I 

111TH CONGRESS 

1ST SESSION H. R. 2267 

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 

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. 

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


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Internet Gambling 

3 Regulation, Consumer Protection, and Enforcement Act’’. 

4 SEC. 2. FEDERAL LICENSING REQUIREMENT FOR INTER5 NET GAMBLING OPERATORS. 

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

7 States Code, is amended by adding at the end the fol8 lowing new subchapter: 

9 ‘‘SUBCHAPTER V—REGULATION OF LAWFUL 

10 INTERNET GAMBLING 

11 ‘‘§ 5381. Congressional findings 

12 ‘‘The Congress finds the following: 

13 ‘‘(1) Since the development of the Internet, mil14 lions of people have chosen to gamble online, and 

15 today Internet gambling is offered by operators lo16 cated in many different countries under a variety of 

17 licensing and regulatory regimes. 

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

19 for gambling by persons in the United States, there 

20 is no Federal or State regulatory regime in place to 

21 protect United States citizens who choose to engage 

22 in this interstate activity, or to oversee operators to 

23 establish and enforce standards of integrity and fair24 ness. 

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

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1 ious forms of Federal and State control, regulation, 

2 and enforcement, with some form of gambling being 

3 permitted in nearly every State and by many Indian 

4 tribes. 

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

6 should be controlled by a strict Federal licensing and 

7 regulatory framework to protect underage and other8 wise vulnerable individuals, to ensure the games are 

9 fair, to address the concerns of law enforcement, 

10 and to enforce any limitations on the activity estab11 lished by the States and Indian tribes. 

12 ‘‘(5) An effective Federal licensing system 

13 would ensure that licenses are issued only to Inter14 net gambling operators which meet strict criteria to 

15 protect consumers, and which— 

16 ‘‘(A) are in good financial and legal stand17 ing, and of good character, honesty, and integ18 rity; 

19 ‘‘(B) utilize appropriate technology to de20 termine the age and location of users; 

21 ‘‘(C) adopt and implement systems to pro22 tect minors and problem gamblers; 

23 ‘‘(D) adopt and implement systems to en24 force any applicable Federal, State, and Indian 

25 tribe limitations on Internet gambling; and 


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

2 identify and combat money laundering and 

3 fraud relating to Internet gambling, and to pro4 tect the privacy and security of users. 

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

6 provisions of this Act to all persons, locations, equip7 ment, practices, and associations related to Internet 

8 gambling, with each State and Indian tribe having 

9 the ability to limit Internet gambling operators from 

10 offering Internet gambling to persons located within 

11 its territory by opting out of the provisions of this 

12 Act. 

13 ‘‘§ 5382. Definitions 

14 ‘‘For purposes of this subchapter, the following defi15 nitions shall apply: 

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

17 any person who has applied for a license pursuant 

18 to this subchapter. 

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

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

21 ‘‘(3) ENFORCEMENT AGENT.—The term ‘en22 forcement agent’ means any individual authorized by 

23 the Secretary to enforce the provisions of this sub24 chapter and regulations prescribed under this sub25 chapter. 


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

2 terms ‘Indian lands’ and ‘Indian tribe’ have the 

3 same meanings as in section 4 of the Indian Gaming 

4 Regulatory Act. 

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

6 same meaning as in section 5362(5). 

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

8 entity authorized to operate an Internet gambling 

9 facility in accordance with this subchapter. 

10 ‘‘(7) OPERATE AN INTERNET GAMBLING FACIL11 ITY.—The term ‘operate an Internet gambling facil12 ity’ or ‘operation of an Internet gambling facility’ 

13 means the direction, management, supervision, or 

14 control of an Internet site through which bets or wa15 gers are initiated, received, or otherwise made, 

16 whether by telephone, Internet, satellite, or other 

17 wire or wireless communication. 

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

19 the Secretary of the Treasury, or any person des20 ignated by the Secretary. 

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

22 State of the United States, the District of Columbia, 

23 or any commonwealth, territory, or other possession 

24 of the United States. 


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

2 event’ means any athletic competition, whether pro3 fessional, scholastic, or amateur. 

4 ‘‘§ 5383. Establishment and administration of licens5 ing program 

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

7 shall have responsibility for the following activities: 

8 ‘‘(1) Exercising full regulatory jurisdiction 

9 over— 

10 ‘‘(A) the operation of Internet gambling fa11 cilities by licensees; and 

12 ‘‘(B) the licensure of all applicants. 

13 ‘‘(2) Prescribing such regulations as may be 

14 necessary to administer and enforce the require15 ments of this subchapter. 

16 ‘‘(3) Employing enforcement agents with suffi17 cient training and experience to administer the re18 quirements of this subchapter and the regulations 

19 prescribed under this subchapter. 

20 ‘‘(4) Enforcing the requirements of this sub21 chapter through all appropriate means provided 

22 under this subchapter and other provisions of law. 

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

24 ‘‘(1) LICENSING REQUIRED FOR CERTAIN

25 INTERNET GAMBLING.—No person may operate an 


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1 Internet gambling facility that knowingly accepts 

2 bets or wagers from persons located in the United 

3 States without a license issued by the Secretary in 

4 accordance with this subchapter. 

5 ‘‘(2) AUTHORITY UNDER VALID LICENSE.—A li6 censee may accept bets or wagers from persons lo7 cated in the United States, subject to the limitations 

8 set forth in this subchapter, so long as its license re9 mains in good standing. 

10 ‘‘(c) APPLICATION FOR LICENSE.— 

11 ‘‘(1) IN GENERAL.—Any person seeking author12 ity to operate an Internet gambling facility offering 

13 services to persons in the United States may apply 

14 for a license issued by the Secretary. 

15 ‘‘(2) INFORMATION REQUIRED.—Any applica16 tion for a license under this subchapter shall contain 

17 such information as may be required by the Sec18 retary, including the following: 

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

20 applicant, any senior executive and director of 

21 the applicant, and any person deemed to be in 

22 control of the applicant. 

23 ‘‘(B) The financial statements of the appli24 cant. 


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1 ‘‘(C) Documentation showing the corporate 

2 structure of the applicant and all related busi3 nesses and affiliates. 

4 ‘‘(D) Documentation containing detailed 

5 evidence of the applicant’s plan for complying 

6 with all applicable regulations should a license 

7 be issued, with particular emphasis on the ap8 plicant’s ability to— 

9 ‘‘(i) protect underage and problem 

10 gamblers; 

11 ‘‘(ii) ensure games are being operated 

12 fairly; and 

13 ‘‘(iii) comply with and address the 

14 concerns of law enforcement. 

15 ‘‘(E) Certification that the applicant 

16 agrees to submit to United States jurisdiction 

17 and all applicable United States laws relating to 

18 acceptance by the applicant of bets or wagers 

19 over the Internet from persons located in the 

20 United States and all associated activities. 

21 ‘‘(d) STANDARDS FOR LICENSE ISSUANCE; SUIT22 ABILITY QUALIFICATIONS AND DISQUALIFICATION

23 STANDARDS.— 

24 ‘‘(1) SUITABILITY FOR LICENSING STAND25 ARDS.— 


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1 ‘‘(A) IN GENERAL.—No person shall be eli2 gible to obtain a license unless the Secretary 

3 has determined, upon completion of a back4 ground check and investigation, that the appli5 cant, and any person deemed to be in control 

6 of the applicant, is suitable for licensing. 

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

8 applicant is a corporation, partnership, or other 

9 business entity, a background check and inves10 tigation shall occur with respect to the presi11 dent or other chief executive of the corporation, 

12 partnership, or other business entity and other 

13 partners or senior executives and directors of 

14 the corporation, partnership, or entity, as deter15 mined appropriate by the Secretary, in the Sec16 retary’s sole discretion. 

17 ‘‘(C) BACKGROUND CHECK AND INVES18 TIGATION.—The Secretary shall establish 

19 standards and procedures for conducting back20 ground checks and investigations for purposes 

21 of this subsection. 

22 ‘‘(2) SUITABILITY FOR LICENSING STANDARDS

23 DESCRIBED.—For purposes of this subchapter, an 

24 applicant and any other person associated with the 

25 applicant, as applicable, is suitable for licensing if 


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1 the applicant demonstrates to the Secretary by clear 

2 and convincing evidence that the applicant (or indi3 vidual associated with the applicant, as applicable)— 

4 ‘‘(A) is a person of good character, hon5 esty, and integrity; 

6 ‘‘(B) is a person whose prior activities, 

7 reputation, habits, and associations do not— 

8 ‘‘(i) pose a threat to the public inter9 est or to the effective regulation and con10 trol of the licensed activities; or 

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

12 unsuitable, unfair, or illegal practices, 

13 methods, and activities in the conduct of 

14 the licensed activities or the carrying on of 

15 the business and financial arrangements 

16 incidental to such activities; 

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

18 activities for which the applicant is licensed in 

19 accordance with the provisions of this sub20 chapter and any regulations prescribed under 

21 this subchapter; 

22 ‘‘(D) has or guarantees acquisition of ade23 quate business competence and experience in 

24 the operation of Internet gambling facilities; 

25 and 


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

2 for the nature of the proposed operation and 

3 from a suitable source. 

4 ‘‘(3) UNSUITABLE FOR LICENSING.—An appli5 cant or any other person may not be determined to 

6 be suitable for licensing within the meaning of this 

7 subchapter if the applicant or such person— 

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

9 documentation material to a determination of 

10 suitability for licensing under paragraph (1); 

11 ‘‘(B) has supplied information which is un12 true or misleading as to a material fact per13 taining to any such determination; 

14 ‘‘(C) has been convicted of an offense pun15 ishable by imprisonment of more than 1 year; 

16 or 

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

18 Federal or State tax returns or in the payment 

19 of any taxes, penalties, additions to tax, or in20 terest owed to a State or the United States. 

21 ‘‘(4) ONGOING REQUIREMENT.—A licensee (and 

22 any other person who is required to be determined 

23 to be suitable for licensing in connection with such 

24 licensee) shall meet the standards necessary to be 


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1 suitable for licensing throughout the term of the li2 cense. 

3 ‘‘(5) PROTECTION OF THE PUBLIC TRUST.— 

4 The Secretary may take such action as is necessary 

5 to protect the public trust, including the implemen6 tation of such safeguards as may be necessary to en7 sure the operation of an Internet gambling facility 

8 licensed under this subchapter is controlled only by 

9 persons who are suitable for licensing. 

10 ‘‘(6) ENFORCEMENT ACTIONS.— 

11 ‘‘(A) DETERMINATION OF UNSUITABILITY

12 FOR CONTINUED LICENSURE.—If the Secretary 

13 finds that an individual owner or holder of a se14 curity of a licensee, or of a holding or inter15 mediary company of a licensee or any person 

16 with an economic interest in a licensee or a di17 rector, partner, or officer of a licensee is not 

18 suitable for licensing, the Secretary may deter19 mine that the licensee is not qualified to con20 tinue as a licensee. 

21 ‘‘(B) ACTION TO PROTECT THE PUBLIC IN22 TEREST, INCLUDING SUSPENSION.—If the Sec23 retary may determine that the licensee is not 

24 qualified to continue as a licensee, the Secretary 

25 shall propose action necessary to protect the 


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1 public interest, including, if deemed necessary, 

2 the suspension of the licensee. 

3 ‘‘(C) IMPOSITION OF CONDITIONS INCLUD4 ING REMOVAL OF PARTIES.—Notwithstanding a 

5 determination under subparagraph (A), the 

6 Secretary may allow a licensee to continue en7 gaging in licensed activities by imposing condi8 tions on the licensee under penalty of revocation 

9 or suspension of a license, including— 

10 ‘‘(i) the identification of any person 

11 determined to be unsuitable for licensing; 

12 and 

13 ‘‘(ii) the establishment of appropriate 

14 safeguards to ensure such person is ex15 cluded from any interest in the licensed ac16 tivities. 

17 ‘‘(e) ASSESSMENTS FOR ADMINISTRATIVE EX18 PENSES.— 

19 ‘‘(1) USER FEES.— 

20 ‘‘(A) IN GENERAL.—The cost of admin21 istering this subchapter with respect to each li22 censee, including the cost of any review or ex23 amination of a licensee to ensure compliance 

24 with the terms of the license and this sub25 chapter, shall be assessed by the Secretary 


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1 against the licensee institution by written notice 

2 in an amount appropriate to meet the Sec3 retary’s expenses in carrying out such adminis4 tration, review, or examination. 

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

6 the Secretary as user fees under subparagraph 

7 (A) shall— 

8 ‘‘(i) be maintained by the Secretary 

9 solely for use in accordance with clause 

10 (ii); 

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

12 cover all expenses incurred by the Sec13 retary in carrying out this subchapter; and 

14 ‘‘(iii) not be construed to be Govern15 ment funds or appropriated monies, or 

16 subject to apportionment for the purposes 

17 of chapter 15 or any other authority. 

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

19 whom an assessment is assessed under this 

20 paragraph shall be afforded an agency hearing 

21 if such person submits a request for such hear22 ing within 20 days after the issuance of the no23 tice of assessment. 

24 ‘‘(D) COLLECTION.— 


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

2 to pay an assessment under this paragraph 

3 after the assessment has become final, the 

4 Secretary shall recover the amount as5 sessed by action in the appropriate United 

6 States district court. 

7 ‘‘(ii) APPROPRIATENESS OF ASSESS8 MENT NOT REVIEWABLE.—In any civil ac9 tion under clause (i), the validity and ap10 propriateness of the assessment shall not 

11 be subject to review. 

12 ‘‘(2) DIRECT AND EXCLUSIVE OBLIGATION OF

13 LICENSEE.—The user fee shall be the direct and ex14 clusive obligation of the licensee and may not be de15 ducted from amounts available as deposits to any 

16 person placing a bet. 

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

18 grant licenses under this subchapter if the applicant meets 

19 the criteria set by the Secretary set forth in this sub20 chapter and in any regulations promulgated thereunder. 

21 ‘‘(g) SAFEGUARDS REQUIRED OF LICENSEE.—No 

22 person shall receive or retain a license under this section 

23 unless the person maintains or requires mechanisms so 

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1 lished under section 5384, are met with respect to any 

2 Internet bet or wager: 

3 ‘‘(1) LEGAL AGE.—Appropriate safeguards to 

4 ensure that the individual placing a bet or wager is 

5 of legal age as defined by the law of the State or 

6 tribal area in which the individual is located at the 

7 time the bet or wager is placed. 

8 ‘‘(2) PERMISSIBLE LOCATION.—Appropriate 

9 safeguards to ensure that the individual placing a 

10 bet or wager is physically located in a jurisdiction 

11 that permits Internet gambling at the time the bet 

12 or wager is placed. 

13 ‘‘(3) COLLECTION OF CUSTOMER TAXES.—Ap14 propriate mechanisms to ensure that all taxes relat15 ing to Internet gambling from persons engaged in 

16 Internet gambling are collected at the time of any 

17 payment of any proceeds of Internet gambling. 

18 ‘‘(4) COLLECTION OF TAXES OF LICENSEE.— 

19 Appropriate mechanisms to ensure that all taxes re20 lating to Internet gambling from any licensee are 

21 collected and disbursed as required by law, and that 

22 adequate records to enable later audit or verification 

23 are maintained. 


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1 ‘‘(5) SAFEGUARDS AGAINST FINANCIAL

2 CRIME.—Appropriate safeguards to combat fraud, 

3 money laundering, and terrorist finance. 

4 ‘‘(6) SAFEGUARDS AGAINST COMPULSIVE GAM5 BLING.—Appropriate safeguards to combat compul6 sive Internet gambling. 

7 ‘‘(7) PRIVACY SAFEGUARDS.—Appropriate safe8 guards to protect the privacy and security of any 

9 person engaged in Internet gambling. 

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

11 mechanisms to ensure that any assessment under 

12 subsection (e) is paid to the Secretary. 

13 ‘‘(9) OTHER REQUIREMENTS.—Such other re14 quirements as the Secretary may establish by regula15 tion or order. 

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

17 ‘‘(1) TERM.—Any license issued under this sec18 tion shall be issued for a 5-year term beginning on 

19 the date of issuance. 

20 ‘‘(2) RENEWAL.—Licenses may be renewed in 

21 accordance with the requirements prescribed by the 

22 Secretary pursuant to this subchapter. 

23 ‘‘(i) REVOCATION OF LICENSE.— 


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

2 this subchapter may be revoked by the Secretary 

3 if— 

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

5 provision of this subchapter; or 

6 ‘‘(B) the licensee is determined to be un7 suitable for licensing, within the meaning of 

8 this subchapter. 

9 ‘‘(2) FINAL ACTION.—Any revocation of a li10 cense under paragraph (1) shall be treated as a final 

11 action by the Secretary. 

12 ‘‘(j) REGULATIONS.—The regulations prescribed by 

13 the Secretary under this subchapter shall include regula14 tions to fully implement— 

15 ‘‘(1) safeguards required for licensees under 

16 subsection (g); and 

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

18 the Problem Gambling, Responsible Gambling, and 

19 Self-Exclusion Program under section 5384. 

20 ‘‘(k) ADMINISTRATIVE PROVISIONS.— 

21 ‘‘(1) GENERAL POWERS OF SECRETARY.—The 

22 Secretary shall have the authority to engage in the 

23 following: 

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1 chapter and regulations prescribed under this 

2 subchapter. 

3 ‘‘(B) Require licensees to maintain appro4 priate procedures to ensure compliance with 

5 this subchapter and regulations prescribed 

6 under this subchapter. 

7 ‘‘(C) Examine any licensee and any books, 

8 papers, records, or other data of licensees rel9 evant to any recordkeeping or reporting require10 ments imposed by the Secretary under this sub11 chapter. 

12 ‘‘(D) When determined by the Secretary to 

13 be necessary, summon a licensee or an appli14 cant for a license, an officer or employee of a 

15 licensee or any such applicant (including a 

16 former officer or employee), or any person hav17 ing possession, custody, or care of the reports 

18 and records required by the Secretary under 

19 this subchapter, to appear before the Secretary 

20 or a designee of the Secretary at a time and 

21 place named in the summons and to produce 

22 such books, papers, records, or other data, and 

23 to give testimony, under oath, as may be rel24 evant or material to any investigation in con25 nection with the enforcement of this subchapter 


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1 or any application for a license under this sub2 chapter. 

3 ‘‘(E) Investigate any violation of this sub4 chapter and any regulation under this sub5 chapter and any other violation of law relating 

6 to the operation of an Internet gambling facil7 ity. 

8 ‘‘(F) Conduct continuing reviews of appli9 cants and licensees and the operation of Inter10 net gambling facilities by use of technological 

11 means, onsite observation of facilities, including 

12 servers, or other reasonable means to assure 

13 compliance with this subchapter and any regu14 lations promulgated hereunder. 

15 ‘‘(2) ADMINISTRATIVE ASPECTS OF SUM16 MONS.— 

17 ‘‘(A) PRODUCTION AT DESIGNATED

18 SITE.—A summons issued pursuant to this sub19 section may require that books, papers, records, 

20 or other data stored or maintained at any place 

21 be produced at any business location of a li22 censee or applicant for a license or any des23 ignated location in any State or in any territory 

24 or other place subject to the jurisdiction of the 

25 United States not more than 500 miles distant 


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1 from any place where the licensee or applicant 

2 for a license operates or conducts business in 

3 the United States. 

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

5 United States shall not be liable for any ex6 pense incurred in connection with the produc7 tion of books, papers, records, or other data 

8 under this subsection. 

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

10 summons issued under this subsection may be 

11 by registered mail or in such other manner cal12 culated to give actual notice as the Secretary 

13 may prescribe by regulation. 

14 ‘‘(3) CONTUMACY OR REFUSAL.— 

15 ‘‘(A) REFERRAL TO ATTORNEY GEN16 ERAL.—In case of contumacy by a person 

17 issued a summons under this subsection or a 

18 refusal by such person to obey such summons 

19 or to allow the Secretary to conduct an exam20 ination, the Secretary shall refer the matter to 

21 the Secretary of the Treasury for referral to the 

22 Attorney General. 

23 ‘‘(B) JURISDICTION OF COURT.—The At24 torney General may invoke the aid of any court 


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1 of the United States to compel compliance with 

2 the summons within the jurisdiction of which— 

3 ‘‘(i) the investigation which gave rise 

4 to the summons or the examination is 

5 being or has been carried on; 

6 ‘‘(ii) the person summoned is an in7 habitant; or 

8 ‘‘(iii) the person summoned carries on 

9 business or may be found. 

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

11 an order requiring the person summoned to ap12 pear before the Secretary or a delegate of the 

13 Secretary to produce books, papers, records, 

14 and other data, to give testimony as may be 

15 necessary to explain how such material was 

16 compiled and maintained, to allow the Secretary 

17 to examine the business of a licensee, and to 

18 pay the costs of the proceeding. 

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

20 Any failure to obey the order of the court may 

21 be punished by the court as a contempt thereof. 

22 ‘‘(E) SERVICE OF PROCESS.—All process 

23 in any case under this subsection may be served 

24 in any judicial district in which such person 

25 may be found. 


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1 ‘‘(l) CIVIL MONEY PENALTIES.— 

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

3 upon any licensee or other person subject to the re4 quirements of this subchapter for any willful viola5 tion of this subchapter or any regulation prescribed 

6 or order issued under this subchapter, a civil penalty 

7 of not more than the greater of— 

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

9 involved in the violation, if any; or 

10 ‘‘(B) $25,000. 

11 ‘‘(2) ASSESSMENT.— 

12 ‘‘(A) WRITTEN NOTICE.—Any penalty im13 posed under paragraph (1) may be assessed and 

14 collected by the Secretary by written notice. 

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

16 respect to any assessment under paragraph (1), 

17 a hearing is not requested pursuant to subpara18 graph (E) within the period of time allowed 

19 under such subparagraph, the assessment shall 

20 constitute a final and unappealable order. 

21 ‘‘(C) AUTHORITY TO MODIFY OR REMIT

22 PENALTY.—The Secretary may compromise, 

23 modify, or remit any penalty which the Sec24 retary may assess or has already assessed 

25 under paragraph (1). 


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1 ‘‘(D) MITIGATING FACTORS.—In deter2 mining the amount of any penalty imposed 

3 under paragraph (1), the Secretary shall take 

4 into account the appropriateness of the penalty 

5 with respect to— 

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

7 and the good faith of the person against 

8 whom the penalty is assessed; 

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

10 ‘‘(iii) the history of previous viola11 tions; and 

12 ‘‘(iv) such other matters as justice 

13 may require. 

14 ‘‘(E) HEARING.—The person against 

15 whom any penalty is assessed under paragraph 

16 (1) shall be afforded an agency hearing if such 

17 person submits a request for such hearing with18 in 20 days after the issuance of the notice of 

19 assessment. 

20 ‘‘(F) COLLECTION.— 

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

22 to pay an assessment after any penalty as23 sessed under this paragraph has become 

24 final, the Secretary shall recover the 


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1 amount assessed by action in the appro2 priate United States district court. 

3 ‘‘(ii) APPROPRIATENESS OF PENALTY

4 NOT REVIEWABLE.—In any civil action 

5 under clause (i), the validity and appro6 priateness of the penalty shall not be sub7 ject to review. 

8 ‘‘(G) DISBURSEMENT.—All penalties col9 lected under authority of this subsection shall 

10 be deposited into the Treasury. 

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

12 a licensee of any civil penalty assessed under this 

13 subsection that has become final shall be a require14 ment for the retention of its license. 

15 ‘‘(m) TREATMENT OF RECORDS.—In light of busi16 ness competition, confidentiality, and privacy concerns, 

17 the Secretary shall protect from disclosure information 

18 submitted in support of a license application under this 

19 subchapter and information collected in the course of reg20 ulating licensees to the full extent permitted by sections 

21 552 and 552a of title 5, United States Code. 

22 ‘‘(n) SUITABILITY FOR LICENSING REQUIREMENTS

23 FOR CERTAIN SERVICE PROVIDERS.— 

24 ‘‘(1) IN GENERAL.—Any person that knowingly 

25 manages, administers, or controls bets or wagers 


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1 that are initiated, received, or otherwise made within 

2 the United States or that otherwise manages or ad3 ministers the games with which such bets or wagers 

4 are associated must meet all of the suitability for li5 censing criteria established under this section in the 

6 same manner and to the same extent as if that per7 son were itself a licensee. 

8 ‘‘(2) SUBJECT TO SAME ENFORCEMENT JURIS9 DICTION.—Any failure on the part of such person to 

10 remain suitable for licensing shall be grounds for 

11 revocation of the license of the licensee for whom 

12 such service is provided, in the same manner and in 

13 accordance with subsection (i). 

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

15 BODY CERTIFICATIONS OF SUITABILITY FOR APPLI16 CANTS.— 

17 ‘‘(1) QUALIFICATION OF STATE AND TRIBAL

18 REGULATORY BODIES.— 

19 ‘‘(A) APPLICATION FOR DETERMINA20 TION.—Any State or tribal regulatory body with 

21 expertise in regulating gambling may— 

22 ‘‘(i) notify the Secretary of its willing23 ness to review prospective applicants to 

24 certify whether any such applicant meets 


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1 the qualifications established under this 

2 subchapter; 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 

7 body is qualified to conduct such review 

8 and may be relied upon by the Secretary to 

9 make any such certification. 

10 ‘‘(B) DETERMINATION AND NOTICE.— 

11 Within 60 days after receiving any notice under 

12 subparagraph(A)(i), the Secretary shall— 

13 ‘‘(i) make the determination as to 

14 whether a State or tribal regulatory body 

15 is qualified to conduct a review of prospec16 tive applicants and may be relied upon to 

17 certify whether any such applicant meets 

18 the qualifications established under this 

19 subchapter; and 

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

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

23 During the period that any determination of quali24 fication under paragraph (1)(B) is in effect with reVerDate Nov 24 2008 04:51 May 07, 2009 Jkt 079200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\H2267.IH H2267

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1 spect to any such State or tribal regulatory body, 

2 the 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 regu11 latory body determines to be necessary to meet 

12 its expenses in the conduct of such review; and 

13 ‘‘(C) shall process and assess each appli14 cant fairly and equally based on objective cri15 teria, regardless of any prior licensing of an ap16 plicant 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 

21 with all documentation the applicant has submitted 

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

23 Secretary, and any such certification and docu24 mentation shall be relied on by the Secretary as eviVerDate Nov 24 2008 04:51 May 07, 2009 Jkt 079200 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 E:\BILLS\H2267.IH H2267

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1 dence that an applicant has met the suitability for 

2 licensing requirements under this section. 

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

4 Notwithstanding any certification of suitability for 

5 licensing made by any State or tribal regulatory 

6 body, the Secretary retains the authority to review, 

7 withhold, or revoke any license if the Secretary has 

8 reason to believe that any applicant or licensee does 

9 not meet the suitability requirements for licensing 

10 established under this section, or any other require11 ment of a licensee. 

12 ‘‘(5) RELIANCE ON QUALIFIED REGULATORY

13 BODY FOR OTHER PURPOSES.—At the discretion of 

14 the Secretary, the Secretary may rely on any State 

15 and tribal regulatory body found qualified under this 

16 subsection for such other regulatory and enforce17 ment activities as the Secretary finds to be useful 

18 and appropriate to carry out the purposes of this 

19 subchapter. 

20 ‘‘(6) REVOCATION OF QUALIFICATION.—The 

21 Secretary may revoke, at any time and for any rea22 son, the qualification of any State or tribal regu23 latory body to certify or to conduct any other regu24 latory or enforcement activity to carry out the pur25 poses of this subchapter. 


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1 ‘‘§ 5384. Problem Gambling, Responsible Gambling, 

2 and Self-Exclusion Program 

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

4 any State or tribal regulatory body that has been qualified 

5 under subsection 5383(o) shall prescribe regulations for 

6 the development of a Problem Gambling, Responsible 

7 Gambling, and Self-Exclusion Program on the basis of 

8 standards that each licensee shall implement as a condi9 tion of licensure. 

10 ‘‘(b) MINIMUM REQUIREMENTS.—Any application for 

11 a license shall include a submission to the Secretary or 

12 qualified State or tribal regulatory body setting forth a 

13 comprehensive program that is intended— 

14 ‘‘(1) to verify the identity and age of each cus15 tomer; 

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

17 legal age as defined by State or tribal law, as appli18 cable, may initiate or otherwise make any bets or 

19 wagers; 

20 ‘‘(3) to verify the State or tribal land in which 

21 the customer is located at the time the customer at22 tempts to initiate a bet or wager; 

23 ‘‘(4) to ensure that no customer who is located 

24 in a State or tribal land that opts out pursuant to 

25 section 5386 can initiate or otherwise make a bet or 

26 wager prohibited by such opt-out; 


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1 ‘‘(5) to ensure that responsible gambling mate2 rials are made available to customers upon request; 

3 ‘‘(6) to make available individualized respon4 sible gambling options that any customer may 

5 choose, including any stake limit, loss limit, deposit 

6 limit, and session time limit option, and any other 

7 similar option, that the Secretary or qualified State 

8 or tribal regulatory body may deem appropriate and 

9 require to be made available; 

10 ‘‘(7) to protect the privacy and security of any 

11 customer in connection with any lawful Internet 

12 gambling activity; and 

13 ‘‘(8) to protect against fraud and money laun14 dering relating to Internet gambling activity. 

15 ‘‘(c) LIST OF PERSONS SELF-EXCLUDED FROM GAM16 BLING ACTIVITIES.— 

17 ‘‘(1) ESTABLISHMENT.— 

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

19 provide by regulation for the establishment of a 

20 list of persons self-excluded from gambling ac21 tivities at all licensee sites. 

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

23 may request placement on the list of self-ex24 cluded persons by— 


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

2 established by the Secretary that the per3 son wishes to be denied gambling privi4 leges; and 

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

6 of voluntary exclusion, the person may not 

7 collect any winnings or recover any losses 

8 resulting from any gambling activity at 

9 any licensee sites. 

10 ‘‘(2) PLACEMENT AND REMOVAL PROCE11 DURES.—The regulations prescribed by the Sec12 retary under paragraph (1)(A) shall establish proce13 dures for placements on, and removals from, the list 

14 of self-excluded persons. 

15 ‘‘(3) LIMITATION ON LIABILITY.— 

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

17 the Secretary, an enforcement agent, or a li18 censee, or any employee or agent of the United 

19 States, the Secretary, an enforcement agent, or 

20 a licensee, shall not be liable to any self-ex21 cluded person or to any other party in any judi22 cial or administrative proceeding for any harm, 

23 monetary or otherwise, which may arise as a re24 sult of— 


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1 ‘‘(i) any failure to withhold gambling 

2 privileges from, or to restore gambling 

3 privileges to, a self-excluded person; or 

4 ‘‘(ii) otherwise permitting a self-ex5 cluded person to engage in gambling activ6 ity while on the list of self-excluded per7 sons. 

8 ‘‘(B) RULE OF CONSTRUCTION.—No provi9 sion of subparagraph (A) shall be construed as 

10 preventing the Director from assessing any reg11 ulatory sanction against a licensee for failing to 

12 comply with the minimum standards prescribed 

13 pursuant to this subsection. 

14 ‘‘(4) DISCLOSURE PROVISIONS.— 

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

16 other provision of Federal or State law, the list 

17 of self-excluded persons shall not be open to 

18 public inspection. 

19 ‘‘(B) AFFILIATE DISCLOSURE.—Any li20 censees may disclose the identities of persons on 

21 the self-excluded list to any affiliated company 

22 or, where required to comply with this sub23 section, any service provider, to the extent that 

24 the licensee ensures that any affiliated company 

25 or service provider maintains such information 


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1 under confidentiality provisions comparable to 

2 those in this subsection. 

3 ‘‘(5) LIMITATION ON LIABILITY FOR DISCLO4 SURE.—A licensee or an employee, agent, or affiliate 

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

6 person or to any other party in any judicial pro7 ceeding for any harm, monetary or otherwise, which 

8 may arise as a result of disclosure or publication in 

9 any manner. 

10 ‘‘(d) GAMBLING BY PROHIBITED PERSONS.— 

11 ‘‘(1) PROHIBITION BENEFITTING FROM PRO12 HIBITED GAMBLING ACTIVITY.—A person who is 

13 prohibited from gambling with a licensee by law, or 

14 by order of the Secretary or any court of competent 

15 jurisdiction, including any person on the self-exclu16 sion list as established in accordance with subsection 

17 (c), shall not collect, in any manner or proceeding, 

18 any winnings or recover any losses arising as a re19 sult of any prohibited gambling activity. 

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

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

22 that has been obtained by, or is owed to, any prohib23 ited person by a licensee as a result of bets or wa24 gers made by a prohibited person shall be subject to 

25 forfeiture by order of the Secretary, following notice 


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1 to the prohibited person and opportunity to be 

2 heard. 

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

4 funds forfeited pursuant to this subsection shall be 

5 deposited into the general fund of the Treasury. 

6 ‘‘(e) PROBLEM OR COMPULSIVE GAMBLERS NOT ON

7 THE LIST OF SELF-EXCLUDED PERSONS.— 

8 ‘‘(1) PUBLIC AWARENESS PROGRAM.— 

9 ‘‘(A) IN GENERAL.—The Secretary and 

10 any State or tribal regulatory body that has 

11 been qualified under subsection 5383(o) shall 

12 provide by regulation for the establishment of a 

13 program to alert the public to the existence, 

14 consequences, and availability of the self-exclu15 sion list, and shall prepare and promulgate 

16 written materials to be used in such a program. 

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

18 Regulations prescribed under subparagraph (A) 

19 may require a licensee to make available lit20 erature or screen displays relating to the exist21 ence of the program. 

22 ‘‘(2) RULE OF CONSTRUCTION.—No provision 

23 of this subsection shall be construed as creating a 

24 legal duty in the Secretary, a qualified State or trib25 al regulatory body, a licensee, or any representative 


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1 of a licensee to identify or to exclude problem or 

2 compulsive gamblers not on the list of self-excluded 

3 persons. 

4 ‘‘(3) IMMUNITY.—The United States, the Sec5 retary, a qualified State or tribal regulatory body, a 

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

7 shall not be liable to any person in any proceeding 

8 for losses or other damages of any kind arising out 

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

10 that the person was a compulsive, problem, or patho11 logical gambler. 

12 ‘‘§ 5385. Financial transaction providers 

13 ‘‘(a) IN GENERAL.—No financial transaction pro14 vider shall be held liable for engaging in financial activities 

15 and transactions for or on behalf of a licensee or involving 

16 a licensee, including payments processing activities, if such 

17 activities are performed in compliance with this sub18 chapter and with applicable Federal and State laws. 

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

20 following definitions shall apply: 

21 ‘‘(1) FINANCIAL TRANSACTION PROVIDER.— 

22 The term ‘financial transaction provider’ means a 

23 creditor, credit card issuer, financial institution, op24 erator of a terminal at which an electronic fund 

25 transfer may be initiated, money transmitting busiVerDate Nov 24 2008 04:51 May 07, 2009 Jkt 079200 PO 00000 Frm 00036 Fmt 6652 Sfmt 6201 E:\BILLS\H2267.IH H2267

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1 ness, or international, national, regional, or local 

2 payment network utilized to effect a credit trans3 action, electronic fund transfer, stored value product 

4 transaction, or money transmitting service, or a par5 ticipant in such network, or other participant in a 

6 payment system. 

7 ‘‘(2) OTHER TERMS.— 

8 ‘‘(A) CREDIT, CREDITOR, CREDIT CARD, 

9 AND CARD ISSUER.—The terms ‘credit’, ‘cred10 itor’, ‘credit card’, and ‘card issuer’ have the 

11 meanings given the terms in section 103 of the 

12 Truth in Lending Act. 

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

14 term ‘electronic fund transfer’— 

15 ‘‘(i) has the meaning given the term 

16 in section 903 of the Electronic Fund 

17 Transfer Act, except that the term includes 

18 transfers that would otherwise be excluded 

19 under section 903(6)(E) of such Act; and 

20 ‘‘(ii) includes any fund transfer cov21 ered by Article 4A of the Uniform Com22 mercial Code, as in effect in any State. 

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

24 ‘financial institution’ has the meaning given the 

25 term in section 903 of the Electronic Fund 


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•HR 2267 IH

1 Transfer Act, except that such term does not 

2 include a casino, sports book, or other business 

3 at or through which bets or wagers may be 

4 placed or received. 

5 ‘‘(D) INSURED DEPOSITORY INSTITU6 TION.—The term ‘insured depository institu7 tion’— 

8 ‘‘(i) has the meaning given the term 

9 in section 3(c) of the Federal Deposit In10 surance Act; and 

11 ‘‘(ii) includes an insured credit union 

12 (as defined in section 101 of the Federal 

13 Credit Union Act). 

14 ‘‘(E) MONEY TRANSMITTING BUSINESS

15 AND MONEY TRANSMITTING SERVICE.—The 

16 terms ‘money transmitting business’ and 

17 ‘money transmitting service’ have the meanings 

18 given the terms in section 5330(d) (determined 

19 without regard to any regulations prescribed by 

20 the Secretary under such section). 

21 ‘‘§ 5386. Limitation of licenses in States and Indian 

22 lands 

23 ‘‘(a) STATE OPT-OUT EXERCISE.— 

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


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1 ‘‘(A) IN GENERAL.—No licensee may en2 gage, under any license issued under this sub3 chapter, in the operation of an Internet gam4 bling facility that knowingly accepts bets or wa5 gers initiated by persons who reside in any 

6 State which provides notice that it will limit 

7 such bets or wagers, if the Governor or other 

8 chief executive officer of such State informs the 

9 Director of such limitation, in a manner which 

10 clearly identifies the nature and extent of such 

11 limitation, before the end of the 90-day period 

12 beginning on the date of the enactment of the 

13 Internet Gambling Regulation, Consumer Pro14 tection, and Enforcement Act, or in accordance 

15 with paragraph (2), until such time as any no16 tice of any amendment or repeal of such spe17 cific limitation becomes effective under para18 graph (2). 

19 ‘‘(B) COORDINATION BETWEEN STATE AND

20 TRIBAL OPT-OUT EXERCISES.—Any State limi21 tation under subparagraph (A) shall not apply 

22 to the acceptance by a licensee of bets or wa23 gers from persons located within the tribal 

24 lands of an Indian tribe that— 


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

2 subsection (b) (in which case the tribal 

3 opt-out exercise under such subsection 

4 shall apply); or 

5 ‘‘(ii) would be entitled pursuant to 

6 other applicable law to permit such bets or 

7 wagers to be initiated and received within 

8 its territory without use of the Internet. 

9 ‘‘(C) COORDINATION WITH INDIAN GAMING

10 REGULATORY ACT.—No decision by a State 

11 under this subsection shall be considered in 

12 making any determination with regard to the 

13 ability of an Indian tribe to offer any class of 

14 gambling activity pursuant to section 11 of the 

15 Indian Gaming Regulatory Act. 

16 ‘‘(2) CHANGES TO STATE LIMITATIONS.—The 

17 establishment, repeal, or amendment by any State of 

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

19 end of the 90-day period beginning on the date of 

20 the enactment of this subchapter shall apply, for 

21 purposes of this subchapter, beginning on the first 

22 January 1 that occurs after the end of the 60-day 

23 period beginning on the later of— 

24 ‘‘(A) the date a notice of such establish25 ment, repeal, or amendment is provided by the 


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1 Governor or other chief executive officer of such 

2 State in writing to the Secretary; or 

3 ‘‘(B) the effective date of such establish4 ment, 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 ex14 tent of such limitation, before the end of the 90-day 

15 period beginning on the date of the enactment of the 

16 Internet Gambling Regulation, Consumer Protection, 

17 and Enforcement Act, or in accordance with para18 graph (2), until such time as any notice of any 

19 amendment or repeal of such specific limitation be20 comes effective under paragraph (2). 

21 ‘‘(2) CHANGES TO INDIAN TRIBE LIMITA22 TIONS.—The establishment, repeal, or amendment 

23 by any Indian tribe of any limitation referred to in 

24 paragraph (1) after the end of the 90-day period be25 ginning on the date of the enactment of this subVerDate Nov 24 2008 04:51 May 07, 2009 Jkt 079200 PO 00000 Frm 00041 Fmt 6652 Sfmt 6201 E:\BILLS\H2267.IH H2267

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1 chapter shall apply, for purposes of this subchapter, 

2 beginning on the first January 1 that occurs after 

3 the end of the 60-day period beginning on the later 

4 of— 

5 ‘‘(A) the date a notice of such establish6 ment, repeal, or amendment is provided by the 

7 principal chief or other chief executive officer of 

8 such Indian tribe in writing to the Secretary; or 

9 ‘‘(B) the effective date of such establish10 ment, repeal, or amendment. 

11 ‘‘(c) NOTIFICATION AND ENFORCEMENT OF STATE

12 AND INDIAN TRIBE LIMITATIONS.— 

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

14 all licensees and applicants of all States and Indian 

15 tribes that have provided notice pursuant to para16 graph (1) or (2) of subsection (a) or (b), as the case 

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

18 no event fewer than 30 days before the effective date 

19 of such notice. 

20 ‘‘(2) COMPLIANCE.—The Secretary shall take 

21 effective measures to ensure that any licensee under 

22 this subchapter, as a condition of the license, com23 plies with any limitation or prohibition imposed by 

24 any State or Indian tribe to which the licensee is 


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1 subject under subsection (a) or (b), as the case may 

2 be. 

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

4 this subchapter for any licensee knowingly to accept 

5 bets or wagers initiated or otherwise made by per6 sons located within any State or in the tribal lands 

7 of any Indian tribe for which a notice is in effect 

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

9 ‘‘(4) STATE ATTORNEY GENERAL ENFORCE10 MENT.—In any case in which the attorney general of 

11 a State, or any State or local law enforcement agen12 cy authorized by the State attorney general or by 

13 State statute to prosecute violations of consumer 

14 protection law, has reason to believe that an interest 

15 of the residents of that State has been or is threat16 ened or adversely affected by a violation by a li17 censee pursuant to paragraph (2), the State, or the 

18 State or local law enforcement agency on behalf of 

19 the residents of the agency’s jurisdiction, may bring 

20 a civil action on behalf of the residents of that State 

21 or jurisdiction in a district court of the United 

22 States located therein, to— 

23 ‘‘(A) enjoin that practice; or 

24 ‘‘(B) enforce compliance with this sub25 chapter. 


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1 ‘‘§ 5387. Professional and Amateur Sports Protection 

2 Act prohibitions 

3 ‘‘No provision of this subchapter shall be construed 

4 as authorizing any licensee to operate an Internet gam5 bling facility that knowingly accepts bets or wagers on 

6 sporting events from persons located in the United States 

7 in violation of section 3702 of title 28, United States 

8 Code, except for fantasy or simulation sports games (as 

9 defined in section 5362 of this title). 

10 ‘‘§ 5388. Safe harbors 

11 ‘‘It shall be a complete defense against any prosecu12 tion or enforcement action under any Federal or State law 

13 against any person possessing a valid license under this 

14 subchapter that the activity is authorized under and has 

15 been carried out lawfully under the terms of this sub16 chapter. 

17 ‘‘§ 5389. Relation to section 1084 of title 18 and the 

18 Unlawful Internet Gambling Enforcement 

19 Act 

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

21 chapter shall not apply to any Internet bet or wager occur22 ring pursuant to a license issued by the Secretary under 

23 this subchapter. 

24 ‘‘§ 5390. Cheating and other fraud 

25 ‘‘(a) ELECTRONIC CHEATING DEVICES PROHIB26 ITED.—No person initiating, receiving, or otherwise makVerDate Nov 24 2008 04:51 May 07, 2009 Jkt 079200 PO 00000 Frm 00044 Fmt 6652 Sfmt 6201 E:\BILLS\H2267.IH H2267

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1 ing a bet or wager with a licensee, or sending, receiving, 

2 or inviting information assisting with a bet or wager with 

3 a licensee, knowingly shall use, or assist another in the 

4 use of, an electronic, electrical, or mechanical device which 

5 is designed, constructed, or programmed specifically for 

6 use in obtaining an advantage in any game authorized 

7 under this subchapter, where such advantage is prohibited 

8 or otherwise violates the rules of play established by the 

9 licensee. 

10 ‘‘(b) ADDITIONAL OFFENSE.—No person initiating, 

11 receiving, or otherwise making a bet or wager with a li12 censee, or sending, receiving, or inviting information as13 sisting with a bet or wager with a licensee, knowingly shall 

14 use or possess any cheating device with intent to cheat 

15 or defraud any licensee or other persons placing bets or 

16 wagers with such licensee. 

17 ‘‘(c) PERMANENT INJUNCTION.—Upon conviction of 

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

19 a permanent injunction enjoining such person from initi20 ating, receiving, or otherwise making bets or wagers or 

21 sending, receiving, or inviting information assisting in the 

22 placing of bets or wagers. 

23 ‘‘(d) CRIMINAL PENALTY.—Whoever violates sub24 section (a) or (b) of this section shall be fined under title 


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1 18 of the United States Code or imprisoned for not more 

2 than 5 years, or both.’’. 

3 (b) RULES OF CONSTRUCTION.— 

4 (1) TECHNICAL AND CONFORMING AMEND5 MENT.—Section 310(b)(2) of title 31, United States 

6 Code is amended— 

7 (A) by redesignating subparagraphs (J) 

8 and (K) as subparagraphs (K) and (L), respec9 tively; 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 sub15 chapters and sections for chapter 53 of title 31, United 

16 States Code, is amended by adding at the end the fol17 lowing: 

‘‘SUBCHAPTER V—REGULATION OF LAWFUL INTERNET GAMBLING

‘‘5381. Congressional findings and purpose. 

‘‘5382. Definitions. 

‘‘5383. Establishment and administration of licensing program. 

‘‘5384. Minimum requirements: Problem Gambling, Responsible Gambling, and 

Self-Exclusion Program. 

‘‘5385. Financial transaction providers. 

‘‘5386. Limitation of licenses in States and Indian lands. 

‘‘5387. Professional and Amateur Sports Protection Act prohibitions. 

‘‘5388. Safe harbors. 

‘‘5389. Relation to section 1084 of title 18 and the Unlawful Internet Gambling 

Enforcement Act. 

‘‘5390. Cheating and other fraud.’’. 


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1 SEC. 3. REPORT REQUIRED. 

2 (a) IN GENERAL.—Before the end of the 1-year pe3 riod beginning on the effective date of the regulations pre4 scribed under section 4(a), and annually thereafter, the 

5 Secretary shall submit a report to the Congress on the 

6 licensing and regulation of Internet gambling operators. 

7 (b) INFORMATION REQUIRED.—Each report sub8 mitted under subsection (a) shall include the following in9 formation: 

10 (1) A comprehensive statement regarding the 

11 prohibitions notified by the States and Indian tribes 

12 pursuant to section 5386 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 

19 actions undertaken during the period. 

20 (5) Any other information that may be useful 

21 to the Congress in evaluating the effectiveness of the 

22 Act in meeting its purpose, including the provision 

23 of protections against underage gambling, compul24 sive gambling, money laundering, and fraud, and in 

25 combating tax avoidance relating to Internet gam26 bling. 


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1 SEC. 4. EFFECTIVE DATE. 

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

3 shall prescribe such regulations as the Secretary may de4 termine to be appropriate to implement subchapter V of 

5 chapter 53 of title 31, United States Code (as added by 

6 section 2(a) of this Act) and shall publish such regulations 

7 in final form in the Federal Register before the end of 

8 the 180-day period beginning on the date of the enactment 

9 of this Act. 

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

11 by section 2(a) shall apply after the end of the 90-day 

12 period beginning on the date of the publication of the reg13 ulations in final form in accordance with subsection (a). 

Æ 


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