credit Union Act).CommentsClose CommentsPermalink





‘(E) MONEY TRANSMITTING BUSINESS AND MONEY TRANSMITTING SERVICE- The terms ‘money transmitting business’ and ‘money transmitting service’ have the meanings given the terms in section 5330(d) (determined without regard to any regulations prescribed by the Secretary under such section).CommentsClose CommentsPermalink

‘Sec. 5386. List of unlawful Internet gambling enterprises

‘(a) Definitions- For purposes of this section, the following definitions shall apply:CommentsClose CommentsPermalink





‘(1) UNLAWFUL INTERNET GAMBLING ENTERPRISE- The term ‘unlawful Internet gambling enterprise’ means any person who, more than 10 days after the date of the enactment of this section--CommentsClose CommentsPermalink





‘(A) violates a provision of section 5363;CommentsClose CommentsPermalink





‘(B) knowingly receives or transmits funds intended primarily for a person described in subparagraph (A); orCommentsClose CommentsPermalink





‘(C) knowingly assists in the conduct of a person described in subparagraph (A) or (B).CommentsClose CommentsPermalink





‘(2) DIRECTOR- The term ‘Director’ means the Director of the Financial Crimes Enforcement Network.CommentsClose CommentsPermalink





‘(b) List of Unlawful Internet Gambling Enterprises-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Not later than 120 days after the date of the enactment of this section, the Director shall submit to the Secretary a list of unlawful Internet gambling enterprises and shall regularly update such list in accordance with the procedures described in paragraph (3).CommentsClose CommentsPermalink





‘(2) CONTENTS OF LIST- The list prepared under paragraph (1) shall include the following information for each such unlawful Internet gambling enterprise:CommentsClose CommentsPermalink





‘(A) All known Internet Web site addresses of the enterprise.CommentsClose CommentsPermalink





‘(B) The names of all known owners and operators of the enterprise.CommentsClose CommentsPermalink





‘(C) To the extent known, information identifying the financial agents and account numbers of the enterprise and the persons listed under subparagraph (B).CommentsClose CommentsPermalink





‘(3) DISTRIBUTION OF LIST BY SECRETARY- The Secretary shall make available--CommentsClose CommentsPermalink





‘(A) a copy of the information provided under subparagraphs (A) and (B) of paragraph (2) on the Internet Web site of the Secretary of the Treasury;CommentsClose CommentsPermalink





‘(B) to all persons who are required to comply with the regulations prescribed under the authority provided in section 5364 a copy of all the information provided under paragraph (1) in an electronic format compatible with the Specially Designated Nationals list maintained by the Office of Foreign Assets Control; andCommentsClose CommentsPermalink





‘(C) any information required under this paragraph not later than 10 days after receiving any new or updated list from the Director.CommentsClose CommentsPermalink





‘(4) PROCEDURES- The procedures described in this paragraph are the following:CommentsClose CommentsPermalink





‘(A) INVESTIGATION- The Director shall investigate entities that appear to be unlawful Internet gambling enterprises. An initial investigation shall be completed before the end of the 60-day period beginning on the date of enactment of this section. After the initial investigation, the Director shall regularly investigate entities that appear to be unlawful Internet gambling enterprises. If the Director discovers evidence sufficient to prove a prima facie case that any person is an unlawful Internet gambling enterprise, the Director shall provide the notice required under subparagraph (C).CommentsClose CommentsPermalink





‘(B) REQUESTS- Any Federal, State, tribal, or local law enforcement official, any affected sports organization, any person directly harmed by unlawful Internet gambling, any financial transaction provider, and any interactive computer service (as such terms are defined in section 5362) shall have the right, but not the obligation, to make a written request to the Director for the addition of any person to the list of unlawful Internet gambling enterprises. If the Director determines that the evidence submitted is sufficient to prove a prima facie case that such person is an unlawful Internet gambling enterprise, the Director shall provide the notice required under subparagraph (C) to each person identified as an alleged unlawful Internet gambling enterprise. The Director also shall provide written notice of its decision under this subparagraph, including a decision not to add a person to the list required under paragraph (1), to the requesting party no later than 30 days after the request is received.CommentsClose CommentsPermalink





‘(C) NOTICE- Not fewer than 30 days before adding an unlawful Internet gambling enterprise, or an owner or operator thereof, to the list required under paragraph (1), the Director shall provide written notice to such enterprise, owner, or operator. Any enterprise, owner, or operator receiving such notice may contest the Director’s determination by written appeal to the Director not more than 30 days after receiving notice.CommentsClose CommentsPermalink





‘(D) OPPORTUNITY FOR HEARING- If a person properly submits a written appeal under subparagraph (C), the Director shall not include such person in the list required under paragraph (1) unless and until the Director provides such person with an opportunity for a hearing not more than 30 days after receiving written notice of appeal. Not more than 10 days after an opportunity for hearing is afforded, whether or not the person requesting the hearing appears at such hearing, the Director shall proceed to add such person to the list of unlawful Internet gambling enterprises unless the Director determines, based on a preponderance of the evidence, that such person is not an unlawful Internet gambling enterprise.CommentsClose CommentsPermalink





‘(E) INJUNCTIVE RELIEF- Any person that the Director determines shall be included in the list required under paragraph (1) after such person appears at a hearing described in subparagraph (D) and any person included in such list who did not receive the notice required under subparagraph (C), may petition for injunctive relief in the United States District Court for the District of Columbia, which shall have exclusive jurisdiction to hear challenges pursuant to this section. The petitioner shall have the burden of establishing by a preponderance of the evidence that such person is not an unlawful Internet gambling enterprise. Only persons designated by the Director for inclusion on the list of unlawful Internet gambling enterprises, and other owners or operators of an enterprise to be so listed, shall have standing to contest the Director’s determination. The court may enjoin the Director and the Secretary not to add or remove the petitioner from the list of unlawful Internet gambling enterprises, and no other judicial recourse shall be permitted.CommentsClose CommentsPermalink





‘(c) Effect of List- A financial transaction provider shall be deemed to have actual knowledge that a person is an unlawful Internet gambling enterprise to the extent that such person is identified on the list available to the public, or on a non-public list made available to such financial transaction provider, by the Secretary as described in subsection (b)(2), provided that the list shall not be deemed to be the sole source of actual knowledge.CommentsClose CommentsPermalink

‘Sec. 5387. Limitation of licenses in States and Indian lands

‘(a) State Opt-Out Exercise-CommentsClose CommentsPermalink





‘(1) LIMITATIONS IMPOSED BY STATES-CommentsClose CommentsPermalink





‘(A) IN GENERAL- No licensee may engage, under any license issued under this subchapter, in the operation of an Internet gambling facility that knowingly accepts bets or wagers initiated by persons who reside in any State which provides notice that it will limit such bets or wagers, if the Governor or other chief executive officer of such State informs the Director of such limitation, in a manner which clearly identifies the nature and extent of such limitation, before the end of the period beginning on the date of the enactment of the Internet Gambling Regulation, Consumer Protection, and Enforcement Act and ending on the date on which such State’s legislature has conducted one full general legislative session, where such session began after the date of the enactment of such Act, or in accordance with paragraph (2), until such time as any notice of any amendment or repeal of such specific limitation becomes effective under paragraph (2).CommentsClose CommentsPermalink





‘(B) COORDINATION BETWEEN STATE AND TRIBAL OPT-OUT EXERCISES- Any State limitation under subparagraph (A) shall not apply to the acceptance by a licensee of bets or wagers from persons located within the tribal lands of an Indian tribe that--CommentsClose CommentsPermalink





‘(i) has itself opted out pursuant to subsection (b) (in which case the tribal opt-out exercise under such subsection shall apply); orCommentsClose CommentsPermalink





‘(ii) would be entitled pursuant to other applicable law to permit such bets or wagers to be initiated and received within its territory without use of the Internet.CommentsClose CommentsPermalink





‘(C) COORDINATION WITH INDIAN GAMING REGULATORY ACT- No decision by a State under this subsection shall be considered in making any determination with regard to the ability of an Indian tribe to offer any class of gambling activity pursuant to section 11 of the Indian Gaming Regulatory Act.CommentsClose CommentsPermalink





‘(D) TRIBAL STATUS OR CATEGORY NOT IMPACTED- Tribal operations of Internet gambling facilities under this subchapter shall not impact an Indian tribe’s status or category or class under its land-based activities.CommentsClose CommentsPermalink





‘(E) NEW NEGOTIATIONS NOT REQUIRED- Operating under a license issued pursuant to this subchapter shall not require, or impose any requirement on, an Indian tribe to negotiate a new agreement, or renegotiate any existing agreement, limitation or other provision of a tribal-State compact, agreement, or other understanding with respect to gaming or revenue-sharing, with regard to any Internet bet or wager occurring pursuant to a license issued by the Secretary under this subchapter.CommentsClose CommentsPermalink





‘(2) CHANGES TO STATE LIMITATIONS- The establishment, repeal, or amendment by any State of any limitation referred to in paragraph (1) after the end of the period referred to in paragraph (1) shall apply, for purposes of this subchapter, beginning on the first January 1 that occurs after the end of the 60-day period beginning on the later of--CommentsClose CommentsPermalink





‘(A) the date a notice of such establishment, repeal, or amendment is provided by the Governor or other chief executive officer of such State in writing to the Secretary; orCommentsClose CommentsPermalink





‘(B) the effective date of such establishment, repeal, or amendment.CommentsClose CommentsPermalink





‘(b) Indian Tribe Opt-Out Exercise-CommentsClose CommentsPermalink





‘(1) LIMITATIONS IMPOSED BY INDIAN TRIBES- No Internet gambling licensee knowingly may accept a bet or wager from a person located in the tribal lands of any Indian tribe which limits such gambling activities or other contests if the principal chief or other chief executive officer of such Indian tribe informs the Secretary of such limitation, in a manner which clearly identifies the nature and extent of such limitation, before the end of the 90-day period beginning on the date of the enactment of the Internet Gambling Regulation, Consumer Protection, and Enforcement Act, or in accordance with paragraph (2), until such time as any notice of any amendment or repeal of such specific limitation becomes effective under paragraph (2).CommentsClose CommentsPermalink





‘(2) CHANGES TO INDIAN TRIBE LIMITATIONS- The establishment, repeal, or amendment by any Indian tribe of any limitation referred to in paragraph (1) after the end of the 90-day period beginning on the date of the enactment of this subchapter shall apply, for purposes of this subchapter, beginning on the first January 1 that occurs after the end of the 60-day period beginning on the later of--CommentsClose CommentsPermalink





‘(A) the date a notice of such establishment, repeal, or amendment is provided by the principal chief or other chief executive officer of such Indian tribe in writing to the Secretary; orCommentsClose CommentsPermalink





‘(B) the effective date of such establishment, repeal, or amendment.CommentsClose CommentsPermalink





‘(c) Notification and Enforcement of State and Indian Tribe Limitations-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The Secretary shall notify all licensees and applicants of all States and Indian tribes that have provided notice pursuant to paragraph (1) or (2) of subsection (a) or (b), as the case may be, promptly upon receipt of such notice and in no event fewer than 30 days before the effective date of such notice.CommentsClose CommentsPermalink





‘(2) COMPLIANCE- The Secretary shall take effective measures to ensure that any licensee under this subchapter, as a condition of the license, complies with any limitation or prohibition imposed by any State or Indian tribe to which the licensee is subject under subsection (a) or (b), as the case may be.CommentsClose CommentsPermalink





‘(3) VIOLATIONS- It shall be a violation of this subchapter for any licensee knowingly to accept bets or wagers initiated or otherwise made by persons located within any State or in the tribal lands of any Indian tribe for which a notice is in effect under subsection (a) or (b), as the case may be.CommentsClose CommentsPermalink





‘(4) STATE ATTORNEY GENERAL ENFORCEMENT- In any case in which the attorney general of a State, or any State or local law enforcement agency authorized by the State attorney general or by State statute to prosecute violations of consumer protection law, has reason to believe that an interest of the residents of that State has been or is threatened or adversely affected by a violation by a licensee pursuant to paragraph (2), the State, or the State or local law enforcement agency on behalf of the residents of the agency’s jurisdiction, may bring a civil action on behalf of the residents of that State or jurisdiction in a district court of the United States located therein, to--CommentsClose CommentsPermalink





‘(A) enjoin that practice; orCommentsClose CommentsPermalink





‘(B) enforce compliance with this subchapter.CommentsClose CommentsPermalink

‘Sec. 5388. Sports betting prohibited on Internet

‘No licensee under this subchapter shall accept Internet bets or wagers on sporting events, with the exception of pari-mutuel racing as permitted by law.CommentsClose CommentsPermalink

‘Sec. 5389. Prohibition on the use of credit cards for Internet gambling

‘(a) In General- No licensee, no person operating on behalf of a licensee, and no person accepting payment for or settlement of a bet or wager who intends to transmit such payment to a person licensee, may accept a bet or wager or payment for or settlement of a bet or wager that is transmitted or otherwise facilitated with a credit card (as defined in section 5362(11)).CommentsClose CommentsPermalink





‘(b) Exception-CommentsClose CommentsPermalink





‘(1) CLARIFICATION OF SCOPE- For any person licensed to take bets or wagers in accordance with the Interstate Horseracing Act of 1978, the prohibition in subsection (a) shall only apply to those activities conducted pursuant to a license under this subchapter.CommentsClose CommentsPermalink





‘(2) INTRASTATE ACTIVITIES- For any person involved in legal, land-based or State- or tribal-regulated intrastate gambling, the prohibition in subsection (a) shall only apply to those activities conducted pursuant to a license under this subchapter.CommentsClose CommentsPermalink

‘Sec. 5390. State and tribal lotteries

‘(a) In General- Notwithstanding any other provision of this subchapter, this subchapter shall not apply to Internet gambling conducted by any State or tribal lottery authority when conducted in accordance with subparagraph (B) or (C) of section 5362(10), as clarified by section 5362(10)(E).CommentsClose CommentsPermalink





‘(b) Rule of Construction- For purposes of the clarification made by subparagraph (E) of section 5362(10) to the meaning and intent of subparagraphs (B) and (C) of such section, Internet gambling described in subsection (a) is hereby expressly permitted, and operators of any State or tribal lottery authority conducting Internet gambling facilities operating in accordance with such subparagraph (B) or (C), as clarified by such subparagraph (E), and vendors, suppliers and service providers to such State or tribal lottery authority, shall not be required to be licensed under this subchapter.CommentsClose CommentsPermalink





‘(c) Applicability of Other Provisions to Lottery Activity- To clarify existing law, section 1084 of title 18 shall not apply to any of the following that occurs in connection with any Internet gambling conducted by any State or tribal lottery authority when conducted in accordance with subparagraph (B) or (C) of section 5362(10), as clarified by section 5362(10)(E):CommentsClose CommentsPermalink





‘(1) Any Internet bet or wager, including any transmission thereof.CommentsClose CommentsPermalink





‘(2) Any transmission of information assisting in the placing of bets or wagers.CommentsClose CommentsPermalink





‘(3) Any transmission entitling the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers.CommentsClose CommentsPermalink





‘(d) Authorization of Sponsor- No licensee may offer services relating to any lottery sponsored by a State, tribal, or other governmental body without the authorization of the official sponsor.CommentsClose CommentsPermalink

‘Sec. 5391. Safe harbors

‘It shall be a complete defense against any prosecution or enforcement action under any Federal or State law against any person possessing a valid license under this subchapter that the activity is authorized under and has been carried out lawfully under the terms of this subchapter.CommentsClose CommentsPermalink

‘Sec. 5392. Relation to section 1084 of title 18 and the Unlawful Internet Gambling Enforcement Act

‘Section 1084 of title 18 and subchapter IV of this chapter shall not apply to any Internet bet or wager occurring pursuant to a license issued in accordance with this subchapter.CommentsClose CommentsPermalink

‘Sec. 5393. Cheating and other fraud

‘(a) Electronic Cheating Devices Prohibited- No person initiating, receiving, or otherwise making a bet or wager with a licensee, or sending, receiving, or inviting information assisting with a bet or wager with a licensee, knowingly shall use, or assist another in the use of, an electronic, electrical, or mechanical device which is designed, constructed, or programmed specifically for use in obtaining an advantage in any game authorized under this subchapter, where such advantage is prohibited or otherwise violates the rules of play established by the licensee.CommentsClose CommentsPermalink





‘(b) Additional Offense- No person initiating, receiving, or otherwise making a bet or wager with a licensee, or sending, receiving, or inviting information assisting with a bet or wager with a licensee, knowingly shall use or possess any cheating device with intent to cheat or defraud any licensee or other persons placing bets or wagers with such licensee.CommentsClose CommentsPermalink





‘(c) Permanent Injunction- Upon conviction of a person for violation of this section, the court may enter a permanent injunction enjoining such person from initiating, receiving, or otherwise making bets or wagers or sending, receiving, or inviting information assisting in the placing of bets or wagers.CommentsClose CommentsPermalink





‘(d) Criminal Penalty- Whoever violates subsection (a) or (b) of this section shall be fined under title 18 or imprisoned for not more than 5 years, or both.’.CommentsClose CommentsPermalink





(b) Rules of Construction-CommentsClose CommentsPermalink





(1) TECHNICAL AND CONFORMING AMENDMENT- Section 310(b)(2) of title 31, United States Code is amended--CommentsClose CommentsPermalink





(A) by redesignating subparagraph (J) as subparagraph (K); andCommentsClose CommentsPermalink





(B) by inserting after subparagraph (I) the following new subparagraph:CommentsClose CommentsPermalink





‘(J) Administer the requirements of subchapter V of chapter 53.’.CommentsClose CommentsPermalink





(c) Clerical Amendment- The table of sections for chapter 53 of title 31, United States Code, is amended by adding at the end the following:CommentsClose CommentsPermalink

‘subchapter v--regulation of lawful internet gambling

‘5381. Congressional findings.CommentsClose CommentsPermalink





‘5382. Definitions.CommentsClose CommentsPermalink





‘5383. Establishment and administration of licensing program.CommentsClose CommentsPermalink





‘5384. Problem Gambling, Responsible Gambling, Consumer Safeguards, and Self-Exclusion Program.CommentsClose CommentsPermalink





‘5385. Financial transaction providers.CommentsClose CommentsPermalink





‘5386. List of unlawful Internet gambling enterprises.CommentsClose CommentsPermalink





‘5387. Limitation of licenses in States and Indian lands.CommentsClose CommentsPermalink





‘5388. Sports betting prohibited on Internet.CommentsClose CommentsPermalink





‘5389. Prohibition on the use of credit cards for Internet gambling.CommentsClose CommentsPermalink





‘5390. State and tribal lotteries.CommentsClose CommentsPermalink





‘5391. Safe harbors.CommentsClose CommentsPermalink





‘5392. Relation to section 1084 of title 18 and the Unlawful Internet Gambling Enforcement Act.CommentsClose CommentsPermalink





‘5393. Cheating and other fraud.’.CommentsClose CommentsPermalink

SEC. 3. REPORT REQUIRED.

(a) In General- Before the end of the 1-year period beginning on the effective date of the regulations prescribed under section 5(a), and annually thereafter, the Secretary shall submit a report to the Congress on the licensing and regulation of Internet gambling operators.CommentsClose CommentsPermalink





(b) Information Required- Each report submitted under subsection (a) shall include the following information:CommentsClose CommentsPermalink





(1) A comprehensive statement regarding the prohibitions notified by the States and Indian tribes pursuant to section 5387 of title 31, United States Code.CommentsClose CommentsPermalink





(2) Relevant statistical information on applicants and licenses.CommentsClose CommentsPermalink





(3) The amount of licensing and user fees collected during the period covered by the report.CommentsClose CommentsPermalink





(4) Information on regulatory or enforcement actions undertaken during the period.CommentsClose CommentsPermalink





(5) Any other information that may be useful to the Congress in evaluating the effectiveness of the Act in meeting its purpose, including the provision of protections against underage gambling, compulsive gambling, money laundering, and fraud, and in combating tax avoidance relating to Internet gambling.CommentsClose CommentsPermalink

SEC. 4. FEASIBILITY STUDY.

The Secretary of the Treasury, in consultation with appropriate State or tribal officers or agencies, shall conduct a feasibility study on safeguards to address gambling while impaired through programs such as periodic notices, periodic testing of individuals to establish cognitive competence, and any other similar option that the Secretary or appropriate State or tribal officers or agencies may determine to be appropriate.CommentsClose CommentsPermalink

SEC. 5. EFFECTIVE DATE.

(a) Regulations- The Secretary of the Treasury shall prescribe such regulations as the Secretary may determine to be appropriate to implement subchapter V of chapter 53 of title 31, United States Code (as added by section 2(a) of this Act) and shall publish such regulations in final form in the Federal Register before the end of the 180-day period beginning on the date of enactment of this Act.CommentsClose CommentsPermalink





(b) Scope of Application- The amendment made by section 2(a) shall apply after the end of the 90-day period beginning on the date of the publication of the regulations in final form in accordance with subsection (a).CommentsClose CommentsPermalink