IB 

Union Calendar No. 398 

111TH CONGRESS 

2D SESSION H. R. 2267 

[Report No. 111–656, Part I] 

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. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 6, 2009 

Mr. FRANK of Massachusetts (for himself, Mr. PAUL, Mr. GUTIERREZ, Mr. 

KING of New York, Mr. WATT, Mr. ACKERMAN, Mr. CAPUANO, Mr. CARSON of Indiana, Mr. MCDERMOTT, Mr. DELAHUNT, Mr. MCGOVERN, Mr. 

WEXLER, Ms. BERKLEY, Mr. COHEN, Mr. PERRIELLO, and Mr. SABLAN) 

introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committees on Energy and Commerce and the Judiciary, 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 concerned 

SEPTEMBER 29, 2010 

Reported from the Committee on Financial Services with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

SEPTEMBER 29, 2010 

Referral to the Committees on Energy and Commerce and the Judiciary 

extended for a period not to exceed November 19, 2010 

NOVEMBER 19, 2010 

Committee on the Judiciary discharged; referral to the Committee on Energy 

and Commerce extended for a period not to exceed November 30, 2010 


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NOVEMBER 30, 2010 

Additional sponsors: Mr. HASTINGS of Florida, Mr. GEORGE MILLER of California, Mr. BISHOP of New York, Mr. SCOTT of Virginia, Mr. CROWLEY, 

Mr. MCMAHON, Mr. ROTHMAN of New Jersey, Mr. FILNER, Mrs. 

MCCARTHY of New York, Mr. RANGEL, Mr. MORAN of Virginia, Mr. 

DRIEHAUS, Mr. POLIS of Colorado, Mr. GRIJALVA, Mr. ISRAEL, Mr. 

RODRIGUEZ, Mr. HONDA, Mr. ANDREWS, Mr. PERLMUTTER, Mr. YOUNG

of Alaska, Mr. FOSTER, Mr. BLUMENAUER, Mr. ABERCROMBIE, Mr. 

RYAN of Ohio, Mr. NADLER of New York, Mr. HODES, Mr. TOWNS, Mr. 

COURTNEY, Mr. TONKO, Mr. LOBIONDO, Mr. ADLER of New Jersey, Mr. 

MINNICK, Ms. LINDA T. SA ́NCHEZ of California, Mr. CONYERS, Mr. 

THOMPSON of California, Mr. MAFFEI, Ms. MARKEY of Colorado, Mr. 

CARNAHAN, Mr. PASCRELL, Ms. WOOLSEY, Mr. MURPHY of Connecticut, 

Mr. CLAY, Mr. SCHIFF, Mr. THOMPSON of Mississippi, Mr. SMITH of 

Washington, Mr. LARSON of Connecticut, Mr. WELCH, Mr. WEINER, Mr. 

MELANCON, Mr. ENGEL, Mr. WILSON of Ohio, Ms. TITUS, Mr. OWENS, 

Mr. MURPHY of New York, and Mr. CAMPBELL

NOVEMBER 30, 2010 

Committee on Energy and Commerce discharged; committed to the Committee 

of the Whole House on the State of the Union and ordered to be printed 

[For text of introduced bill, see copy of bill as introduced on May 6, 2009] 

A BILL 

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. 


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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Internet Gambling Reg5 ulation, Consumer Protection, and Enforcement Act’’. 

6 SEC. 2. FEDERAL LICENSING REQUIREMENT FOR INTERNET 

7 GAMBLING OPERATORS. 

8 (a) IN GENERAL.—Chapter 53 of title 31, United 

9 States Code, is amended by adding at the end the following 

10 new subchapter: 

11 ‘‘SUBCHAPTER V—REGULATION OF LAWFUL 

12 INTERNET GAMBLING 

13 ‘‘§ 5381. Congressional findings 

14 ‘‘The Congress finds the following: 

15 ‘‘(1) Since the development of the Internet, mil16 lions of people have chosen to gamble online, and 

17 today Internet gambling is offered by operators lo18 cated in many different countries under a variety of 

19 licensing and regulatory regimes. 

20 ‘‘(2) Despite the increasing use of the Internet 

21 for gambling by persons in the United States, there 

22 is no Federal or State regulatory regime in place to 

23 protect United States citizens who choose to engage in 

24 this interstate activity, or to oversee operators to esVerDate Mar 15 2010 23:25 Nov 30, 2010 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6203 E:\BILLS\H2267.RH H2267

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1 tablish and enforce standards of integrity and fair2 ness. 

3 ‘‘(3) In the United States, gambling activities, 

4 equipment, and operations have been subject to var5 ious forms of Federal and State control, regulation, 

6 and enforcement, with some form of gambling being 

7 permitted in nearly every State and by many Indian 

8 tribes. 

9 ‘‘(4) Internet gambling in the United States 

10 should be controlled by a strict Federal, State, and 

11 tribal licensing and regulatory framework to protect 

12 underage and otherwise vulnerable individuals, to en13 sure the games are fair, to address the concerns of law 

14 enforcement, and to enforce any limitations on the ac15 tivity established by the States and Indian tribes. 

16 ‘‘(5) An effective Federal, State, and tribal li17 censing system would ensure that licenses are issued 

18 only to Internet gambling operators which meet strict 

19 criteria to protect consumers, and which— 

20 ‘‘(A) are in good financial and legal stand21 ing, and of good character, honesty, and integ22 rity; 

23 ‘‘(B) utilize appropriate technology to deter24 mine the age and location of users; 


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1 ‘‘(C) adopt and implement systems to pro2 tect minors and problem gamblers; 

3 ‘‘(D) adopt and implement systems to en4 force any applicable Federal, State, and Indian 

5 tribe limitations on Internet gambling; and 

6 ‘‘(E) have in place risk-based methods to 

7 identify and combat money laundering and 

8 fraud relating to Internet gambling, and to pro9 tect the privacy and security of users. 

10 ‘‘(6) There is a need to extend the regulatory 

11 provisions of this Act to all persons, locations, equip12 ment, practices, and associations related to Internet 

13 gambling, with each State and Indian tribe having 

14 the ability to limit Internet gambling operators from 

15 offering Internet gambling to persons located within 

16 its territory by opting out of the provisions of this 

17 Act. 

18 ‘‘§ 5382. Definitions 

19 ‘‘For purposes of this subchapter, the following defini20 tions shall apply: 

21 ‘‘(1) APPLICANT.—The term ‘applicant’ means 

22 any person who has applied for a license pursuant to 

23 this subchapter. 

24 ‘‘(2) BET OR WAGER.—The term ‘bet or wager’ 

25 has the same meaning as in section 5362(1). 


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1 ‘‘(3) ENFORCEMENT AGENT.—The term ‘enforce2 ment agent’ means any individual authorized by the 

3 Secretary to enforce the provisions of this subchapter 

4 and regulations prescribed under this subchapter. 

5 ‘‘(4) INDIAN LANDS AND INDIAN TRIBE.—The 

6 terms ‘Indian lands’ and ‘Indian tribe’ have the same 

7 meanings as in section 4 of the Indian Gaming Regu8 latory Act. 

9 ‘‘(5) INTERNET.—The term ‘Internet’ has the 

10 same meaning as in section 5362(5). 

11 ‘‘(6) LICENSEE.—The term ‘licensee’ means an 

12 entity authorized to operate an Internet gambling fa13 cility in accordance with this subchapter. 

14 ‘‘(7) OPERATE AN INTERNET GAMBLING FACIL15 ITY.—The term ‘operate an Internet gambling facil16 ity’ or ‘operation of an Internet gambling facility’ 

17 means the direction, management, supervision, or 

18 control of an Internet site through which bets or wa19 gers are initiated, received, or otherwise made, wheth20 er by telephone, Internet, satellite, or other wire or 

21 wireless communication. 

22 ‘‘(8) SECRETARY.—The term ‘Secretary’ means 

23 the Secretary of the Treasury, or any person des24 ignated by the Secretary. 


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1 ‘‘(9) STATE.—The term ‘State’ means any State 

2 of the United States, the District of Columbia, or any 

3 commonwealth, territory, or other possession of the 

4 United States. 

5 ‘‘(10) SPORTING EVENT.—The term ‘sporting 

6 event’ means any athletic competition, whether profes7 sional, scholastic, or amateur. 

8 ‘‘§ 5383. Establishment and administration of licens9 ing program 

10 ‘‘(a) TREASURY RESPONSIBILITIES.—The Secretary 

11 shall have responsibility for the following activities: 

12 ‘‘(1) Exercising full regulatory jurisdiction 

13 over— 

14 ‘‘(A) the operation of Internet gambling fa15 cilities by licensees; and 

16 ‘‘(B) the licensure and regulation of all ap17 plicants, except to the extent that powers have 

18 been delegated to qualified State and tribal regu19 latory bodies pursuant to this subchapter. 

20 ‘‘(2) Prescribing such regulations as may be nec21 essary to administer and enforce the requirements of 

22 this subchapter. 

23 ‘‘(3) Employing enforcement agents with suffi24 cient training and experience to administer the reVerDate Mar 15 2010 23:25 Nov 30, 2010 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6203 E:\BILLS\H2267.RH H2267

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1 quirements of this subchapter and the regulations pre2 scribed under this subchapter. 

3 ‘‘(4) Enforcing the requirements of this sub4 chapter through all appropriate means provided 

5 under this subchapter and other provisions of law. 

6 ‘‘(b) INTERNET GAMBLING LICENSING PROGRAM.— 

7 ‘‘(1) LICENSING REQUIRED FOR CERTAIN INTER8 NET GAMBLING.—No person may operate an Internet 

9 gambling facility that knowingly accepts bets or wa10 gers from persons located in the United States with11 out a license issued by the Secretary in accordance 

12 with this subchapter. 

13 ‘‘(2) AUTHORITY UNDER VALID LICENSE.—A li14 censee may accept bets or wagers from persons located 

15 in the United States, subject to the limitations set 

16 forth in this subchapter, so long as its license remains 

17 in good standing. 

18 ‘‘(c) APPLICATION FOR LICENSE.— 

19 ‘‘(1) IN GENERAL.—Any person seeking author20 ity to operate an Internet gambling facility offering 

21 services to persons in the United States may apply 

22 for a license issued by the Secretary. 

23 ‘‘(2) INFORMATION REQUIRED.—Any application 

24 for a license under this subchapter shall contain such 


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1 information as may be required by the Secretary, in2 cluding the following: 

3 ‘‘(A) The criminal and credit history of the 

4 applicant, any senior executive and director of 

5 the applicant, and any person deemed to be in 

6 control of the applicant. 

7 ‘‘(B) The financial statements of the appli8 cant. 

9 ‘‘(C) Documentation showing the corporate 

10 structure of the applicant and all related busi11 nesses and affiliates. 

12 ‘‘(D) Documentation containing detailed 

13 evidence of the applicant’s plan for complying 

14 with all applicable regulations should a license 

15 be issued, with particular emphasis on the appli16 cant’s ability to— 

17 ‘‘(i) protect underage and problem 

18 gamblers; 

19 ‘‘(ii) ensure games are being operated 

20 fairly; and 

21 ‘‘(iii) comply with and address the 

22 concerns of law enforcement. 

23 ‘‘(E) Certification that the applicant agrees 

24 to submit to United States jurisdiction and all 

25 applicable United States laws relating to acceptVerDate Mar 15 2010 23:25 Nov 30, 2010 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6203 E:\BILLS\H2267.RH H2267

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1 ance by the applicant of bets or wagers over the 

2 Internet from persons located in the United 

3 States and all associated activities. 

4 ‘‘(F) Certification that the applicant has es5 tablished a corporate entity or other separate 

6 business entity in the United States, a majority 

7 of whose officers are United States persons and, 

8 if there is a board of directors, that the board is 

9 majority-controlled by directors who are United 

10 States persons. 

11 ‘‘(d) STANDARDS FOR LICENSE ISSUANCE; SUIT12 ABILITY QUALIFICATIONS AND DISQUALIFICATION STAND13 ARDS.— 

14 ‘‘(1) SUITABILITY FOR LICENSING STANDARDS.— 

15 ‘‘(A) IN GENERAL.—No person shall be eli16 gible to obtain a license unless the Secretary or 

17 an appropriate State officer or agency has deter18 mined, upon completion of a background check 

19 and investigation, that the applicant, and any 

20 person deemed to be in control of the applicant, 

21 is suitable for licensing. 

22 ‘‘(B) ASSOCIATES OF APPLICANTS.—If the 

23 applicant is a corporation, partnership, or other 

24 business entity, a background check and inves25 tigation shall occur with respect to the president 


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1 or other chief executive of the corporation, part2 nership, or other business entity and other part3 ners or senior executives and directors of the cor4 poration, partnership, or entity, as determined 

5 appropriate by the Secretary or any appropriate 

6 State or tribal officer or agency. 

7 ‘‘(C) BACKGROUND CHECK AND INVESTIGA8 TION.—The Secretary shall establish standards 

9 and procedures for conducting background checks 

10 and investigations for purposes of this sub11 section. 

12 ‘‘(2) SUITABILITY FOR LICENSING STANDARDS

13 DESCRIBED.—For purposes of this subchapter, an ap14 plicant and any other person associated with the ap15 plicant, as applicable, is suitable for licensing if the 

16 applicant demonstrates to the Secretary or appro17 priate State or tribal officer or agency by clear and 

18 convincing evidence that the applicant (or individual 

19 associated with the applicant, as applicable)— 

20 ‘‘(A) is a person of good character, honesty, 

21 and integrity; 

22 ‘‘(B) is a person whose prior activities, rep23 utation, habits, and associations do not— 


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1 ‘‘(i) pose a threat to the public interest 

2 or to the effective regulation and control of 

3 the licensed activities; or 

4 ‘‘(ii) create or enhance the dangers of 

5 unsuitable, unfair, or illegal practices, 

6 methods, and activities in the conduct of the 

7 licensed activities or the carrying on of the 

8 business and financial arrangements inci9 dental to such activities; 

10 ‘‘(C) is capable of and likely to conduct the 

11 activities for which the applicant is licensed in 

12 accordance with the provisions of this subchapter 

13 and any regulations prescribed under this sub14 chapter; 

15 ‘‘(D) has or guarantees acquisition of ade16 quate business competence and experience in the 

17 operation of Internet gambling facilities; and 

18 ‘‘(E) has or will obtain sufficient financing 

19 for the nature of the proposed operation and 

20 from a suitable source. 

21 ‘‘(3) UNSUITABLE FOR LICENSING.—An appli22 cant or any other person may not be determined to 

23 be suitable for licensing within the meaning of this 

24 subchapter if the applicant or such person— 


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1 ‘‘(A) has failed to provide information and 

2 documentation material to a determination of 

3 suitability for licensing under paragraph (1); 

4 ‘‘(B) has supplied information which is un5 true or misleading as to a material fact per6 taining to any such determination; 

7 ‘‘(C) has been convicted of an offense pun8 ishable by imprisonment of more than 1 year; 

9 ‘‘(D) is delinquent in filing any applicable 

10 Federal or State tax returns or in the payment 

11 of any taxes, penalties, additions to tax, or inter12 est owed to a State or the United States; 

13 ‘‘(E) has, on or after the date of the enact14 ment of the Unlawful Internet Gambling En15 forcement Act of 2006— 

16 ‘‘(i) knowingly participated in, or 

17 should have known they were participating 

18 in, any illegal Internet gambling activity, 

19 including the taking of an illegal Internet 

20 wager, the payment of winnings on an ille21 gal Internet wager, the promotion through 

22 advertising of any illegal Internet gambling 

23 website or service, or the collection of any 

24 payments to an entity operating an illegal 

25 Internet gambling website; or 


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1 ‘‘(ii) knowingly been owned, operated, 

2 managed, or employed by, or should have 

3 known they were owned, operated, managed, 

4 or employed by, any person who was know5 ingly participating in, or should have 

6 known they were participating in, any ille7 gal Internet gambling activity, including 

8 the taking of an illegal Internet wager, the 

9 payment of winnings on an illegal Internet 

10 wager, the promotion through advertising of 

11 any illegal Internet gambling website or 

12 service, or the collection of any payments to 

13 an entity operating an illegal Internet gam14 bling website; 

15 ‘‘(F) has— 

16 ‘‘(i) received any assistance, financial 

17 or otherwise, from any person who has, be18 fore the date of the enactment of the Inter19 net Gambling Regulation, Consumer Protec20 tion, and Enforcement Act, knowingly ac21 cepted bets or wagers from a person located 

22 in the United States in violation of Federal 

23 or State law; or 

24 ‘‘(ii) provided any assistance, financial 

25 or otherwise, to any person who has, before 


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1 the date of the enactment of the Internet 

2 Gambling Regulation, Consumer Protection, 

3 and Enforcement Act, knowingly accepted 

4 bets or wagers from a person located in the 

5 United States in violation of Federal or 

6 State law; 

7 ‘‘(G) with respect to another entity that has 

8 accepted a bet or wager from any individual in 

9 violation of United States law, has purchased or 

10 otherwise obtained— 

11 ‘‘(i) such entity; 

12 ‘‘(ii) a list of the customers of such en13 tity; or 

14 ‘‘(iii) any other part of the equipment 

15 or operations of such entity; 

16 ‘‘(H) is listed on a State gambling excluded 

17 persons list; or 

18 ‘‘(I) fails to certify in writing, under pen19 alty of perjury, that the applicant or other such 

20 person, and all affiliated business entities (in21 cluding all entities under common control), has 

22 through its entire history— 

23 ‘‘(i) not committed an intentional fel24 ony violation of Federal or State gambling 

25 laws; and 


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1 ‘‘(ii) used diligence to prevent any 

2 United States person from placing a bet on 

3 an Internet site in violation of Federal or 

4 State gambling laws. 

5 ‘‘(4) APPEAL OF DETERMINATION.—With respect 

6 to any applicant or other person that the Secretary 

7 determines is not suitable for licensing within the 

8 meaning of this subchapter by reason of subpara9 graph (E) or (F) of paragraph (3), and where the 

10 Secretary has not determined that such applicant or 

11 person was acting in their capacity as a managerial 

12 employee of an Internet gambling website, the Sec13 retary shall establish an appeals process by which 

14 such applicant or person may appeal the Secretary’s 

15 determination. 

16 ‘‘(5) ONGOING REQUIREMENT.—A licensee (and 

17 any other person who is required to be determined to 

18 be suitable for licensing in connection with such li19 censee) shall meet the standards necessary to be suit20 able for licensing throughout the term of the license. 

21 ‘‘(6) PROTECTION OF THE PUBLIC TRUST.—The 

22 Secretary may take such action as is necessary to 

23 protect the public trust, including the implementation 

24 of such safeguards as may be necessary to ensure the 

25 operation of an Internet gambling facility licensed 


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1 under this subchapter is controlled only by persons 

2 who are suitable for licensing. 

3 ‘‘(7) ENFORCEMENT ACTIONS.— 

4 ‘‘(A) DETERMINATION OF UNSUITABILITY

5 FOR CONTINUED LICENSURE.—If the Secretary 

6 finds that an individual owner or holder of a se7 curity of a licensee, or of a holding or inter8 mediary company of a licensee or any person 

9 with an economic interest in a licensee or a di10 rector, partner, or officer of a licensee is not suit11 able for licensing, the Secretary may determine 

12 that the licensee is not qualified to continue as 

13 a licensee. 

14 ‘‘(B) ACTION TO PROTECT THE PUBLIC IN15 TEREST, INCLUDING SUSPENSION.—If the Sec16 retary may determine that the licensee is not 

17 qualified to continue as a licensee, the Secretary 

18 shall propose action necessary to protect the pub19 lic interest, including, if deemed necessary, the 

20 suspension of the authority of the licensee to en21 gage in licensed activities. 

22 ‘‘(C) IMPOSITION OF CONDITIONS INCLUD23 ING REMOVAL OF PARTIES.—Notwithstanding a 

24 determination under subparagraph (A), the Sec25 retary may allow a licensee to continue engaging 


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1 in licensed activities by imposing conditions on 

2 the licensee under penalty of revocation or sus3 pension of the authority of the licensee to engage 

4 in licensed activities, including— 

5 ‘‘(i) the identification of any person 

6 determined to be unsuitable for licensing; 

7 and 

8 ‘‘(ii) the establishment of appropriate 

9 safeguards to ensure such person is excluded 

10 from any interest in the licensed activities. 

11 ‘‘(e) ASSESSMENTS FOR ADMINISTRATIVE EX12 PENSES.— 

13 ‘‘(1) USER FEES.— 

14 ‘‘(A) IN GENERAL.—The cost of admin15 istering this subchapter with respect to each li16 censee, including the cost of any review or exam17 ination of a licensee to ensure compliance with 

18 the terms of the license and this subchapter, shall 

19 be assessed by the Secretary against the licensee 

20 institution by written notice in an amount ap21 propriate to meet the Secretary’s expenses in car22 rying out such administration, review, or exam23 ination. 


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1 ‘‘(B) DISPOSITION.—Amounts assessed by 

2 the Secretary as user fees under subparagraph 

3 (A) shall— 

4 ‘‘(i) be maintained by the Secretary 

5 solely for use in accordance with clause (ii); 

6 ‘‘(ii) be available to the Secretary to 

7 cover all expenses incurred by the Secretary 

8 in carrying out this subchapter; and 

9 ‘‘(iii) not be construed to be Govern10 ment funds or appropriated monies, or sub11 ject to apportionment for the purposes of 

12 chapter 15 or any other authority. 

13 ‘‘(C) HEARING.—Any licensee against 

14 whom an assessment is assessed under this para15 graph shall be afforded an agency hearing if 

16 such person submits a request for such hearing 

17 within 20 days after the issuance of the notice of 

18 assessment. 

19 ‘‘(D) COLLECTION.— 

20 ‘‘(i) REFERRAL.—If any licensee fails 

21 to pay an assessment under this paragraph 

22 after the assessment has become final, the 

23 Secretary shall recover the amount assessed 

24 by action in the appropriate United States 

25 district court. 


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1 ‘‘(ii) APPROPRIATENESS OF ASSESS2 MENT NOT REVIEWABLE.—In any civil ac3 tion under clause (i), the validity and ap4 propriateness of the assessment shall not be 

5 subject to review. 

6 ‘‘(2) DIRECT AND EXCLUSIVE OBLIGATION OF LI7 CENSEE.—The user fee shall be the direct and exclu8 sive obligation of the licensee and may not be de9 ducted from amounts available as deposits to any per10 son placing a bet. 

11 ‘‘(f) APPROVAL OF LICENSE.—The Secretary shall 

12 grant licenses under this subchapter if the applicant meets 

13 the criteria set by the Secretary set forth in this subchapter 

14 and in any regulations promulgated thereunder. 

15 ‘‘(g) SAFEGUARDS REQUIRED OF LICENSEE.—No per16 son may operate an Internet gambling facility in accord17 ance with this subchapter unless the person maintains or 

18 requires mechanisms so that the following requirements, 

19 and the standards established under section 5384, are met 

20 with respect to any Internet bet or wager: 

21 ‘‘(1) LEGAL AGE.—Appropriate safeguards to en22 sure that the individual placing a bet or wager is of 

23 legal age as defined by the law of the State or tribal 

24 area in which the individual is located at the time 

25 the bet or wager is placed. 


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1 ‘‘(2) PERMISSIBLE LOCATION.—Appropriate 

2 safeguards to ensure that the individual placing a bet 

3 or wager is physically located in a jurisdiction that 

4 permits Internet gambling at the time the bet or 

5 wager is placed. 

6 ‘‘(3) COLLECTION OF CUSTOMER TAXES.—Appro7 priate mechanisms to ensure that all taxes relating to 

8 Internet gambling from persons engaged in Internet 

9 gambling are collected at the time of any payment of 

10 any proceeds of Internet gambling. 

11 ‘‘(4) COLLECTION OF TAXES OF LICENSEE.—Ap12 propriate mechanisms to ensure that all taxes relating 

13 to Internet gambling from any licensee are collected 

14 and disbursed as required by law, and that adequate 

15 records to enable later audit or verification are main16 tained. 

17 ‘‘(5) SAFEGUARDS AGAINST FINANCIAL CRIME.— 

18 Appropriate safeguards to combat fraud, money laun19 dering, and terrorist finance. 

20 ‘‘(6) SAFEGUARDS AGAINST COMPULSIVE GAM21 BLING.—Appropriate safeguards to combat compul22 sive Internet gambling. 

23 ‘‘(7) PRIVACY SAFEGUARDS.—Appropriate safe24 guards to protect the privacy and security of any per25 son engaged in Internet gambling. 


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1 ‘‘(8) PAYMENT OF ASSESSMENTS.—Appropriate 

2 mechanisms to ensure that any assessment under sub3 section (e) is paid to the Secretary. 

4 ‘‘(9) OTHER REQUIREMENTS.—Such other re5 quirements as the Secretary may establish by regula6 tion or order. 

7 ‘‘(h) TERM AND RENEWAL OF LICENSE.— 

8 ‘‘(1) TERM.—Any license issued under this sec9 tion shall be issued for a 5-year term beginning on 

10 the date of issuance. 

11 ‘‘(2) RENEWAL.—Licenses may be renewed in ac12 cordance with the requirements prescribed by the Sec13 retary pursuant to this subchapter. 

14 ‘‘(i) REVOCATION OF LICENSE.— 

15 ‘‘(1) IN GENERAL.—Any license granted under 

16 this subchapter may be revoked by the Secretary if— 

17 ‘‘(A) the licensee fails to comply with any 

18 provision of this subchapter; 

19 ‘‘(B) the licensee is determined to be unsuit20 able for licensing, within the meaning of this 

21 subchapter; or 

22 ‘‘(C) the licensee is determined to be tar23 geting marketing or advertising materials at in24 dividuals who are not of legal age to place a bet 


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1 or wager, as defined by the law of the State or 

2 tribal area in which the individuals are located. 

3 ‘‘(2) FINAL ACTION.—Any revocation of a license 

4 under paragraph (1) shall be treated as a final action 

5 by the Secretary. 

6 ‘‘(j) REGULATIONS.—The regulations prescribed by the 

7 Secretary under this subchapter shall include regulations 

8 to fully implement— 

9 ‘‘(1) safeguards required for licensees under sub10 section (g); and 

11 ‘‘(2) the requirements for programs relating to 

12 the Problem Gambling, Responsible Gambling, and 

13 Self-Exclusion Program under section 5384. 

14 ‘‘(k) ADMINISTRATIVE PROVISIONS.— 

15 ‘‘(1) GENERAL POWERS OF SECRETARY.— 

16 ‘‘(A) IN GENERAL.—The Secretary shall 

17 have the authority to engage in the following: 

18 ‘‘(i) Investigate the suitability of each 

19 licensee to ensure compliance with this sub20 chapter and regulations prescribed under 

21 this subchapter. 

22 ‘‘(ii) Require licensees to maintain ap23 propriate procedures to ensure compliance 

24 with this subchapter and regulations pre25 scribed under this subchapter. 


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1 ‘‘(iii) Require licensees to maintain 

2 substantial facilities involved with the proc3 essing of bets or wagers from the United 

4 States within the United States. 

5 ‘‘(iv) Require that a majority of all of 

6 the employees of the applicant or licensee, 

7 and of its affiliated business entities, be 

8 residents or citizens of the United States. 

9 All entities under common control shall be 

10 considered affiliated business entities for the 

11 purposes of this subparagraph. 

12 ‘‘(v) Require licensees to maintain in 

13 the United States all facilities that are es14 sential to the regulation of bets or wagers 

15 placed from the United States at a location 

16 that is accessible to the appropriate regu17 latory personnel at all times. 

18 ‘‘(vi) Examine any licensee and any 

19 books, papers, records, or other data of li20 censees relevant to any recordkeeping or re21 porting requirements imposed by the Sec22 retary under this subchapter. 

23 ‘‘(vii) Require licensees to maintain all 

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1 essing of bets or wagers made or placed 

2 from the United States. 

3 ‘‘(viii) When determined by the Sec4 retary to be necessary, summon a licensee or 

5 an applicant for a license, an officer or em6 ployee of a licensee or any such applicant 

7 (including a former officer or employee), or 

8 any person having possession, custody, or 

9 care of the reports and records required by 

10 the Secretary under this subchapter, to ap11 pear before the Secretary or a designee of 

12 the Secretary at a time and place named in 

13 the summons and to produce such books, pa14 pers, records, or other data, and to give tes15 timony, under oath, as may be relevant or 

16 material to any investigation in connection 

17 with the enforcement of this subchapter or 

18 any application for a license under this 

19 subchapter. 

20 ‘‘(ix) Investigate any violation of this 

21 subchapter and any regulation under this 

22 subchapter and any other violation of law 

23 relating to the operation of an Internet 

24 gambling facility. 


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1 ‘‘(x) Conduct continuing reviews of ap2 plicants and licensees and the operation of 

3 Internet gambling facilities by use of tech4 nological means, onsite observation of facili5 ties, including servers, or other reasonable 

6 means to assure compliance with this sub7 chapter and any regulations promulgated 

8 hereunder. 

9 ‘‘(xi) Prohibit inappropriate adver10 tising practices by licensees, including unso11 licited emails targeting members of vulner12 able populations, including problem gam13 blers and minors, or Internet advertising 

14 linked to search terms associated with chil15 dren, problem gamblers, or other topics 

16 deemed inappropriate. 

17 ‘‘(B) EFFECT OF WTO RULING.—Clauses 

18 (iii) and (iv) of subparagraph (A) shall cease to 

19 have effect if a tribunal of the World Trade Or20 ganization of final arbitration rules that the im21 plementation of such clauses would violate the 

22 trade commitments of the United States under 

23 the World Trade Organization. 

24 ‘‘(2) CONSULTATION WITH INDIAN TRIBES.—In 

25 implementing this subchapter, the Secretary shall 


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1 conduct meaningful consultation with Indian tribes 

2 regarding all aspects of this subchapter which affect 

3 Indian tribes, both as potential licensing entities or 

4 operating entities. 

5 ‘‘(3) ADMINISTRATIVE ASPECTS OF SUMMONS.— 

6 ‘‘(A) PRODUCTION AT DESIGNATED SITE.— 

7 A summons issued pursuant to this subsection 

8 may require that books, papers, records, or other 

9 data stored or maintained at any place be pro10 duced at any business location of a licensee or 

11 applicant for a license or any designated loca12 tion in any State or in any territory or other 

13 place subject to the jurisdiction of the United 

14 States not more than 500 miles distant from any 

15 place where the licensee or applicant for a license 

16 operates or conducts business in the United 

17 States. 

18 ‘‘(B) NO LIABILITY FOR EXPENSES.—The 

19 United States shall not be liable for any expense 

20 incurred in connection with the production of 

21 books, papers, records, or other data under this 

22 subsection. 

23 ‘‘(C) SERVICE OF SUMMONS.—Service of a 

24 summons issued under this subsection may be by 

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1 culated to give actual notice as the Secretary 

2 may prescribe by regulation. 

3 ‘‘(4) CONTUMACY OR REFUSAL.— 

4 ‘‘(A) REFERRAL TO ATTORNEY GENERAL.— 

5 In case of contumacy by a person issued a sum6 mons under this subsection or a refusal by such 

7 person to obey such summons or to allow the 

8 Secretary to conduct an examination, the Sec9 retary shall refer the matter to the Secretary of 

10 the Treasury for referral to the Attorney General. 

11 ‘‘(B) JURISDICTION OF COURT.—The Attor12 ney General may invoke the aid of any court of 

13 the United States to compel compliance with the 

14 summons within the jurisdiction of which— 

15 ‘‘(i) the investigation which gave rise 

16 to the summons or the examination is being 

17 or has been carried on; 

18 ‘‘(ii) the person summoned is an in19 habitant; or 

20 ‘‘(iii) the person summoned carries on 

21 business or may be found. 

22 ‘‘(C) COURT ORDER.—The court may issue 

23 an order requiring the person summoned to ap24 pear before the Secretary or a delegate of the Sec25 retary to produce books, papers, records, and 


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1 other data, to give testimony as may be nec2 essary to explain how such material was com3 piled and maintained, to allow the Secretary to 

4 examine the business of a licensee, and to pay 

5 the costs of the proceeding. 

6 ‘‘(D) FAILURE TO COMPLY WITH ORDER.— 

7 Any failure to obey the order of the court may 

8 be punished by the court as a contempt thereof. 

9 ‘‘(E) SERVICE OF PROCESS.—All process in 

10 any case under this subsection may be served in 

11 any judicial district in which such person may 

12 be found. 

13 ‘‘(5) COMPILATION OF DATASETS ON PLAYER BE14 HAVIOR.— 

15 ‘‘(A) IN GENERAL.—The Secretary shall 

16 compile and make available to the public, on the 

17 website of the Secretary, datasets on player be18 havior. 

19 ‘‘(B) REGULATIONS REQUIRING SUBMISSION

20 OF INFORMATION.—The Secretary shall prescribe 

21 regulations to require licensees under this sub22 chapter to provide information on player behav23 ior that the Secretary determines is appropriate 

24 for the datasets under subparagraph (A). 


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1 ‘‘(C) INFORMATION REQUIRED TO BE IN2 CLUDED.—Datasets prepared under this para3 graph shall include information on any indi4 vidual player, if requested by the Secretary, in5 cluding but not limited to information con6 cerning gambling frequency, gaming duration, 

7 the amount wagered, the number of bets placed, 

8 and net losses, provided that such request com9 plies with the provisions of subparagraph (D). 

10 ‘‘(D) PROTECTION OF PRIVACY.—All infor11 mation provided pursuant to this paragraph 

12 shall be aggregated and anonymized, and shall 

13 not contain information that either alone or in 

14 combination with other data elements would per15 mit identification of any individual player. 

16 ‘‘(l) CIVIL MONEY PENALTIES.— 

17 ‘‘(1) IN GENERAL.—The Secretary may assess 

18 upon any licensee or other person subject to the re19 quirements of this subchapter for any willful violation 

20 of this subchapter or any regulation prescribed or 

21 order issued under this subchapter, a civil penalty of 

22 not more than the greater of— 

23 ‘‘(A) the amount (not to exceed $100,000) 

24 involved in the violation, if any; or 

25 ‘‘(B) $25,000. 


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1 ‘‘(2) ASSESSMENT.— 

2 ‘‘(A) WRITTEN NOTICE.—Any penalty im3 posed under paragraph (1) may be assessed and 

4 collected by the Secretary by written notice. 

5 ‘‘(B) FINALITY OF ASSESSMENT.—If, with 

6 respect to any assessment under paragraph (1), 

7 a hearing is not requested pursuant to subpara8 graph (E) within the period of time allowed 

9 under such subparagraph, the assessment shall 

10 constitute a final and unappealable order. 

11 ‘‘(C) AUTHORITY TO MODIFY OR REMIT

12 PENALTY.—The Secretary may compromise, 

13 modify, or remit any penalty which the Sec14 retary may assess or has already assessed under 

15 paragraph (1). 

16 ‘‘(D) MITIGATING FACTORS.—In deter17 mining the amount of any penalty imposed 

18 under paragraph (1), the Secretary shall take 

19 into account the appropriateness of the penalty 

20 with respect to— 

21 ‘‘(i) the size of the financial resources 

22 and the good faith of the person against 

23 whom the penalty is assessed; 

24 ‘‘(ii) the gravity of the violation; 


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1 ‘‘(iii) the history of previous violations; 

2 and 

3 ‘‘(iv) such other matters as justice may 

4 require. 

5 ‘‘(E) HEARING.—The person against whom 

6 any penalty is assessed under paragraph (1) 

7 shall be afforded an agency hearing if such per8 son submits a request for such hearing within 20 

9 days after the issuance of the notice of assess10 ment. 

11 ‘‘(F) COLLECTION.— 

12 ‘‘(i) REFERRAL.—If any person fails 

13 to pay an assessment after any penalty as14 sessed under this paragraph has become 

15 final, the Secretary shall recover the amount 

16 assessed by action in the appropriate 

17 United States district court. 

18 ‘‘(ii) APPROPRIATENESS OF PENALTY

19 NOT REVIEWABLE.—In any civil action 

20 under clause (i), the validity and appro21 priateness of the penalty shall not be subject 

22 to review. 

23 ‘‘(G) DISBURSEMENT.—All penalties col24 lected under authority of this subsection shall be 

25 deposited into the Treasury. 


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1 ‘‘(3) CONDITION FOR LICENSURE.—Payment by 

2 a licensee of any civil penalty assessed under this sub3 section that has become final shall be a requirement 

4 for the retention of its license. 

5 ‘‘(m) TREATMENT OF RECORDS.—In light of business 

6 competition, confidentiality, and privacy concerns, the Sec7 retary shall protect from disclosure information submitted 

8 in support of a license application under this subchapter 

9 and information collected in the course of regulating licens10 ees to the full extent permitted by sections 552 and 552a 

11 of title 5. 

12 ‘‘(n) SUITABILITY FOR LICENSING REQUIREMENTS

13 FOR CERTAIN SERVICE PROVIDERS.— 

14 ‘‘(1) IN GENERAL.—Any person that know15 ingly— 

16 ‘‘(A) manages, administers, or controls bets 

17 or wagers that are initiated, received, or other18 wise made within the United States, 

19 ‘‘(B) otherwise manages or administers the 

20 games with which such bets or wagers are associ21 ated, or 

22 ‘‘(C) develops, maintains or operates, or 

23 distributes or makes available for downloading 

24 software, other system programs or hardware 


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1 that create, operate, or otherwise affect the out2 come of a game, 

3 shall meet all of the suitability for licensing criteria 

4 established under this section in the same manner 

5 and to the same extent as if that person were itself 

6 a licensee. 

7 ‘‘(2) SUITABILITY FOR LICENSING REQUIRE8 MENTS FOR CERTAIN SERVICE PROVIDERS.—Any fail9 ure on the part of person described in any subpara10 graph of paragraph (1) to remain suitable for licens11 ing shall be grounds for revocation of the authority of 

12 the licensee for whom such service is provided to oper13 ate an Internet gambling facility, in the same man14 ner and in accordance with subsection (i). 

15 ‘‘(o) RELIANCE ON STATE AND TRIBAL REGULATORY

16 BODY CERTIFICATIONS OF SUITABILITY FOR APPLI17 CANTS.— 

18 ‘‘(1) QUALIFICATION OF STATE AND TRIBAL REG19 ULATORY BODIES.— 

20 ‘‘(A) APPLICATION FOR DETERMINATION.— 

21 Any State or tribal regulatory body with exper22 tise in regulating gambling may— 

23 ‘‘(i) notify the Secretary of its willing24 ness to review prospective applicants to cer25 tify whether any such applicant meets the 


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1 qualifications established under this sub2 chapter; and 

3 ‘‘(ii) provide the Secretary with such 

4 documentation as the Secretary determines 

5 necessary for the Secretary to determine 

6 whether such State or tribal regulatory body 

7 is qualified to conduct such review and may 

8 be relied upon by the Secretary to make any 

9 such certification. 

10 ‘‘(B) DETERMINATION AND NOTICE.—With11 in 60 days after receiving any notice under sub12 paragraph(A)(i), the Secretary shall— 

13 ‘‘(i) make the determination as to 

14 whether a State or tribal regulatory body is 

15 qualified to conduct a review of prospective 

16 applicants and may be relied upon to cer17 tify whether any such applicant meets the 

18 qualifications established under this sub19 chapter; and 

20 ‘‘(ii) notify the State or tribal regu21 latory body of such determination. 

22 ‘‘(2) ACTIONS BY QUALIFIED AUTHORITIES.— 

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1 spect to any such State or tribal regulatory body, the 

2 State or tribal regulatory body— 

3 ‘‘(A) may undertake reviews of any appli4 cant to determine whether the applicant or any 

5 person associated with the applicant meets the 

6 criteria for suitability for licensing established 

7 under this subchapter; 

8 ‘‘(B) may impose on each such applicant 

9 an administrative fee or assessment for con10 ducting such review in an amount the regulatory 

11 body determines to be necessary to meet its ex12 penses in the conduct of such review; and 

13 ‘‘(C) shall process and assess each applicant 

14 fairly and equally based on objective criteria, re15 gardless of any prior licensing of an applicant 

16 by the State or tribal regulatory body. 

17 ‘‘(3) RELIANCE ON STATE OR TRIBAL CERTIFI18 CATION.—Any applicant may provide a certification 

19 of suitability for licensing made by any State or trib20 al regulatory body under paragraph (2), together with 

21 all documentation the applicant has submitted to any 

22 such State or tribal regulatory body, to the Secretary, 

23 and any such certification and documentation shall 

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1 plicant has met the suitability for licensing require2 ments under this section. 

3 ‘‘(4) AUTHORITY OF SECRETARY TO REVIEW.— 

4 Notwithstanding any certification of suitability for li5 censing made by any State or tribal regulatory body, 

6 the Secretary retains the authority to review, with7 hold, or revoke any license if the Secretary has reason 

8 to believe that any applicant or licensee does not meet 

9 the suitability requirements for licensing established 

10 under this section, or any other requirement of a li11 censee. 

12 ‘‘(5) RELIANCE ON QUALIFIED REGULATORY

13 BODY FOR OTHER PURPOSES, INCLUDING EXAMINA14 TION AND ENFORCEMENT.—The Secretary shall rely 

15 on any State and tribal regulatory body found quali16 fied under this subsection for such other regulatory 

17 and enforcement activities as the Secretary finds to be 

18 useful and appropriate to carry out the purposes of 

19 this subchapter, including authority under paragraph 

20 (6). 

21 ‘‘(6) ADDITIONAL AUTHORITY OF QUALIFIED

22 STATE OR TRIBAL AUTHORITIES.—The qualified state 

23 or tribal authorities may— 


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1 ‘‘(A) examine licensees who are licensed 

2 under a State or tribal program referred to in 

3 paragraph (1); 

4 ‘‘(B) employ enforcement agents with suffi5 cient training and experience to administer the 

6 requirements of this subchapter; and 

7 ‘‘(C) enforce any requirement of this sub8 chapter that is within the jurisdiction of the 

9 qualified state or tribal authority through all ap10 propriate means provided under this subchapter 

11 and other provisions of law. 

12 ‘‘(7) REVOCATION OF QUALIFICATION.—The Sec13 retary may revoke, at any time and for any reason, 

14 the qualification of any State or tribal regulatory 

15 body to certify or to conduct any other regulatory or 

16 enforcement activity to carry out the purposes of this 

17 subchapter. 

18 ‘‘(p) PREVENTION OF MINORS FROM PLACING BETS

19 OR WAGERS.—The Secretary shall— 

20 ‘‘(1) frequently monitor, evaluate, and measure 

21 compliance effectiveness of each licensee’s software, 

22 mechanisms, and other systems for preventing minors 

23 from placing bets or wagers through the Internet site 

24 of the licensee; and 


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1 ‘‘(2) impose a sanction of either a fine, a revoca2 tion of license, or both, on a licensee whose minor pro3 tection software, mechanisms, and other systems are 

4 found to be insufficiently effective. 

5 ‘‘(q) REQUIREMENTS WITH RESPECT TO CHILD SUP6 PORT DELINQUENTS.— 

7 ‘‘(1) IN GENERAL.—When it is made known to 

8 the Secretary by a Federal or State court or a com9 petent State agency involved with the administration 

10 or enforcement of a court-ordered child support pay11 ment that a particular individual is delinquent with 

12 respect to court-ordered child support payments, the 

13 Secretary shall include that individual on the list es14 tablished under section 5384(c)(1)(A). 

15 ‘‘(2) REMOVAL FROM LIST.—Individuals placed 

16 on the list pursuant to paragraph (1) shall be re17 moved from such list if the court or agency that made 

18 such individual’s delinquency known to the Secretary 

19 notifies the Secretary that such individual is no 

20 longer delinquent. 

21 ‘‘§ 5384. Problem Gambling, Responsible Gambling, 

22 Consumer Safeguards, and Self-Exclusion 

23 Program 

24 ‘‘(a) REGULATIONS REQUIRED.—The Secretary and 

25 any State or tribal regulatory body that has been qualified 


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1 under subsection 5383(o) shall prescribe regulations for the 

2 development of a Problem Gambling, Responsible Gam3 bling, Consumer Safeguards, and Self-Exclusion Program 

4 on the basis of standards that each licensee shall implement 

5 as a condition of licensure. 

6 ‘‘(b) MINIMUM REQUIREMENTS.— 

7 ‘‘(1) IN GENERAL.—Any application for a license 

8 shall include a submission to the Secretary or quali9 fied State or tribal regulatory body setting forth a 

10 comprehensive program that is intended— 

11 ‘‘(A) to verify the identity and age of each 

12 customer through the use of commercially avail13 able data sources or any approved government 

14 database that is available for access in real-time 

15 through an automated process; 

16 ‘‘(B) to ensure that no customers under the 

17 legal age 21 may initiate or otherwise make any 

18 bets or wagers for real money; 

19 ‘‘(C) to verify the State or tribal land in 

20 which the customer is located at the time the cus21 tomer attempts to initiate a bet or wager; 

22 ‘‘(D) to ensure that no customer who is lo23 cated in a State or tribal land that opts out pur24 suant to section 5387 can initiate or otherwise 

25 make a bet or wager prohibited by such opt-out; 


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1 ‘‘(E) to ensure that responsible gambling 

2 materials including materials on problem gam3 bling, services and resources to address problem 

4 gambling, descriptions of games offered by the li5 censee, and when appropriate, odds of winning 

6 or payout rates of games, and any other mate7 rials that the Secretary or qualified State or 

8 tribal regulatory body may deem appropriate 

9 are made available to customers; 

10 ‘‘(F) to make available player-selectable re11 sponsible gambling options that may include, as 

12 appropriate to specific gambling games, a stake 

13 limit, loss limit, time-based loss limits, deposit 

14 limit, session time limit, time-based exclusion 

15 from all gambling and other similar options that 

16 the Secretary or qualified State or tribal regu17 latory body may deem appropriate and require 

18 to be made available; 

19 ‘‘(G) to require each customer, before mak20 ing or placing any bet or wager, to establish per21 sonal limits as a condition of play that apply 

22 across all betting sites, which may be in hourly, 

23 daily, weekly or monthly increments, at the dis24 cretion of the customer; 


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1 ‘‘(H) to protect the privacy and security of 

2 any customer in connection with any lawful 

3 Internet gambling activity; 

4 ‘‘(I) to protect against fraud and to provide 

5 for dispute resolution relating to internet gam6 bling activity through programs to insure the in7 tegrity and fairness of the games; and 

8 ‘‘(J) to protect against money laundering 

9 relating to Internet gambling activities. 

10 ‘‘(2) REQUIREMENTS FOR PROGRAMS ENSURING

11 INTEGRITY AND FAIRNESS.—The programs referred to 

12 in paragraph (1)(I) to insure the integrity and fair13 ness of the games shall include requirements for— 

14 ‘‘(A) real-time, multiparty cryptographic 

15 protocols for random number generation where 1 

16 of the parties is the player; 

17 ‘‘(B) secure audit trails; 

18 ‘‘(C) detailed player betting logs that record 

19 and store each wager placed by the player; 

20 ‘‘(D) real time confirmation of high value 

21 bets or wagers, where appropriate; or 

22 ‘‘(E) equally effective options that the Sec23 retary or qualified State or tribal regulatory of24 ficer or agency may determine to be appropriate. 

25 ‘‘(c) PERIODIC REVIEW.— 


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1 ‘‘(1) IN GENERAL.—The Secretary shall, on a 

2 regular basis, review the minimum requirements 

3 under this section and may, based on the best avail4 able technology, update the standards that each li5 censee shall implement as a condition of licensure. 

6 ‘‘(2) CONSULTATION.—In conducting the review 

7 required under paragraph (1), the Secretary shall 

8 consult with— 

9 ‘‘(A) State and tribal gaming regulatory of10 ficials; 

11 ‘‘(B) law enforcement officials; 

12 ‘‘(C) experts in underage and problem gam13 ing; 

14 ‘‘(D) experts on individual privacy; 

15 ‘‘(E) consumers; 

16 ‘‘(F) on-line retailers of other age restricted 

17 materials such as tobacco and alcohol products; 

18 ‘‘(G) licensees and other representatives of 

19 the gaming industry; 

20 ‘‘(H) software developers with expertise in 

21 gaming, privacy, the payments systems avail22 able, and other relevant areas; and 

23 ‘‘(I) such other relevant individuals as the 

24 Secretary may determine to be appropriate. 


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1 ‘‘(d) LIST OF PERSONS SELF-EXCLUDED FROM GAM2 BLING ACTIVITIES.— 

3 ‘‘(1) ESTABLISHMENT.— 

4 ‘‘(A) IN GENERAL.—The Secretary shall 

5 provide by regulation for the establishment of a 

6 list of persons self-excluded from gambling ac7 tivities at all licensee sites. 

8 ‘‘(B) PLACEMENT REQUEST.—Any person 

9 may request placement on the list of self-excluded 

10 persons by— 

11 ‘‘(i) acknowledging in a manner to be 

12 established by the Secretary that the person 

13 wishes to be denied gambling privileges; and 

14 ‘‘(ii) agreeing that, during any period 

15 of voluntary exclusion, the person may not 

16 collect any winnings or recover any losses 

17 resulting from any gambling activity at 

18 any licensee sites. 

19 ‘‘(2) PLACEMENT AND REMOVAL PROCEDURES.— 

20 The regulations prescribed by the Secretary under 

21 paragraph (1)(A) shall establish procedures for place22 ments on, and removals from, the list of self-excluded 

23 persons. 

24 ‘‘(3) LIMITATION ON LIABILITY.— 


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1 ‘‘(A) IN GENERAL.—The United States, the 

2 Secretary, an enforcement agent, or a licensee, or 

3 any employee or agent of the United States, the 

4 Secretary, an enforcement agent, or a licensee, 

5 shall not be liable to any self-excluded person or 

6 to any other party in any judicial or adminis7 trative proceeding for any harm, monetary or 

8 otherwise, which may arise as a result of— 

9 ‘‘(i) any failure to withhold gambling 

10 privileges from, or to restore gambling 

11 privileges to, a self-excluded person; or 

12 ‘‘(ii) otherwise permitting a self-ex13 cluded person to engage in gambling activ14 ity while on the list of self-excluded persons. 

15 ‘‘(B) RULE OF CONSTRUCTION.—No provi16 sion of subparagraph (A) shall be construed as 

17 preventing the Director from assessing any regu18 latory sanction against a licensee for failing to 

19 comply with the minimum standards prescribed 

20 pursuant to this subsection. 

21 ‘‘(4) DISCLOSURE PROVISIONS.— 

22 ‘‘(A) IN GENERAL.—Notwithstanding any 

23 other provision of Federal or State law, the list 

24 of self-excluded persons shall not be open to pub25 lic inspection. 


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1 ‘‘(B) AFFILIATE DISCLOSURE.—Any licens2 ees may disclose the identities of persons on the 

3 self-excluded list to any affiliated company or, 

4 where required to comply with this subsection, 

5 any service provider, to the extent that the li6 censee ensures that any affiliated company or 

7 service provider maintains such information 

8 under confidentiality provisions comparable to 

9 those in this subsection. 

10 ‘‘(5) LIMITATION ON LIABILITY FOR DISCLO11 SURE.—A licensee or an employee, agent, or affiliate 

12 of a licensee shall not be liable to any self-excluded 

13 person or to any other party in any judicial pro14 ceeding for any harm, monetary or otherwise, which 

15 may arise as a result of disclosure or publication in 

16 any manner. 

17 ‘‘(e) GAMBLING BY PROHIBITED PERSONS.— 

18 ‘‘(1) PROHIBITION BENEFITTING FROM PROHIB19 ITED GAMBLING ACTIVITY.—A person who is prohib20 ited from gambling with a licensee by law, or by 

21 order of the Secretary or any court of competent ju22 risdiction, including any person on the self-exclusion 

23 list as established in accordance with subsection (d), 

24 shall not collect, in any manner or proceeding, any 


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1 winnings or recover any losses arising as a result of 

2 any prohibited gambling activity. 

3 ‘‘(2) FORFEITURE.—In addition to any other 

4 penalty provided by law, any money or thing of value 

5 that has been obtained by, or is owed to, any prohib6 ited person by a licensee as a result of bets or wagers 

7 made by a prohibited person shall be subject to for8 feiture by order of the Secretary, following notice to 

9 the prohibited person and opportunity to be heard. 

10 ‘‘(3) DEPOSIT OF FORFEITED FUNDS.—Any 

11 funds forfeited pursuant to this subsection shall be de12 posited into the general fund of the Treasury. 

13 ‘‘(4) PERSONS SELF-EXCLUDED.—Licensees may 

14 not accept bets or wagers from persons on the list es15 tablished pursuant to subsection (d)(1)(A). 

16 ‘‘(f) PROBLEM OR COMPULSIVE GAMBLERS NOT ON

17 THE LIST OF SELF-EXCLUDED PERSONS.— 

18 ‘‘(1) PUBLIC AWARENESS PROGRAM.— 

19 ‘‘(A) IN GENERAL.—The Secretary and any 

20 State or tribal regulatory body that has been 

21 qualified under subsection 5383(o) shall provide 

22 by regulation for the establishment of a program 

23 to alert the public to the existence, consequences, 

24 and availability of the self-exclusion list, and 


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1 shall prepare and promulgate written materials 

2 to be used in such a program. 

3 ‘‘(B) LICENSEE-PROVIDED PUBLICITY.— 

4 Regulations prescribed under subparagraph (A) 

5 may require a licensee to make available lit6 erature or screen displays relating to the exist7 ence of the program. 

8 ‘‘(2) RULE OF CONSTRUCTION.—No provision of 

9 this subsection shall be construed as creating a legal 

10 duty in the Secretary, a qualified State or tribal reg11 ulatory body, a licensee, or any representative of a li12 censee to identify or to exclude problem or compulsive 

13 gamblers not on the list of self-excluded persons. 

14 ‘‘(3) IMMUNITY.—The United States, the Sec15 retary, a qualified State or tribal regulatory body, a 

16 licensee, and any employee or agent of a licensee, 

17 shall not be liable to any person in any proceeding 

18 for losses or other damages of any kind arising out 

19 of that person’s gambling activities based on a claim 

20 that the person was a compulsive, problem, or patho21 logical gambler. 

22 ‘‘§ 5385. Financial transaction providers 

23 ‘‘(a) IN GENERAL.—No financial transaction provider 

24 shall be held liable for engaging in financial activities and 

25 transactions for or on behalf of a licensee or involving a 


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1 licensee, including payments processing activities, unless 

2 such provider has knowledge that the specific financial ac3 tivities or transactions are conducted in violation of this 

4 subchapter and with applicable Federal and State laws. 

5 ‘‘(b) DEFINITIONS.—For purposes of this section, the 

6 following definitions shall apply: 

7 ‘‘(1) FINANCIAL TRANSACTION PROVIDER.—The 

8 term ‘financial transaction provider’ means a cred9 itor, credit card issuer, financial institution, operator 

10 of a terminal at which an electronic fund transfer 

11 may be initiated, money transmitting business, or 

12 international, national, regional, or local payment 

13 network utilized to effect a credit transaction, elec14 tronic fund transfer, stored value product transaction, 

15 or money transmitting service, or a participant in 

16 such network, or other participant in a payment sys17 tem. 

18 ‘‘(2) OTHER TERMS.— 

19 ‘‘(A) CREDIT, CREDITOR, CREDIT CARD, AND

20 CARD ISSUER.—The terms ‘credit’, ‘creditor’, 

21 ‘credit card’, and ‘card issuer’ have the meanings 

22 given the terms in section 103 of the Truth in 

23 Lending Act. 

24 ‘‘(B) ELECTRONIC FUND TRANSFER.—The 

25 term ‘electronic fund transfer’— 


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1 ‘‘(i) has the meaning given the term in 

2 section 903 of the Electronic Fund Transfer 

3 Act, except that the term includes transfers 

4 that would otherwise be excluded under sec5 tion 903(6)(E) of such Act; and 

6 ‘‘(ii) includes any fund transfer cov7 ered by Article 4A of the Uniform Commer8 cial Code, as in effect in any State. 

9 ‘‘(C) FINANCIAL INSTITUTION.—The term 

10 ‘financial institution’ has the meaning given the 

11 term in section 903 of the Electronic Fund 

12 Transfer Act, except that such term does not in13 clude a casino, sports book, or other business at 

14 or through which bets or wagers may be placed 

15 or received. 

16 ‘‘(D) INSURED DEPOSITORY INSTITUTION.— 

17 The term ‘insured depository institution’— 

18 ‘‘(i) has the meaning given the term in 

19 section 3(c) of the Federal Deposit Insur20 ance Act; and 

21 ‘‘(ii) includes an insured credit union 

22 (as defined in section 101 of the Federal 

23 Credit Union Act). 

24 ‘‘(E) MONEY TRANSMITTING BUSINESS AND

25 MONEY TRANSMITTING SERVICE.—The terms 


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1 ‘money transmitting business’ and ‘money trans2 mitting service’ have the meanings given the 

3 terms in section 5330(d) (determined without re4 gard to any regulations prescribed by the Sec5 retary under such section). 

6 ‘‘§ 5386. List of unlawful Internet gambling enter7 prises 

8 ‘‘(a) DEFINITIONS.—For purposes of this section, the 

9 following definitions shall apply: 

10 ‘‘(1) UNLAWFUL INTERNET GAMBLING ENTER11 PRISE.—The term ‘unlawful Internet gambling enter12 prise’ means any person who, more than 10 days 

13 after the date of the enactment of this section— 

14 ‘‘(A) violates a provision of section 5363; 

15 ‘‘(B) knowingly receives or transmits funds 

16 intended primarily for a person described in 

17 subparagraph (A); or 

18 ‘‘(C) knowingly assists in the conduct of a 

19 person described in subparagraph (A) or (B). 

20 ‘‘(2) DIRECTOR.—The term ‘Director’ means the 

21 Director of the Financial Crimes Enforcement Net22 work. 

23 ‘‘(b) LIST OF UNLAWFUL INTERNET GAMBLING EN24 TERPRISES.— 


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1 ‘‘(1) IN GENERAL.—Not later than 120 days 

2 after the date of the enactment of this section, the Di3 rector shall submit to the Secretary a list of unlawful 

4 Internet gambling enterprises and shall regularly up5 date such list in accordance with the procedures de6 scribed in paragraph (3). 

7 ‘‘(2) CONTENTS OF LIST.—The list prepared 

8 under paragraph (1) shall include the following infor9 mation for each such unlawful Internet gambling en10 terprise: 

11 ‘‘(A) All known Internet website addresses 

12 of the enterprise. 

13 ‘‘(B) The names of all known owners and 

14 operators of the enterprise. 

15 ‘‘(C) To the extent known, information 

16 identifying the financial agents and account 

17 numbers of the enterprise and the persons listed 

18 under subparagraph (B). 

19 ‘‘(3) DISTRIBUTION OF LIST BY SECRETARY.— 

20 The Secretary shall make available— 

21 ‘‘(A) a copy of the information provided 

22 under subparagraphs (A) and (B) of paragraph 

23 (2) on the Internet website of the Secretary of the 

24 Treasury; 


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1 ‘‘(B) to all persons who are required to com2 ply with the regulations prescribed under the au3 thority provided in section 5364 a copy of all the 

4 information provided under paragraph (1) in an 

5 electronic format compatible with the Specially 

6 Designated Nationals list maintained by the Of7 fice of Foreign Assets Control; and 

8 ‘‘(C) any information required under this 

9 paragraph not later than 10 days after receiving 

10 any new or updated list from the Director. 

11 ‘‘(4) PROCEDURES.—The procedures described in 

12 this paragraph are the following: 

13 ‘‘(A) INVESTIGATION.—The Director shall 

14 investigate entities that appear to be unlawful 

15 Internet gambling enterprises. An initial inves16 tigation shall be completed before the end of the 

17 60-day period beginning on the date of enact18 ment of this section. After the initial investiga19 tion, the Director shall regularly investigate enti20 ties that appear to be unlawful Internet gam21 bling enterprises. If the Director discovers evi22 dence sufficient to prove a prima facie case that 

23 any person is an unlawful Internet gambling en24 terprise, the Director shall provide the notice re25 quired under subparagraph (C). 


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1 ‘‘(B) REQUESTS.—Any Federal, State, trib2 al, or local law enforcement official, any affected 

3 sports organization, any person directly harmed 

4 by unlawful Internet gambling, any financial 

5 transaction provider, and any interactive com6 puter service (as such terms are defined in sec7 tion 5362) shall have the right, but not the obli8 gation, to make a written request to the Director 

9 for the addition of any person to the list of un10 lawful Internet gambling enterprises. If the Di11 rector determines that the evidence submitted is 

12 sufficient to prove a prima facie case that such 

13 person is an unlawful Internet gambling enter14 prise, the Director shall provide the notice re15 quired under subparagraph (C) to each person 

16 identified as an alleged unlawful Internet gam17 bling enterprise. The Director also shall provide 

18 written notice of its decision under this subpara19 graph, including a decision not to add a person 

20 to the list required under paragraph (1), to the 

21 requesting party no later than 30 days after the 

22 request is received. 

23 ‘‘(C) NOTICE.—Not fewer than 30 days be24 fore adding an unlawful Internet gambling en25 terprise, or an owner or operator thereof, to the 


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1 list required under paragraph (1), the Director 

2 shall provide written notice to such enterprise, 

3 owner, or operator. Any enterprise, owner, or op4 erator receiving such notice may contest the Di5 rector’s determination by written appeal to the 

6 Director not more than 30 days after receiving 

7 notice. 

8 ‘‘(D) OPPORTUNITY FOR HEARING.—If a 

9 person properly submits a written appeal under 

10 subparagraph (C), the Director shall not include 

11 such person in the list required under paragraph 

12 (1) unless and until the Director provides such 

13 person with an opportunity for a hearing not 

14 more than 30 days after receiving written notice 

15 of appeal. Not more than 10 days after an op16 portunity for hearing is afforded, whether or not 

17 the person requesting the hearing appears at 

18 such hearing, the Director shall proceed to add 

19 such person to the list of unlawful Internet gam20 bling enterprises unless the Director determines, 

21 based on a preponderance of the evidence, that 

22 such person is not an unlawful Internet gam23 bling enterprise. 

24 ‘‘(E) INJUNCTIVE RELIEF.—Any person 

25 that the Director determines shall be included in 


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1 the list required under paragraph (1) after such 

2 person appears at a hearing described in sub3 paragraph (D) and any person included in such 

4 list who did not receive the notice required under 

5 subparagraph (C), may petition for injunctive 

6 relief in the United States District Court for the 

7 District of Columbia, which shall have exclusive 

8 jurisdiction to hear challenges pursuant to this 

9 section. The petitioner shall have the burden of 

10 establishing by a preponderance of the evidence 

11 that such person is not an unlawful Internet 

12 gambling enterprise. Only persons designated by 

13 the Director for inclusion on the list of unlawful 

14 Internet gambling enterprises, and other owners 

15 or operators of an enterprise to be so listed, shall 

16 have standing to contest the Director’s deter17 mination. The court may enjoin the Director 

18 and the Secretary not to add or remove the peti19 tioner from the list of unlawful Internet gam20 bling enterprises, and no other judicial recourse 

21 shall be permitted. 

22 ‘‘(c) EFFECT OF LIST.—A financial transaction pro23 vider shall be deemed to have actual knowledge that a per24 son is an unlawful Internet gambling enterprise to the ex25 tent that such person is identified on the list available to 


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1 the public, or on a non-public list made available to such 

2 financial transaction provider, by the Secretary as de3 scribed in subsection (b)(2), provided that the list shall not 

4 be deemed to be the sole source of actual knowledge. 

5 ‘‘§ 5387. Limitation of licenses in States and Indian 

6 lands 

7 ‘‘(a) STATE OPT-OUT EXERCISE.— 

8 ‘‘(1) LIMITATIONS IMPOSED BY STATES.— 

9 ‘‘(A) IN GENERAL.—No licensee may en10 gage, under any license issued under this sub11 chapter, in the operation of an Internet gam12 bling facility that knowingly accepts bets or wa13 gers initiated by persons who reside in any State 

14 which provides notice that it will limit such bets 

15 or wagers, if the Governor or other chief execu16 tive officer of such State informs the Director of 

17 such limitation, in a manner which clearly iden18 tifies the nature and extent of such limitation, 

19 before the end of the period beginning on the date 

20 of the enactment of the Internet Gambling Regu21 lation, Consumer Protection, and Enforcement 

22 Act and ending on the date on which such 

23 State’s legislature has conducted one full general 

24 legislative session, where such session began after 

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1 cordance with paragraph (2), until such time as 

2 any notice of any amendment or repeal of such 

3 specific limitation becomes effective under para4 graph (2). 

5 ‘‘(B) COORDINATION BETWEEN STATE AND

6 TRIBAL OPT-OUT EXERCISES.—Any State limita7 tion under subparagraph (A) shall not apply to 

8 the acceptance by a licensee of bets or wagers 

9 from persons located within the tribal lands of 

10 an Indian tribe that— 

11 ‘‘(i) has itself opted out pursuant to 

12 subsection (b) (in which case the tribal opt13 out exercise under such subsection shall 

14 apply); or 

15 ‘‘(ii) would be entitled pursuant to 

16 other applicable law to permit such bets or 

17 wagers to be initiated and received within 

18 its territory without use of the Internet. 

19 ‘‘(C) COORDINATION WITH INDIAN GAMING

20 REGULATORY ACT.—No decision by a State 

21 under this subsection shall be considered in mak22 ing any determination with regard to the ability 

23 of an Indian tribe to offer any class of gambling 

24 activity pursuant to section 11 of the Indian 

25 Gaming Regulatory Act. 


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1 ‘‘(D) TRIBAL STATUS OR CATEGORY NOT IM2 PACTED.—Tribal operations of Internet gam3 bling facilities under this subchapter shall not 

4 impact an Indian tribe’s status or category or 

5 class under its land-based activities. 

6 ‘‘(E) NEW NEGOTIATIONS NOT REQUIRED.— 

7 Operating under a license issued pursuant to 

8 this subchapter shall not require, or impose any 

9 requirement on, an Indian tribe to negotiate a 

10 new agreement, or renegotiate any existing 

11 agreement, limitation or other provision of a 

12 tribal-State compact, agreement, or other under13 standing with respect to gaming or revenue-shar14 ing, with regard to any Internet bet or wager oc15 curring pursuant to a license issued by the Sec16 retary under this subchapter. 

17 ‘‘(2) CHANGES TO STATE LIMITATIONS.—The es18 tablishment, repeal, or amendment by any State of 

19 any limitation referred to in paragraph (1) after the 

20 end of the period referred to in paragraph (1) shall 

21 apply, for purposes of this subchapter, beginning on 

22 the first January 1 that occurs after the end of the 

23 60-day period beginning on the later of— 

24 ‘‘(A) the date a notice of such establishment, 

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1 ernor or other chief executive officer of such State 

2 in writing to the Secretary; or 

3 ‘‘(B) the effective date of such establishment, 

4 repeal, or amendment. 

5 ‘‘(b) INDIAN TRIBE OPT-OUT EXERCISE.— 

6 ‘‘(1) LIMITATIONS IMPOSED BY INDIAN

7 TRIBES.—No Internet gambling licensee knowingly 

8 may accept a bet or wager from a person located in 

9 the tribal lands of any Indian tribe which limits such 

10 gambling activities or other contests if the principal 

11 chief or other chief executive officer of such Indian 

12 tribe informs the Secretary of such limitation, in a 

13 manner which clearly identifies the nature and extent 

14 of such limitation, before the end of the 90-day period 

15 beginning on the date of the enactment of the Internet 

16 Gambling Regulation, Consumer Protection, and En17 forcement Act, or in accordance with paragraph (2), 

18 until such time as any notice of any amendment or 

19 repeal of such specific limitation becomes effective 

20 under paragraph (2). 

21 ‘‘(2) CHANGES TO INDIAN TRIBE LIMITATIONS.— 

22 The establishment, repeal, or amendment by any In23 dian tribe of any limitation referred to in paragraph 

24 (1) after the end of the 90-day period beginning on 

25 the date of the enactment of this subchapter shall 


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1 apply, for purposes of this subchapter, beginning on 

2 the first January 1 that occurs after the end of the 

3 60-day period beginning on the later of— 

4 ‘‘(A) the date a notice of such establishment, 

5 repeal, or amendment is provided by the prin6 cipal chief or other chief executive officer of such 

7 Indian tribe in writing to the Secretary; or 

8 ‘‘(B) the effective date of such establishment, 

9 repeal, or amendment. 

10 ‘‘(c) NOTIFICATION AND ENFORCEMENT OF STATE AND

11 INDIAN TRIBE LIMITATIONS.— 

12 ‘‘(1) IN GENERAL.—The Secretary shall notify 

13 all licensees and applicants of all States and Indian 

14 tribes that have provided notice pursuant to para15 graph (1) or (2) of subsection (a) or (b), as the case 

16 may be, promptly upon receipt of such notice and in 

17 no event fewer than 30 days before the effective date 

18 of such notice. 

19 ‘‘(2) COMPLIANCE.—The Secretary shall take ef20 fective measures to ensure that any licensee under this 

21 subchapter, as a condition of the license, complies 

22 with any limitation or prohibition imposed by any 

23 State or Indian tribe to which the licensee is subject 

24 under subsection (a) or (b), as the case may be. 


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1 ‘‘(3) VIOLATIONS.—It shall be a violation of this 

2 subchapter for any licensee knowingly to accept bets 

3 or wagers initiated or otherwise made by persons lo4 cated within any State or in the tribal lands of any 

5 Indian tribe for which a notice is in effect under sub6 section (a) or (b), as the case may be. 

7 ‘‘(4) STATE ATTORNEY GENERAL ENFORCE8 MENT.—In any case in which the attorney general of 

9 a State, or any State or local law enforcement agency 

10 authorized by the State attorney general or by State 

11 statute to prosecute violations of consumer protection 

12 law, has reason to believe that an interest of the resi13 dents of that State has been or is threatened or ad14 versely affected by a violation by a licensee pursuant 

15 to paragraph (2), the State, or the State or local law 

16 enforcement agency on behalf of the residents of the 

17 agency’s jurisdiction, may bring a civil action on be18 half of the residents of that State or jurisdiction in 

19 a district court of the United States located therein, 

20 to— 

21 ‘‘(A) enjoin that practice; or 

22 ‘‘(B) enforce compliance with this sub23 chapter. 


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1 ‘‘§ 5388. Sports betting prohibited on Internet 

2 ‘‘No licensee under this subchapter shall accept Inter3 net bets or wagers on sporting events, with the exception 

4 of pari-mutuel racing as permitted by law. 

5 ‘‘§ 5389. Prohibition on the use of credit cards for 

6 Internet gambling 

7 ‘‘(a) IN GENERAL.—No licensee, no person operating 

8 on behalf of a licensee, and no person accepting payment 

9 for or settlement of a bet or wager who intends to transmit 

10 such payment to a person licensee, may accept a bet or 

11 wager or payment for or settlement of a bet or wager that 

12 is transmitted or otherwise facilitated with a credit card 

13 (as defined in section 5362(11)). 

14 ‘‘(b) EXCEPTION.— 

15 ‘‘(1) CLARIFICATION OF SCOPE.—For any person 

16 licensed to take bets or wagers in accordance with the 

17 Interstate Horseracing Act of 1978, the prohibition in 

18 subsection (a) shall only apply to those activities con19 ducted pursuant to a license under this subchapter. 

20 ‘‘(2) INTRASTATE ACTIVITIES.—For any person 

21 involved in legal, land-based or State- or tribal-regu22 lated intrastate gambling, the prohibition in sub23 section (a) shall only apply to those activities con24 ducted pursuant to a license under this subchapter. 


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1 ‘‘§ 5390. State and tribal lotteries 

2 ‘‘(a) IN GENERAL.—Notwithstanding any other provi3 sion of this subchapter, this subchapter shall not apply to 

4 Internet gambling conducted by any State or tribal lottery 

5 authority when conducted in accordance with subparagraph 

6 (B) or (C) of section 5362(10), as clarified by section 

7 5362(10)(E). 

8 ‘‘(b) RULE OF CONSTRUCTION.—For purposes of the 

9 clarification made by subparagraph (E) of section 5362(10) 

10 to the meaning and intent of subparagraphs (B) and (C) 

11 of such section, Internet gambling described in subsection 

12 (a) is hereby expressly permitted, and operators of any 

13 State or tribal lottery authority conducting Internet gam14 bling facilities operating in accordance with such subpara15 graph (B) or (C), as clarified by such subparagraph (E), 

16 and vendors, suppliers and service providers to such State 

17 or tribal lottery authority, shall not be required to be li18 censed under this subchapter. 

19 ‘‘(c) APPLICABILITY OF OTHER PROVISIONS TO LOT20 TERY ACTIVITY.—To clarify existing law, section 1084 of 

21 title 18 shall not apply to any of the following that occurs 

22 in connection with any Internet gambling conducted by any 

23 State or tribal lottery authority when conducted in accord24 ance with subparagraph (B) or (C) of section 5362(10), as 

25 clarified by section 5362(10)(E): 


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1 ‘‘(1) Any Internet bet or wager, including any 

2 transmission thereof. 

3 ‘‘(2) Any transmission of information assisting 

4 in the placing of bets or wagers. 

5 ‘‘(3) any transmission entitling the recipient to 

6 receive money or credit as a result of bets or wagers, 

7 or for information assisting in the placing of bets or 

8 wagers. 

9 ‘‘(d) AUTHORIZATION OF SPONSOR.—No licensee may 

10 offer services relating to any lottery sponsored by a State, 

11 tribal, or other governmental body without the authoriza12 tion of the official sponsor. 

13 ‘‘§ 5391. Safe harbors 

14 ‘‘It shall be a complete defense against any prosecution 

15 or enforcement action under any Federal or State law 

16 against any person possessing a valid license under this 

17 subchapter that the activity is authorized under and has 

18 been carried out lawfully under the terms of this subchapter. 

19 ‘‘§ 5392. Relation to section 1084 of title 18 and the 

20 Unlawful Internet Gambling Enforcement 

21 Act 

22 ‘‘Section 1084 of title 18 and subchapter IV of this 

23 chapter shall not apply to any Internet bet or wager occur24 ring pursuant to a license issued in accordance with this 

25 subchapter. 


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1 ‘‘§ 5393. Cheating and other fraud 

2 ‘‘(a) ELECTRONIC CHEATING DEVICES PROHIBITED.— 

3 No person initiating, receiving, or otherwise making a bet 

4 or wager with a licensee, or sending, receiving, or inviting 

5 information assisting with a bet or wager with a licensee, 

6 knowingly shall use, or assist another in the use of, an elec7 tronic, electrical, or mechanical device which is designed, 

8 constructed, or programmed specifically for use in obtain9 ing an advantage in any game authorized under this sub10 chapter, where such advantage is prohibited or otherwise 

11 violates the rules of play established by the licensee. 

12 ‘‘(b) ADDITIONAL OFFENSE.—No person initiating, re13 ceiving, or otherwise making a bet or wager with a licensee, 

14 or sending, receiving, or inviting information assisting 

15 with a bet or wager with a licensee, knowingly shall use 

16 or possess any cheating device with intent to cheat or de17 fraud any licensee or other persons placing bets or wagers 

18 with such licensee. 

19 ‘‘(c) PERMANENT INJUNCTION.—Upon conviction of a 

20 person for violation of this section, the court may enter a 

21 permanent injunction enjoining such person from initi22 ating, receiving, or otherwise making bets or wagers or 

23 sending, receiving, or inviting information assisting in the 

24 placing of bets or wagers. 


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1 ‘‘(d) CRIMINAL PENALTY.—Whoever violates subsection 

2 (a) or (b) of this section shall be fined under title 18 or 

3 imprisoned for not more than 5 years, or both.’’. 

4 (b) RULES OF CONSTRUCTION.— 

5 (1) TECHNICAL AND CONFORMING AMEND6 MENT.—Section 310(b)(2) of title 31, United States 

7 Code is amended— 

8 (A) by redesignating subparagraph (J) as 

9 subparagraph (K); and 

10 (B) by inserting after subparagraph (I) the 

11 following new subparagraph: 

12 ‘‘(J) Administer the requirements of sub13 chapter V of chapter 53.’’. 

14 (c) CLERICAL AMENDMENT.—The table of sections for 

15 chapter 53 of title 31, United States Code, is amended by 

16 adding at the end the following: 

‘‘SUBCHAPTER V—REGULATION OF LAWFUL INTERNET GAMBLING

‘‘5381. Congressional findings. 

‘‘5382. Definitions. 

‘‘5383. Establishment and administration of licensing program. 

‘‘5384. Problem Gambling, Responsible Gambling, Consumer Safeguards, and SelfExclusion Program. 

‘‘5385. Financial transaction providers. 

‘‘5386. List of unlawful Internet gambling enterprises. 

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

‘‘5388. Sports betting prohibited on Internet. 

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

‘‘5390. State and tribal lotteries. 

‘‘5391. Safe harbors. 

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

Enforcement Act. 

‘‘5393. Cheating and other fraud.’’. 


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1 SEC. 3. REPORT REQUIRED. 

2 (a) IN GENERAL.—Before the end of the 1-year period 

3 beginning on the effective date of the regulations prescribed 

4 under section 5(a), and annually thereafter, the Secretary 

5 shall submit a report to the Congress on the licensing and 

6 regulation of Internet gambling operators. 

7 (b) INFORMATION REQUIRED.—Each report submitted 

8 under subsection (a) shall include the following informa9 tion: 

10 (1) A comprehensive statement regarding the 

11 prohibitions notified by the States and Indian tribes 

12 pursuant to section 5387 of title 31, United States 

13 Code. 

14 (2) Relevant statistical information on appli15 cants and licenses. 

16 (3) The amount of licensing and user fees col17 lected during the period covered by the report. 

18 (4) Information on regulatory or enforcement ac19 tions undertaken during the period. 

20 (5) Any other information that may be useful to 

21 the Congress in evaluating the effectiveness of the Act 

22 in meeting its purpose, including the provision of 

23 protections against underage gambling, compulsive 

24 gambling, money laundering, and fraud, and in com25 bating tax avoidance relating to Internet gambling. 


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1 SEC. 4. FEASIBILITY STUDY. 

2 The Secretary of the Treasury, in consultation with 

3 appropriate State or tribal officers or agencies, shall con4 duct a feasibility study on safeguards to address gambling 

5 while impaired through programs such as periodic notices, 

6 periodic testing of individuals to establish cognitive com7 petence, and any other similar option that the Secretary 

8 or appropriate State or tribal officers or agencies may de9 termine to be appropriate. 

10 SEC. 5. EFFECTIVE DATE. 

11 (a) REGULATIONS.—The Secretary of the Treasury 

12 shall prescribe such regulations as the Secretary may deter13 mine to be appropriate to implement subchapter V of chap14 ter 53 of title 31, United States Code (as added by section 

15 2(a) of this Act) and shall publish such regulations in final 

16 form in the Federal Register before the end of the 180-day 

17 period beginning on the date of the enactment of this Act. 

18 (b) SCOPE OF APPLICATION.—The amendment made 

19 by section 2(a) shall apply after the end of the 90-day pe20 riod beginning on the date of the publication of the regula21 tions in final form in accordance with subsection (a). 


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Union Calendar No. 398 

111TH CONGRESS 

2D SESSION H. R. 2267 

[Report No. 111–656, Part I] 

A BILL 

To amend title 31, United States Code, to provide 

the tax code, and for other purposes. consumer protections on the Internet, to enforce by the Secretary of the Treasury, to provide for for the licensing of Internet gambling activities 

NOVEMBER 30, 2010 

Committee on Energy and Commerce discharged; comState of the Union and ordered to be printed mitted to the Committee of the Whole House on the 


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