II 

111TH CONGRESS 

1ST SESSION S. 1597 

To amend title 31, United States Code, to provide for the licensing by 

the Secretary of the Treasury of Internet poker and other games that 

are predominantly of skill, to provide for consumer protections on the 

Internet, to enforce the tax code, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

AUGUST 6, 2009 

Mr. MENENDEZ introduced the following bill; which was read twice and 

referred to the Committee on Finance 

A BILL 

To amend title 31, United States Code, to provide for the 

licensing by the Secretary of the Treasury of Internet 

poker and other games that are predominantly of skill, 

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, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Internet Poker and Game of Skill Regulation, Consumer 

6 Protection, and Enforcement Act of 2009’’. 


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1 (b) TABLE OF CONTENTS.—The table of contents for 

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—REGULATION OF INTERNET GAMES OF SKILL 

FACILITIES 

Sec. 101. Findings. 

Sec. 102. Federal licensing requirement for operation of Internet games of skill 

facilities. 

Sec. 103. List of unlawful Internet gambling enterprises. 

Sec. 104. Regulations. 

Sec. 105. Annual report. 

Sec. 106. Conforming amendments. 

Sec. 107. Effective date. 

Sec. 108. Applicability. 

TITLE II—INTERNET GAMES OF SKILL TAX PROVISIONS 

Sec. 201. Amendment of 1986 code. 

Sec. 202. Tax on Internet games of skill; licensee information reporting. 

Sec. 203. Withholding for pari-mutuel pool winnings. 

Sec. 204. Withholding from certain gaming winnings. 

Sec. 205. Withholding of tax on nonresident aliens. 

Sec. 206. Information at source; pari-mutuel wagers. 

Sec. 207. Exemption from State and Indian tribal government taxation. 

Sec. 208. Territorial extent of wagering tax. 

TITLE III—STUDY AND PREVENTION OF PROBLEM AND 

PATHOLOGICAL GAMBLING 

Sec. 301. Authorization of programs for identification, prevention, and treatment of problem and pathological gambling. 

Sec. 302. Public awareness, research, and treatment. 

3 TITLE I—REGULATION OF 

4 INTERNET GAMES OF SKILL 

5 FACILITIES 

6 SEC. 101. FINDINGS. 

7 Congress makes the following findings: 

8 (1) In the United States, gambling and gaming 

9 activities, equipment, and operations have tradition10 ally been subject to various forms of Federal and 

11 State control, regulation, and enforcement, with 


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1 some form of gambling being permitted in nearly 

2 every State and by many Indian tribes. 

3 (2) The demarcation between games of chance 

4 and games of skill is not always clearly drawn, and 

5 the treatment and definition of ‘‘games of skill’’ has 

6 varied from jurisdiction to jurisdiction. 

7 (3) Millions of people in the United States 

8 enjoy competing with other players in poker, chess, 

9 bridge, mah-jong, backgammon, and similar games 

10 where the outcome turns predominantly on the skill 

11 of the participants. While each of these games con12 tains an element of chance, over any substantial in13 terval, a player’s ultimate success is determined by 

14 that player’s relative level of skill. 

15 (4) Poker, in particular, enjoys a long tradition 

16 in the United States. Poker is part of the cultural 

17 and recreational fabric of the United States and has 

18 been since the founding days of the United States. 

19 United States poker aficionados have included presi20 dents, judges, and statesmen throughout the history 

21 of the United States. 

22 (5) Since the development of the Internet, on23 line sites offering Internet gambling and similar 

24 games have raised numerous policy, consumer pro25 tection, and enforcement concerns for the Federal 


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1 and State governments as millions of United States 

2 persons have chosen to play online on sites offered 

3 by operators located in many different countries 

4 under a variety of licensing and regulatory regimes. 

5 (6) Bets and wagers made with respect to 

6 games in which success is predominantly determined 

7 by the skill of the players and in which the bets and 

8 wagers are between the participants can and should 

9 be treated as distinct from other bets and wagers 

10 made with respect to games in which success is not 

11 predominantly determined by the skill of the players 

12 or in which the wagers are not between the partici13 pants such as Internet wagering with off-shore sites 

14 on games of chance and betting on sporting events, 

15 all of which (with the exception of certain betting on 

16 horse racing) are barred by the laws of the United 

17 States. 

18 (7) The hosting by Internet operators of games 

19 predominantly determined by the skill of players and 

20 in which wagers can be made between the partici21 pants should be controlled by a strict Federal licens22 ing and regulatory framework— 

23 (A) to prevent underage wagering and oth24 erwise to protect vulnerable individuals; 

25 (B) to ensure the games are fair; 


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1 (C) to address the concerns of law enforce2 ment; and 

3 (D) to enforce limitations on the activity 

4 established by the States and Indian tribes. 

5 (8) An effective Federal licensing system would 

6 ensure that licenses are issued only to Internet oper7 ators who— 

8 (A) meet strict criteria to protect con9 sumers; 

10 (B) are in good financial and legal stand11 ing; 

12 (C) are of good character, honesty, and in13 tegrity; 

14 (D) utilize appropriate technology to pre15 vent those of insufficient age from partici16 pating; 

17 (E) adopt and implement systems to pro18 tect compulsive players; 

19 (F) have in place risk-based methods— 

20 (i) to identify and combat money 

21 laundering and fraud; and 

22 (ii) to protect the privacy and security 

23 of users; 

24 (G) adopt strict internal controls which are 

25 subject to audit; and 


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1 (H) adopt and implement systems to col2 lect and remit taxes due. 

3 (9) Effective regulation requires application of 

4 the regulatory provisions prescribed under sub5 chapter V of chapter 53 of title 31, United States 

6 Code, as added by section 102, to all persons seek7 ing a license to operate an Internet game-of-skill fa8 cility (as such term is defined in section 5381 of 

9 such subchapter), with each State and Indian tribe 

10 having the ability to prohibit operators of Internet 

11 game-of-skill facilities from accepting bets or wagers 

12 from persons located within the territory of the 

13 State or Indian tribe by opting out under section 

14 5385(a) of such subchapter, as so added. 

15 (10) Maintenance of a list of unlawful Internet 

16 gambling enterprises and the owners and operators 

17 of such enterprises will aid law enforcement efforts 

18 to prevent unlawful Internet gambling. 

19 (11) Longstanding Federal policy against gam20 bling on professional, scholastic, or amateur sporting 

21 events, and all criminal laws prohibiting such gam22 bling, should remain in full force and effect. 

23 (12) Licensing and regulating Internet game-of24 skill facilities (as such term is defined in section 

25 5381 of title 31, United States Code) in the United 


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1 States would provide additional tax revenues for the 

2 United States and would reduce tax avoidance. 

3 SEC. 102. FEDERAL LICENSING REQUIREMENT FOR OPER4 ATION OF INTERNET GAME-OF-SKILL FACILI5 TIES. 

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 INTERNET 

10 GAME-OF-SKILL FACILITIES 

11 ‘‘§ 5381. Definitions 

12 ‘‘In this subchapter: 

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

14 any person who has applied for a license pursuant 

15 to this subchapter. 

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

17 has the meaning given the term in section 5362. 

18 ‘‘(3) INDIAN LANDS AND INDIAN TRIBE.—The 

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

20 meaning given such terms in section 4 of the Indian 

21 Gaming Regulatory Act (25 U.S.C. 2703). 

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

23 same meaning given the term in section 5362. 

24 ‘‘(5) INTERNET GAME OF SKILL.—The term 

25 ‘Internet game of skill’ means an Internet-based 


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1 game in which success is predominantly determined 

2 by the skill of the players, including poker, chess, 

3 bridge, mah-jong, and backgammon. 

4 ‘‘(6) INTERNET GAME-OF-SKILL FACILITY.— 

5 The term ‘Internet game-of-skill facility’ means an 

6 Internet site through which a bet or wager is initi7 ated, received, or otherwise made with respect to an 

8 Internet game of skill, whether transmitted by tele9 phone, Internet, satellite, or other wire or wireless 

10 communication medium. 

11 ‘‘(7) LICENSEE.—The term ‘licensee’ means a 

12 person who operates an Internet game-of-skill facil13 ity under a license issued by the Secretary under 

14 this subchapter. 

15 ‘‘(8) OPERATE AN INTERNET GAME-OF-SKILL

16 FACILITY.—The term ‘operate an Internet game-of17 skill facility’ means to direct, manage, supervise, or 

18 control an Internet game-of-skill facility. 

19 ‘‘(9) POKER.—The term ‘poker’ means any of 

20 several card games— 

21 ‘‘(A) that are commonly referred to as 

22 ‘poker’; 

23 ‘‘(B) that are played by 2 or more people 

24 who bet or wager on cards dealt to them; 


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1 ‘‘(C) in which players compete against 

2 each other and not against the person operating 

3 the game; and 

4 ‘‘(D) in which the person operating the 

5 game may assess a commission fee or any other 

6 type of fee. 

7 ‘‘(10) SECRETARY.—The term ‘Secretary’ 

8 means the Secretary of the Treasury. 

9 ‘‘(11) SPORTING EVENT.—The term ‘sporting 

10 event’ means any athletic competition, whether pro11 fessional, scholastic, or amateur, except that such 

12 term does not include any activity described in sec13 tion 3704(a)(4) of title 28. 

14 ‘‘(12) STATE.—The term ‘State’ means any 

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

16 or any commonwealth, territory, or other possession 

17 of the United States. 

18 ‘‘§ 5382. Establishment and administration of licens19 ing program 

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

21 shall have responsibility for the following activities: 

22 ‘‘(1) Exercising full regulatory jurisdiction 

23 over— 

24 ‘‘(A) the operation of Internet game-of25 skill facilities by licensees; and 


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

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

3 necessary to administer and enforce the require4 ments of this subchapter. 

5 ‘‘(3) Employing enforcement agents with suffi6 cient training and experience to administer the re7 quirements of this subchapter and the regulations 

8 prescribed under this subchapter. 

9 ‘‘(b) INTERNET GAME-OF-SKILL FACILITY LICENS10 ING PROGRAM.— 

11 ‘‘(1) LICENSE REQUIRED.—It shall be unlawful 

12 for a person to operate an Internet game-of-skill fa13 cility in interstate or foreign commerce, in which 

14 bets or wagers are knowingly initiated, received, or 

15 otherwise made by individuals located in the United 

16 States, without a license issued to such person by 

17 the Secretary under this subchapter. 

18 ‘‘(2) AUTHORITY UNDER VALID LICENSE.—Not19 withstanding any other provision of law and subject 

20 to the provisions of this subchapter, a licensee may 

21 accept a bet or wager with respect to an Internet 

22 game of skill from an individual located in the 

23 United States and offer related services. 

24 ‘‘(3) INTERSTATE OFF-TRACK WAGERS.—Not25 withstanding anything in this subchapter to the conVerDate Nov 24 2008 20:26 Sep 02, 2009 Jkt 079200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1597.IS S1597

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1 trary, a person may accept interstate off-track wa2 gers (as defined by section 3 of the Interstate 

3 Horseracing Act of 1978 (15 U.S.C. 3002)), wheth4 er by telephone, Internet, satellite, or other wire or 

5 wireless communication without need for a license 

6 issued pursuant to this subchapter. 

7 ‘‘(c) APPLICATION FOR LICENSE.— 

8 ‘‘(1) APPLICATION.—A person seeking a license 

9 to operate an Internet game-of-skill facility in inter10 state or foreign commerce shall submit to the Sec11 retary an application therefor in such form and in 

12 such manner as the Secretary considers appropriate. 

13 ‘‘(2) ELEMENTS.—Each application submitted 

14 under paragraph (1) shall include such information 

15 as the Secretary considers appropriate, including the 

16 following: 

17 ‘‘(A) Complete financial information about 

18 the applicant. 

19 ‘‘(B) Documentation showing the corporate 

20 structure of the applicant and all related busi21 nesses and affiliates. 

22 ‘‘(C) The criminal and credit history of— 

23 ‘‘(i) the applicant; 

24 ‘‘(ii) each of the senior executives and 

25 directors of the applicant; and 


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1 ‘‘(iii) any other person who is in con2 trol of the applicant. 

3 ‘‘(D) A detailed description of the appli4 cant’s plan for complying with all applicable 

5 regulations prescribed under this subchapter, 

6 with particular emphasis on the applicant’s 

7 ability— 

8 ‘‘(i) to prevent underage play; 

9 ‘‘(ii) to protect compulsive players; 

10 ‘‘(iii) to ensure the Internet games of 

11 skill are being operated fairly; and 

12 ‘‘(iv) to comply with and address any 

13 additional concerns identified by the Sec14 retary. 

15 ‘‘(E) A certification by the applicant that 

16 the applicant agrees to be subject to United 

17 States jurisdiction and all applicable United 

18 States laws relating to the operation of an 

19 Internet game-of-skill facility and associated ac20 tivities. 

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.— 

8 ‘‘(i) IN GENERAL.—If an applicant is 

9 a corporation, partnership, or other busi10 ness entity, a background check and inves11 tigation shall occur with respect to the 

12 president or other chief executive of the 

13 corporation, partnership, or other business 

14 entity and other partners or senior execu15 tives and directors of the corporation, part16 nership, or entity, as determined appro17 priate by the Secretary, in the Secretary’s 

18 sole discretion. 

19 ‘‘(ii) MINIMUM DETERMINATION.—In 

20 carrying out clause (i), the Secretary shall, 

21 as a minimum, carry out a background 

22 check and investigation of the 5 individuals 

23 receiving the most compensation from the 

24 applicant. 


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1 ‘‘(2) SUITABILITY FOR LICENSING STAND2 ARDS.—For purposes of this subchapter, an appli3 cant and any other person associated with the appli4 cant, as applicable, is suitable for licensing if the ap5 plicant demonstrates to the Secretary by clear and 

6 convincing evidence that the applicant (or individual 

7 associated with the applicant, as applicable)— 

8 ‘‘(A) is a person of good character, hon9 esty, and integrity; 

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

11 reputation, habits, and associations do not— 

12 ‘‘(i) pose a threat to the public inter13 est or to the effective regulation and con14 trol of Internet game-of-skill facilities; or 

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

16 unsuitable, unfair, or illegal practices, 

17 methods, and activities in the conduct of 

18 Internet game-of-skill facilities or the car19 rying on of the business and financial ar20 rangements incidental there to such facili21 ties; 

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

23 activities for which the applicant is licensed in 

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1 chapter and any regulations prescribed under 

2 this subchapter; 

3 ‘‘(D) has or guarantees acquisition of ade4 quate business competence and experience in 

5 the operation of Internet game-of-skill facilities; 

6 and 

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

8 for the nature of the proposed operation and 

9 from a suitable source. 

10 ‘‘(3) UNSUITABLE FOR LICENSING.—An appli11 cant or any other person may not be determined to 

12 be suitable for licensing within the meaning of this 

13 subchapter if the applicant or such person— 

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

15 documentation material to a determination of 

16 suitability for licensing under paragraph (1); 

17 ‘‘(B) has supplied information which is un18 true or misleading as to a material fact per19 taining to any such determination; 

20 ‘‘(C) has been convicted of an offense pun21 ishable by imprisonment of more than 1 year; 

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

23 Federal or State tax return or in the payment 

24 of any applicable tax, penalty, addition to tax, 

25 or interest owed to a jurisdiction in which the 


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1 applicant or other person operates or does busi2 ness; 

3 ‘‘(E) knowingly accepts or knowingly has 

4 accepted bets or wagers on sporting events from 

5 persons located in the United States in violation 

6 of applicable Federal or State law; or 

7 ‘‘(F) has not agreed in writing to submit 

8 to personal jurisdiction in the United States for 

9 purposes of any matter arising from the oper10 ation of an Internet game-of-skill facility or as11 sociated activities. 

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

13 any other person who is required to be determined 

14 to be suitable for licensing in connection with such 

15 licensee) shall meet the standards necessary to be 

16 suitable for licensing throughout the term of the li17 cense. 

18 ‘‘(5) BACKGROUND CHECK AND INVESTIGA19 TION.—The Secretary shall establish standards and 

20 procedures for conducting background checks and 

21 investigations for purposes of this subsection. 

22 ‘‘(6) PROTECTION OF THE PUBLIC TRUST.— 

23 The Secretary may take such action as is necessary 

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1 sure that the operation of an Internet game-of-skill 

2 facility licensed under this subchapter is controlled 

3 only by persons who are suitable for licensing. 

4 ‘‘(7) ENFORCEMENT ACTIONS.— 

5 ‘‘(A) DETERMINATION OF UNSUITABILITY

6 FOR CONTINUED LICENSURE.—If the Secretary 

7 finds that an individual owner or holder of a 

8 controlling or substantial interest in a licensee, 

9 or of a holding, parent, or intermediary com10 pany of a licensee, or a director, partner, or of11 ficer of a licensee is not suitable for licensing, 

12 the Secretary may determine that the licensee is 

13 not qualified to continue as a licensee. 

14 ‘‘(B) ACTION TO PROTECT THE PUBLIC IN15 TEREST, INCLUDING SUSPENSION.—If the Sec16 retary determines that a licensee is not quali17 fied to continue as a licensee, the Secretary 

18 shall propose action the Secretary considers 

19 necessary to protect the public interest, includ20 ing, if the Secretary considers necessary, the 

21 suspension of the licensee. 

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

24 determination under subparagraph (A), the 

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1 gaging in licensed activities by imposing condi2 tions on the licensee under penalty of revocation 

3 or suspension of a license, including— 

4 ‘‘(i) the identification of any person 

5 determined to be unsuitable for licensing; 

6 and 

7 ‘‘(ii) the establishment of appropriate 

8 safeguards to ensure such person is ex9 cluded from any management or involve10 ment in operation of 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 ex17 amination of a licensee to ensure compliance 

18 with the terms of the license and this sub19 chapter, shall be assessed by the Secretary 

20 against the licensee institution by written notice 

21 in an amount limited to that necessary to meet 

22 the Secretary’s expenses in carrying out such 

23 administration, review, or examination to the 

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1 istrative expenses that are not directly attrib2 utable to that licensee. 

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

4 the Secretary as user fees under subparagraph 

5 (A) shall— 

6 ‘‘(i) be maintained by the Secretary 

7 solely for use in accordance with clause 

8 (ii); 

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

10 cover expenses incurred by the Secretary in 

11 carrying out this subchapter; and 

12 ‘‘(iii) not be construed to be Govern13 ment funds or appropriated monies, or 

14 subject to apportionment for the purposes 

15 of chapter 15 or any other authority. 

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

17 whom an assessment is assessed under this 

18 paragraph shall be afforded an agency hearing 

19 if such person submits a request for such hear20 ing within 20 days after the issuance of the no21 tice of assessment. 

22 ‘‘(D) COLLECTION.— 

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

24 to pay an assessment under this paragraph 

25 after the assessment has become final, the 


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1 Secretary may recover the amount assessed 

2 by action in the appropriate United States 

3 district court, along with any costs of col4 lection and attorney fees. 

5 ‘‘(ii) ASSESSMENT REVIEWABLE.—In 

6 any civil action under clause (i), a court 

7 may review the validity and adjust the 

8 amount of the assessment. 

9 ‘‘(2) DIRECT AND EXCLUSIVE OBLIGATION OF

10 LICENSEE.—The user fee shall be the direct and ex11 clusive obligation of the licensee and may not be de12 ducted from amounts available as deposits to any 

13 person placing a bet. 

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

15 grant licenses under this subchapter if the applicant meets 

16 the criteria established by the Secretary under this sub17 chapter. 

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

19 person shall receive or retain a license under this section 

20 unless the person maintains or requires mechanisms so 

21 that the following requirements, and the standards estab22 lished under section 5383, are met with respect to any 

23 Internet bet or wager: 


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1 ‘‘(1) AGE.—Appropriate safeguards reasonably 

2 calculated to ensure that the individual placing a bet 

3 or wager is not less than 21 years of age. 

4 ‘‘(2) LOCATION.—Appropriate safeguards rea5 sonably calculated to ensure that the individual plac6 ing a bet or wager is physically located in a jurisdic7 tion that has not prohibited such bets or wagers 

8 pursuant to section 5385 at the time the bet or 

9 wager is placed. 

10 ‘‘(3) COLLECTION OR REPORTING OF CUS11 TOMER TAXES.—Appropriate mechanisms reasonably 

12 calculated to ensure that all taxes relating to Inter13 net games of skill from persons engaged in bets or 

14 wagers relating to such games are collected or re15 ported, as required by law, at the time of any pay16 ment of proceeds of such bets or wagers. 

17 ‘‘(4) COLLECTION OR REPORTING OF TAXES OF

18 LICENSEE.—Appropriate mechanisms reasonably 

19 calculated to ensure that all taxes relating to the op20 eration of an Internet game-of-skill facility from any 

21 licensee are collected and disbursed as required by 

22 law and that adequate records to enable later audit 

23 or verification are maintained. 

24 ‘‘(5) SAFEGUARDS AGAINST FINANCIAL

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1 culated to prevent fraud, money laundering, and ter2 rorist finance. 

3 ‘‘(6) SAFEGUARDS AGAINST COMPULSIVE

4 PLAY.—Appropriate safeguards reasonably cal5 culated to prevent compulsive betting or wagering. 

6 ‘‘(7) PRIVACY SAFEGUARDS.—Appropriate safe7 guards reasonably calculated to protect the privacy 

8 and security of any person engaged in bets or wa9 gers relating to Internet games of skill, including 

10 customers of the licensee. 

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

12 mechanisms reasonably calculated to ensure that any 

13 assessment under subsection (e) is paid to the Sec14 retary. 

15 ‘‘(9) OTHER REQUIREMENTS.—Such other re16 quirements as the Secretary may establish by regula17 tion or order for purposes of this subchapter. 

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

19 ‘‘(1) TERM.—Any license issued under this sec20 tion shall be issued for a 5-year term beginning on 

21 the date of issuance. 

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

23 accordance with requirements prescribed by the Sec24 retary under this subchapter. 

25 ‘‘(i) REVOCATION OR DENIAL 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 within the meaning of this subchapter. 

8 ‘‘(2) FINAL ACTION.—Any revocation or denial 

9 of a license under paragraph (1) shall be treated as 

10 a final action by the Secretary. 

11 ‘‘(j) ADMINISTRATIVE PROVISIONS.— 

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

13 Secretary shall have the authority to engage in the 

14 following: 

15 ‘‘(A) Investigate the suitability of each ap16 plicant to ensure compliance with this sub17 chapter and regulations prescribed under this 

18 subchapter. 

19 ‘‘(B) Require licensees to maintain appro20 priate procedures to ensure compliance with 

21 this subchapter and regulations prescribed 

22 under this subchapter. 

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

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1 ments imposed by the Secretary under this sub2 chapter. 

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

4 be necessary, summon a licensee or an appli5 cant for a license, an officer or employee of a 

6 licensee or any such applicant (including a 

7 former officer or employee), or any person hav8 ing possession, custody, or care of the reports 

9 and records required by the Secretary under 

10 this subchapter, to appear before the Secretary 

11 at a time and place named in the summons and 

12 to produce such books, papers, records, or other 

13 data, and to give testimony, under oath, as may 

14 be relevant or material to any investigation in 

15 connection with the enforcement of this sub16 chapter or any application for a license under 

17 this subchapter. 

18 ‘‘(E) Investigate any violation of this sub19 chapter, any regulation under this subchapter, 

20 and any other violation of law relating to the 

21 operation of an Internet game-of-skill facility. 

22 ‘‘(F) Conduct continuing reviews of appli23 cants and licensees and the operation of Inter24 net game-of-skill facilities by use of techno25 logical means, on-site observation of facilities, 


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1 including servers, or other reasonable means to 

2 assure compliance with this subchapter and any 

3 regulations under this subchapter. 

4 ‘‘(2) ADMINISTRATIVE ASPECTS OF SUM5 MONS.— 

6 ‘‘(A) PRODUCTION AT DESIGNATED

7 SITE.—A summons issued pursuant to this sub8 section may require that books, papers, records, 

9 or other data stored or maintained at any place 

10 be produced— 

11 ‘‘(i) at any business location of a li12 censee or applicant for a license; 

13 ‘‘(ii) if the licensee or applicant has 

14 been deemed suitable by or is seeking a de15 termination of suitability from a State or 

16 tribal regulatory authority, at any des17 ignated location in that State or tribal 

18 land; or 

19 ‘‘(iii) if the licensee or applicant has 

20 been deemed suitable or is seeking a deter21 mination of suitability from the Secretary, 

22 at any designated location in the District 

23 of Columbia. 

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

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1 pense incurred in connection with the produc2 tion of books, papers, records, or other data 

3 under this subsection. 

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

5 summons issued under this subsection may be 

6 by registered mail or in such other manner cal7 culated to give actual notice as the Secretary 

8 may prescribe by regulation. 

9 ‘‘(3) CONTUMACY OR REFUSAL.— 

10 ‘‘(A) REFERRAL TO ATTORNEY GEN11 ERAL.—In case of contumacy by a person 

12 issued a summons under this subsection or a 

13 refusal by such person to obey such summons 

14 or to allow the Secretary to conduct an exam15 ination, the Secretary shall refer the matter to 

16 the Attorney General. 

17 ‘‘(B) JURISDICTION OF COURT.—The At18 torney General may invoke the aid of any court 

19 of the United States to compel compliance with 

20 the summons within the jurisdiction of which— 

21 ‘‘(i) the investigation which gave rise 

22 to the summons or the examination is 

23 being or has been carried on; 

24 ‘‘(ii) the person summoned is an in25 habitant; or 


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1 ‘‘(iii) the person summoned carries on 

2 business or may be found. 

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

4 an order requiring the person summoned to ap5 pear before the Secretary or a delegate of the 

6 Secretary— 

7 ‘‘(i) to produce books, papers, records, 

8 and other data; 

9 ‘‘(ii) to give testimony as may be nec10 essary to explain how such material was 

11 compiled and maintained; 

12 ‘‘(iii) to allow the Secretary to exam13 ine the business of a licensee; and 

14 ‘‘(iv) to pay the costs of the pro15 ceeding. 

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

17 Any failure to obey the order of the court may 

18 be punished by the court as a contempt thereof. 

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

20 in any case under this subsection may be served 

21 in any judicial district in which such person 

22 may be found. 

23 ‘‘(k) CIVIL MONEY PENALTIES.— 

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

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1 quirements of this subchapter for any willful viola2 tion of this subchapter or any regulation prescribed 

3 or order issued under this subchapter a civil penalty 

4 of not more than the greater of— 

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

6 involved in the violation, if any; or 

7 ‘‘(B) $25,000. 

8 ‘‘(2) ASSESSMENT.— 

9 ‘‘(A) WRITTEN NOTICE.—Any penalty im10 posed under paragraph (1) may be assessed and 

11 collected by the Secretary by written notice. 

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

13 respect to any assessment under paragraph (1), 

14 a hearing is not requested pursuant to subpara15 graph (E) within the period of time allowed 

16 under such subparagraph, the assessment shall 

17 constitute a final agency order. 

18 ‘‘(C) AUTHORITY TO MODIFY OR REMIT

19 PENALTY.—The Secretary may compromise, 

20 modify, or remit any penalty which the Sec21 retary may assess or has already assessed 

22 under paragraph (1). 

23 ‘‘(D) MITIGATING FACTORS.—In deter24 mining the amount of any penalty imposed 

25 under paragraph (1), the Secretary shall take 


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1 into account the appropriateness of the penalty 

2 with respect to— 

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

4 and the good faith of the person against 

5 whom the penalty is assessed; 

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

7 ‘‘(iii) the history of previous viola8 tions; and 

9 ‘‘(iv) such other matters as justice 

10 may require. 

11 ‘‘(E) HEARING.—The person against 

12 whom any penalty is assessed under paragraph 

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

14 person submits a request for such hearing not 

15 later than 20 days after the issuance of the no16 tice of assessment. 

17 ‘‘(F) COLLECTION.— 

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

19 to pay an assessment after any penalty as20 sessed under this paragraph has become 

21 final, the Secretary shall recover the 

22 amount assessed by action in the appro23 priate United States district court. 

24 ‘‘(ii) SCOPE OF REVIEW.—In any civil 

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1 propriateness of the penalty shall be sub2 ject to review for abuse of agency discre3 tion. 

4 ‘‘(G) DISBURSEMENT.—All penalties col5 lected under authority of this subsection shall 

6 be deposited into the Treasury. 

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

8 a licensee of any civil penalty assessed under this 

9 subsection that has become final shall be a require10 ment for the retention of its license. 

11 ‘‘(l) TREATMENT OF RECORDS.—In light of business 

12 competition, confidentiality and privacy concerns, the Sec13 retary shall protect from disclosure information submitted 

14 in support of a license application under this subchapter 

15 and information collected in the course of regulating li16 censees to the full extent permitted by sections 552 and 

17 552a of title 5. 

18 ‘‘(m) SUITABILITY REQUIRED FOR CERTAIN SERV19 ICE PROVIDERS.—Any person that knowingly manages, 

20 administers, or controls bets or wagers that are initiated, 

21 received, or otherwise made within the United States or 

22 that manages, administers, or controls the games with 

23 which such bets or wagers are associated shall meet all 

24 of the suitability for licensing criteria established under 

25 this section in the same manner and to the same extent 


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1 as if that person itself were a licensee. Any failure on the 

2 part of such person to remain suitable for licensing may 

3 be grounds for revocation of the license of the licensee for 

4 whom such service is provided, in the same manner and 

5 in accordance with subsection (i). 

6 ‘‘(n) RELIANCE ON STATE AND TRIBAL REGU7 LATORY BODY CERTIFICATIONS OF SUITABILITY FOR AP8 PLICANTS.— 

9 ‘‘(1) QUALIFICATION OF STATE AND TRIBAL

10 REGULATORY BODIES.— 

11 ‘‘(A) APPLICATION FOR DETERMINA12 TION.—Any State agency that regulates gam13 bling that would be classified as class III gam14 ing under section 4 of the Indian Gaming Reg15 ulatory Act (25 U.S.C. 2703), or a tribal regu16 latory body that regulates class III gaming, 

17 may— 

18 ‘‘(i) notify the Secretary of its willing19 ness to review prospective applicants to 

20 certify whether any such applicant meets 

21 the qualifications set forth by this sub22 chapter; and 

23 ‘‘(ii) provide the Secretary with such 

24 documentation as the Secretary determines 

25 necessary for the Secretary to determine 


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1 whether such State or tribal regulatory 

2 body— 

3 ‘‘(I) is qualified to conduct such 

4 review; and 

5 ‘‘(II) may be relied upon by the 

6 Secretary to make any such certifi7 cation. 

8 ‘‘(B) DETERMINATION AND NOTICE.—Not 

9 later than 60 days after receiving a notice by 

10 a State agency or a tribal regulatory body 

11 under subparagraph (A)(i), the Secretary 

12 shall— 

13 ‘‘(i) make a determination as to 

14 whether such State or tribal regulatory 

15 body— 

16 ‘‘(I) is qualified to conduct a re17 view of prospective applicants; and 

18 ‘‘(II) may be relied upon to cer19 tify whether any such applicant meets 

20 the qualifications established under 

21 this subchapter; and 

22 ‘‘(ii) notify such State or tribal regu23 latory body of such determination. 

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

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1 fication under paragraph (1)(B) is in effect with re2 spect to any such State or tribal regulatory body, 

3 the State or tribal regulatory body— 

4 ‘‘(A) may undertake reviews of any appli5 cant to determine whether it meets the criteria 

6 for suitability for licensing established under 

7 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.—An applicant may provide a certification 

19 of suitability made by a State or tribal regulatory 

20 body under paragraph (2), together with all docu21 mentation the applicant has submitted to such State 

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

23 certification and documentation shall be relied on by 

24 the Secretary as evidence that the applicant has met 

25 the suitability requirements under this section. 


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

2 Notwithstanding any certification of suitability made 

3 by a State or tribal regulatory body, the Secretary 

4 retains the authority to review, withhold, or revoke 

5 a license if the Secretary has reason to believe that 

6 an applicant or licensee does not meet the suitability 

7 requirements established under this section or any 

8 other requirement of a licensee. 

9 ‘‘(5) RELIANCE ON QUALIFIED REGULATORY

10 BODY FOR OTHER PURPOSES.—At the discretion of 

11 the Secretary, the Secretary may rely on a State and 

12 tribal regulatory body found qualified under this 

13 subsection for such other regulatory and enforce14 ment activities as the Secretary finds to be useful 

15 and appropriate to carry out the purposes of this 

16 subchapter. 

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

18 Secretary may revoke, at any time and for any rea19 son, the qualification of a State or tribal regulatory 

20 body to certify or to conduct any other regulatory or 

21 enforcement activity to carry out the purposes of 

22 this subchapter. 

23 ‘‘(7) LIMITATION.—The Secretary may not rely 

24 upon a State or tribal regulatory body for purposes 

25 of this subchapter unless the Secretary determines 


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1 that the regulations and procedures of such State or 

2 tribal regulatory body for the review of an appli3 cant’s suitability for a license under this subchapter 

4 are no less stringent than the regulations and proce5 dures established by the Secretary for such purpose. 

6 ‘‘§ 5383. Compulsive Gaming, Responsible Gaming, 

7 and Self-Exclusion Program 

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

9 any State or tribal regulatory body that has been qualified 

10 under section 5382(n) shall prescribe regulations for the 

11 development of a Compulsive Gaming, Responsible Gam12 ing, and Self-Exclusion Program on the basis of standards 

13 that each licensee shall implement as a condition of licen14 sure. 

15 ‘‘(b) MINIMUM REQUIREMENTS.—An application for 

16 a license shall include a submission to the Secretary, quali17 fied State, or tribal regulatory body setting forth a com18 prehensive program that is reasonably calculated— 

19 ‘‘(1) to verify the identity and age of each cus20 tomer; 

21 ‘‘(2) to ensure that no customers under the age 

22 of 21 may initiate or otherwise make any bets or wa23 gers; 


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•S 1597 IS

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

2 the customer is located at the time the customer at3 tempts to initiate a bet or wager; 

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

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

6 section 5385 can initiate or otherwise make a bet or 

7 wager prohibited by such opt-out; 

8 ‘‘(5) to ensure that responsible gaming mate9 rials are made available to customers upon request; 

10 ‘‘(6) to make available individualized respon11 sible gaming options that any customer may choose, 

12 including stake limit, loss limit, deposit limit, and 

13 session time limit option, and other similar options 

14 that the Secretary or qualified State or tribal regu15 latory body may deem appropriate and require to be 

16 made available; 

17 ‘‘(7) to prevent persons on the list of self-ex18 cluded persons established pursuant to subsection 

19 (c) from initiating any bets or wagers; 

20 ‘‘(8) to protect the privacy and security of any 

21 customer in connection with any lawful activity re22 lating to the operation of an Internet game-of-skill 

23 facility; and 


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1 ‘‘(9) to protect against fraud and money laun2 dering relating to the operation of an Internet game3 of-skill facility. 

4 ‘‘(c) LIST OF PERSONS SELF-EXCLUDED FROM GAM5 ING ACTIVITIES.— 

6 ‘‘(1) ESTABLISHMENT.— 

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

8 provide by regulation for the establishment of a 

9 list of persons self-excluded from gaming activi10 ties at all licensee sites. 

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

12 may request placement on the list of self-ex13 cluded persons by— 

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

15 established by the Secretary that the per16 son wishes to be denied gaming privileges; 

17 and 

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

19 of voluntary exclusion, the person may not 

20 collect any winnings or recover any losses 

21 resulting from any gaming activity at any 

22 licensee sites. 

23 ‘‘(2) PLACEMENT AND REMOVAL PROCE24 DURES.—The regulations of the Secretary under 

25 paragraph (1)(A) shall establish procedures for 


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1 placements on, and removals from, the list of self2 excluded persons. 

3 ‘‘(3) LIMITATION ON LIABILITY.— 

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

5 the Secretary, an enforcement agent, and a li6 censee, and any employee or agent thereof, shall 

7 not be liable to any self-excluded person or to 

8 any other party in any judicial or administra9 tive proceeding for any harm, monetary or oth10 erwise, which may arise as a result of— 

11 ‘‘(i) any failure to withhold gaming 

12 privileges from, or to restore gaming privi13 leges to, a self-excluded person; or 

14 ‘‘(ii) otherwise permitting a self-ex15 cluded person to engage in gaming activity 

16 while on the list of self-excluded persons. 

17 ‘‘(B) RULE OF CONSTRUCTION.—No provi18 sion of subparagraph (A) shall be construed as 

19 preventing the Secretary from assessing any 

20 regulatory sanction against a licensee for failing 

21 to comply with the minimum standards pre22 scribed pursuant to this subsection. 

23 ‘‘(4) DISCLOSURE PROVISIONS.— 

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

25 other provision of Federal or State law, the list 


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1 of self-excluded persons shall not be open to 

2 public inspection. 

3 ‘‘(B) AFFILIATE DISCLOSURE.—Any li4 censees may disclose the identities of persons on 

5 the self excluded list to any affiliated company 

6 or, where required to comply with this sub7 section, service provider, to the extent that the 

8 affiliated company or service provider maintains 

9 such information under confidentiality provi10 sions comparable to those in this subsection. 

11 ‘‘(5) LIMITATION ON LIABILITY FOR DISCLO12 SURE.—A licensee and an employee, agent, or affil13 iate of a licensee shall not be liable to any self-ex14 cluded person or to any other party in any judicial 

15 proceeding for any harm, monetary or otherwise, 

16 which may arise as a result of disclosure or publica17 tion in any manner. 

18 ‘‘(d) GAMING BY PROHIBITED PERSONS.— 

19 ‘‘(1) PROHIBITION BENEFITTING FROM PRO20 HIBITED GAMING ACTIVITY.—A person who is pro21 hibited from gaming with a licensee by law, or by 

22 order of the Secretary or any court of competent ju23 risdiction, including any person on the self-exclusion 

24 list in accordance with subsection (c), shall not col25 lect, in any manner or proceeding, any winnings or 


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1 recover any losses arising as a result of any prohib2 ited gaming 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 wa7 gers made by a prohibited person shall be subject to 

8 forfeiture by order of the Secretary, following notice 

9 to the prohibited person and opportunity to be 

10 heard. 

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

12 funds forfeited pursuant to this subsection shall be 

13 deposited into the Treasury. 

14 ‘‘(e) COMPULSIVE PLAYERS NOT ON THE LIST OF

15 SELF-EXCLUDED PERSONS.— 

16 ‘‘(1) PUBLIC AWARENESS PROGRAM.— 

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

18 any State or tribal regulatory body that has 

19 been qualified under section 5382(n) shall pro20 vide by regulation for the establishment of a 

21 program to alert the public to the existence, 

22 consequences, and availability of the self-exclu23 sion list, and shall prepare and promulgate 

24 written materials to be used in such a program. 


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

2 Regulations prescribed under subparagraph (A) 

3 may require a licensee to make available lit4 erature or screen displays relating to the exist5 ence of the program. 

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

7 of this subsection shall be construed as creating a 

8 legal duty in the Secretary, a qualified State or trib9 al regulatory body, a licensee, or any representative 

10 of a licensee to identify or to exclude compulsive 

11 players not on the list of self-excluded persons. 

12 ‘‘(3) IMMUNITY.—The United States, the Sec13 retary, a qualified State or tribal regulatory body, a 

14 licensee, and any employee or agent thereof, shall 

15 not be liable to any person in any proceeding for 

16 losses or other damages of any kind arising out of 

17 that person’s gaming activities based on a claim that 

18 the person was a compulsive, problem, or patholog19 ical player. 

20 ‘‘§ 5384. Financial transaction providers 

21 ‘‘(a) IN GENERAL.—No financial transaction pro22 vider shall be held liable for engaging in financial activities 

23 or transactions, including payments processing activities, 

24 in connection with any bets or wagers permitted by this 

25 subchapter or the Interstate Horseracing Act of 1978 (15 


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1 U.S.C. 3001 et seq.) unless such financial transaction pro2 vider has knowledge or reason to know that the specific 

3 financial activities or transactions are conducted in viola4 tion of this subchapter, the Interstate Horseracing Act, 

5 or other applicable provision of Federal or State law. 

6 ‘‘(b) DEFINITIONS.—In this section: 

7 ‘‘(1) FINANCIAL TRANSACTION PROVIDER.— 

8 The term ‘financial transaction provider’ means a 

9 creditor, credit card issuer, financial institution, op10 erator of a terminal at which an electronic fund 

11 transfer may be initiated, money transmitting busi12 ness, or international, national, regional, or local 

13 payment network utilized to effect a credit trans14 action, electronic fund transfer, stored value product 

15 transaction, or money transmitting service, or a par16 ticipant in such network, or other participant in a 

17 payment system. 

18 ‘‘(2) OTHER TERMS.— 

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

20 AND CARD ISSUER.—The terms ‘credit’, ‘cred21 itor’, ‘credit card’, and ‘card issuer’ have the 

22 meanings given the terms in section 103 of the 

23 Truth in Lending Act (15 U.S.C. 1602). 

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

25 term ‘electronic fund transfer’— 


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

2 in section 903 of the Electronic Fund 

3 Transfer Act (15 U.S.C. 1693a), except 

4 that the term includes transfers that would 

5 otherwise be excluded under section 

6 903(6)(E) of such Act; and 

7 ‘‘(ii) includes any fund transfer cov8 ered by Article 4A of the Uniform Com9 mercial Code, as in effect in any State. 

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

11 ‘financial institution’ has the meaning given the 

12 term in section 903 of the Electronic Fund 

13 Transfer Act (15 U.S.C. 1963a), except that 

14 such term does not include a casino, sports 

15 book, or other business at or through which 

16 bets or wagers may be placed or received. 

17 ‘‘(D) INSURED DEPOSITORY INSTITU18 TION.—The term ‘insured depository institu19 tion’— 

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

21 in section 3(c) of the Federal Deposit In22 surance Act (12 U.S.C. 1813(c)); and 

23 ‘‘(ii) includes an insured credit union 

24 (as defined in section 101 of the Federal 

25 Credit Union Act (12 U.S.C. 1752)). 


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1 ‘‘(E) MONEY TRANSMITTING BUSINESS

2 AND MONEY TRANSMITTING SERVICE.—The 

3 terms ‘money transmitting business’ and 

4 ‘money transmitting service’ have the meanings 

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

6 without regard to any regulations prescribed by 

7 the Secretary under such section). 

8 ‘‘§ 5385. Limitation on licenses in States and Indian 

9 lands 

10 ‘‘(a) STATE OPT-OUT EXERCISE.— 

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

12 ‘‘(A) IN GENERAL.—No licensee may 

13 knowingly accept a bet or wager, under a li14 cense issued pursuant to this subchapter, initi15 ated by a person who is located in any State 

16 which provides notice that it will limit such bets 

17 or wagers, if the Governor or other chief execu18 tive officer of such State informs the Secretary 

19 of such limitation before the end of the 90-day 

20 period beginning on the date of the enactment 

21 of the Internet Poker and Game of Skill Regu22 lation, Consumer Protection, and Enforcement 

23 Act of 2009, or in accordance with paragraph 

24 (2), until such time as notice of any repeal of 


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•S 1597 IS

1 such limitation becomes effective under para2 graph (2). 

3 ‘‘(B) COORDINATION BETWEEN STATE AND

4 TRIBAL OPT-OUT EXERCISES.—Any State limi5 tation under Subparagraph (A) shall not apply 

6 to the acceptance by a licensee of bets or wa7 gers from persons located within the tribal 

8 lands of an Indian tribe that— 

9 ‘‘(i) has itself not chosen to opt out 

10 pursuant to subsection (b); or 

11 ‘‘(ii) would be entitled pursuant to 

12 other applicable law to permit such bets or 

13 wagers to be initiated and received within 

14 its territory without use of the Internet. 

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

16 establishment or repeal by any State of any limita17 tion referred to in paragraph (1) after the end of the 

18 90-day period beginning on the date of the enact19 ment of this subchapter shall apply, for purposes of 

20 this subchapter, beginning on the first January 1 

21 that occurs after the end of the 60-day period begin22 ning on the later of— 

23 ‘‘(A) the date a notice of such establish24 ment or repeal is provided by the Governor or 


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•S 1597 IS

1 other chief executive officer of such State in 

2 writing to the Secretary; or 

3 ‘‘(B) the effective date of such establish4 ment or repeal. 

5 ‘‘(3) EXISTING STATE LAW.—No provision of 

6 State law enacted prior to the Internet Poker and 

7 Game of Skill Regulation, Consumer Protection, and 

8 Enforcement Act of 2009 shall be construed to re9 quire a State to provide notice pursuant to this sub10 section. 

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

12 ‘‘(1) LIMITATIONS IMPOSED BY INDIAN

13 TRIBES.—No licensee may knowingly accept a bet or 

14 wager, under a license issued pursuant to this sub15 chapter, that is initiated by a person who is located 

16 in the tribal lands of any Indian tribe which limits 

17 such bets or wagers if the principal chief or other 

18 chief executive officer of such Indian tribe informs 

19 the Secretary of such limitation before the end of 

20 the 90-day period beginning on the date of the en21 actment of the Internet Poker and Game of Skill 

22 Regulation, Consumer Protection, and Enforcement 

23 Act of 2009, or in accordance with paragraph (2), 

24 until such time as notice of any repeal of such limi25 tation becomes effective under paragraph (2). 


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1 ‘‘(2) CHANGES TO INDIAN TRIBE LIMITA2 TIONS.—The establishment or repeal by any Indian 

3 tribal government of the limitation referred to in 

4 paragraph (1) after the end of the 90-day period be5 ginning on the date of the enactment of this sub6 chapter shall apply, for purposes of this subchapter, 

7 beginning on the first January 1 that occurs after 

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

9 of— 

10 ‘‘(A) the date a notice of such establish11 ment or repeal is provided by the principal chief 

12 or other chief executive officer of such Indian 

13 tribal government in writing to the Secretary; 

14 or 

15 ‘‘(B) the effective date of such establish16 ment or repeal. 

17 ‘‘(3) EXISTING TRIBAL LAW.—No provision of 

18 tribal law enacted prior to the Internet Poker and 

19 Game of Skill Regulation, Consumer Protection, and 

20 Enforcement Act of 2009 shall be construed to re21 quire an Indian tribal government to provide notice 

22 pursuant to this subsection. 

23 ‘‘(c) NOTIFICATION AND ENFORCEMENT OF STATE

24 AND INDIAN TRIBE LIMITATIONS.— 


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

2 all licensees and applicants of all States and Indian 

3 tribes that have provided notice pursuant to para4 graph (1) or (2) of subsection (a) or (b), as the case 

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

6 no event later than 30 days before the effective date 

7 of such notice. 

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

9 effective measures to ensure that any licensee under 

10 this subchapter, as a condition of the license, com11 plies with any limitation imposed by any State or In12 dian tribe to which the licensee is subject under sub13 section (a) or (b), as the case may be. 

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

15 this subchapter for any licensee knowingly to accept 

16 a bet or wager initiated or otherwise made by a per17 son located at the time of such bet or wager within 

18 any State or in the tribal lands of any Indian tribe 

19 for which a notice is in effect under subsection (a) 

20 or (b), as the case may be. 

21 ‘‘(4) STATE ATTORNEY GENERAL ENFORCE22 MENT.—In any case in which the attorney general or 

23 other chief law enforcement officer of a State or any 

24 State or local law enforcement agency, authorized by 

25 the attorney general or other chief law enforcement 


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1 officer of the State or by State statute to prosecute 

2 violations of consumer protection law, has reason to 

3 believe that an interest of the residents of that State 

4 has been or is threatened or adversely affected by a 

5 violation by a licensee pursuant to paragraph (2), 

6 the State, or the State or local law enforcement 

7 agency, on behalf of the residents of the agency’s ju8 risdiction, may bring a civil action on behalf of the 

9 residents of that State or jurisdiction in a district 

10 court of the United States located therein— 

11 ‘‘(A) to enjoin that practice; or 

12 ‘‘(B) to enforce compliance with this sub13 chapter. 

14 ‘‘(d) NO IMPACT ON INDIAN GAMING REGULATORY

15 ACT.—No decision by a State pursuant to this section 

16 shall be considered in determining the ability of an Indian 

17 tribe to offer any class of gambling activity pursuant to 

18 section 11 of the Indian Gaming Regulatory Act (25 

19 U.S.C. 2710) or any successor provisions. 

20 ‘‘§ 5386. Prohibition on bets or wagers on games of 

21 chance and sporting events 

22 ‘‘(a) IN GENERAL.—No provision of this subchapter 

23 shall be construed to authorize any licensee to accept a 

24 bet or wager knowingly from a person located in the 

25 United States on— 


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1 ‘‘(1) any game that is not an Internet game of 

2 skill; or 

3 ‘‘(2) any sporting event in violation of section 

4 3702 of title 28 or of any other applicable provision 

5 of State or Federal law. 

6 ‘‘(b) CONSTRUCTION.—Nothing in this subchapter 

7 shall be construed to repeal or to amend any provision of 

8 State or Federal law prohibiting, restricting, or otherwise 

9 addressing bets or wagers on sporting events. 

10 ‘‘§ 5387. Safe harbor 

11 ‘‘It shall be an affirmative defense to any prosecution 

12 or enforcement action under any provision of Federal or 

13 State law that the activity forming the basis of such pros14 ecution or enforcement action is authorized under and has 

15 been carried out lawfully in accordance with and under 

16 the terms of— 

17 ‘‘(1) this subchapter; or 

18 ‘‘(2) the Interstate Horseracing Act of 1978 

19 (15 U.S.C. 3001 et seq.). 

20 ‘‘§ 5388. Relation to section 1084 of title 18 and sub21 chapter IV of this title 

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

23 chapter shall not apply to any bet or wager— 


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1 ‘‘(1) occurring pursuant to a license issued by 

2 the Secretary under this subchapter, subject to sec3 tion 5386; or 

4 ‘‘(2) that is permissible under the Interstate 

5 Horseracing Act of 1978 (15 U.S.C. 3001 et seq.). 

6 ‘‘§ 5389. Cheating and other fraud 

7 ‘‘(a) ELECTRONIC CHEATING DEVICES PROHIB8 ITED.—No person initiating, receiving, or otherwise mak9 ing a bet or wager with a licensee, or sending, receiving, 

10 or inviting information assisting with a bet or wager with 

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

12 of, an electronic, electrical, or mechanical device which is 

13 designed, constructed, or programmed specifically for use 

14 in obtaining an advantage in any game authorized under 

15 this subchapter, where such advantage is prohibited or 

16 otherwise violates the rules of play established by the li17 censee. 

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

19 receiving, or otherwise making a bet or wager with a li20 censee, or sending, receiving, or inviting information as21 sisting with a bet or wager with a licensee, shall knowingly 

22 use or possess any cheating device with intent to cheat 

23 or defraud any licensee or other persons placing bets or 

24 wagers with such licensee. 


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

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

3 a permanent injunction enjoining such person from initi4 ating, receiving, or otherwise making bets or wagers or 

5 sending, receiving, or inviting information assisting in the 

6 placing of bets or wagers. 

7 ‘‘(d) CRIMINAL PENALTY.—Whoever violates sub8 section (a) or (b) shall be fined under title 18 or impris9 oned for not more than 5 years, or both. 

10 ‘‘§ 5390. Construction and relation to State law 

11 ‘‘(a) NO IMPACT ON EXISTING LAWFUL GAMES.— 

12 ‘‘(1) IN GENERAL.—If certain games of skill 

13 are not regarded as gambling under an applicable 

14 provision of State or Federal law in effect as of the 

15 effective date of the enactment of the Internet Poker 

16 and Game of Skill Regulation, Consumer Protection, 

17 and Enforcement Act of 2009— 

18 ‘‘(A) nothing in this subchapter shall be 

19 construed to require licensing under this sub20 chapter with respect to such games; and 

21 ‘‘(B) fees paid to participate in such games 

22 shall not be regarded as bets or wagers for pur23 poses of this subchapter. 

24 ‘‘(2) RELIANCE.—Nothing in this subchapter 

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1 missibility of games described in paragraph (1) with2 out compliance with the licensing and other require3 ments of this subchapter. 

4 ‘‘(b) PUBLIC GAMING FACILITIES NOT AUTHOR5 IZED.— 

6 ‘‘(1) IN GENERAL.—Nothing in this subchapter 

7 shall be construed to authorize or otherwise to per8 mit the operation of places of public accommodation, 

9 clubs (including clubs or associations limited to 

10 dues-paying members or similar restricted groups), 

11 and similar establishments for the primary purpose 

12 of allowing the public or members access to Internet 

13 bets or wagers. 

14 ‘‘(2) ASSUMED PUBLIC GAMING FACILITIES.— 

15 Any place of public accommodation, club, or similar 

16 establishment in which large numbers of computer 

17 terminals or similar access devices are made avail18 able that are used principally for the purpose of 

19 Internet bets or wagers shall be considered a place 

20 of public accommodation, club, or similar establish21 ment operated for the primary purpose of allowing 

22 the public or members access to Internet bets or wa23 gers under subparagraph (A). 

24 ‘‘(3) RELATION TO STATE LAW.—Places of pub25 lic accommodation, clubs, or similar establishments 


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1 described in this subsection shall be subject to all 

2 otherwise applicable State, tribal, and local police 

3 zoning and other regulatory powers, which are not 

4 intended to be limited in any way by this sub5 chapter. 

6 ‘‘(c) INTERSTATE OFF-TRACK WAGERS.—The provi7 sions of this subchapter restricting acceptance of bets or 

8 wagers made by individuals located in the United States 

9 or requiring the blocking or other prevention of restricted 

10 transactions shall not apply with respect to the acceptance 

11 of interstate off-track wagers (as such term is defined by 

12 section 3 of the Interstate Horseracing Act of 1978, as 

13 amended (15 U.S.C. 3002)), whether such off-track wager 

14 is made by telephone, Internet, satellite, or other wire or 

15 wireless communication.’’. 

16 (b) CLERICAL AMENDMENT.—The table of sections 

17 for chapter 53 of title 31, United States Code, is amended 

18 by adding at the end the following: 

‘‘SUBCHAPTER V—REGULATION OF INTERNET GAME-OF-SKILL FACILITIES

‘‘Sec. 

‘‘5381. Definitions. 

‘‘5382. Establishment and administration of licensing program. 

‘‘5383. Compulsive Gaming, Responsible Gaming, and Self-Exclusion Program. 

‘‘5384. Financial transaction providers. 

‘‘5385. Limitation on licenses in States and Indian lands. 

‘‘5386. Prohibition on bets or wagers on games of chance and sporting events. 

‘‘5387. Safe harbor. 

‘‘5388. Relation to section 1084 of title 18 and subchapter IV of this title. 

‘‘5389. Cheating and other fraud. 

‘‘5390. Construction and relation to State law.’’. 


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1 SEC. 103. LIST OF UNLAWFUL INTERNET GAMBLING ENTER2 PRISES. 

3 (a) IN GENERAL.—Subchapter IV of chapter 53 of 

4 title 31, United States Code, is amended by adding at the 

5 end the following: 

6 ‘‘§ 5368. List of unlawful Internet gambling enter7 prises 

8 ‘‘(a) DEFINITIONS.—In this section: 

9 ‘‘(1) UNLAWFUL INTERNET GAMBLING ENTER10 PRISE.—The term ‘unlawful Internet gambling en11 terprise’ means any person who, more than 10 days 

12 after the date of the enactment of this section— 

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

14 ‘‘(B) knowingly receives or transmits funds 

15 intended primarily for a person described in 

16 subparagraph (A); or 

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

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

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

20 the Director of the Financial Crimes Enforcement 

21 Network appointed under section 310(b). 

22 ‘‘(b) LIST OF UNLAWFUL INTERNET GAMBLING EN23 TERPRISES.— 

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

25 after the date of the enactment of this section, the 

26 Director shall submit to the Secretary a list of unVerDate Nov 24 2008 20:26 Sep 02, 2009 Jkt 079200 PO 00000 Frm 00055 Fmt 6652 Sfmt 6201 E:\BILLS\S1597.IS S1597

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1 lawful Internet gambling enterprises and shall regu2 larly update such list in accordance with the proce3 dures described in paragraph (3). Such list shall in4 clude the following information for each such unlaw5 ful Internet gambling enterprise: 

6 ‘‘(A) All known Internet website addresses 

7 of the enterprise. 

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

9 operators of the enterprise. 

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

11 identifying the financial agents and account 

12 numbers of the enterprise and the persons list13 ed under subparagraph (B). 

14 ‘‘(2) DISTRIBUTION OF LIST BY SECRETARY.— 

15 The Secretary shall make available— 

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

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

18 (1) on the Internet website of the Department 

19 of the Treasury; 

20 ‘‘(B) to all persons who are required to 

21 comply with the regulations prescribed under 

22 the authority provided in section 5364 a copy of 

23 all the information provided under paragraph 

24 (1) in an electronic format compatible with the 


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1 Specially Designated Nationals list maintained 

2 by the Office of Foreign Assets Control; and 

3 ‘‘(C) any information required under this 

4 paragraph not later than 10 days after receiv5 ing any new or updated list from the Director. 

6 ‘‘(3) PROCEDURES.—The procedures described 

7 in this paragraph are the following: 

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

9 investigate entities that appear to be unlawful 

10 Internet gambling enterprises. An initial inves11 tigation shall be completed before the end of the 

12 60-day period beginning on the date of enact13 ment of this section. After the initial investiga14 tion, the Director shall regularly investigate en15 tities that appear to be unlawful Internet gam16 bling enterprises. If the Director discovers evi17 dence sufficient to prove a prima facie case that 

18 any person is an unlawful Internet gambling 

19 enterprise, the Director shall provide the notice 

20 required under subparagraph (C). 

21 ‘‘(B) REQUESTS.—Any Federal, State, 

22 tribal, or local law enforcement official, any af23 fected sports organization, any person directly 

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1 active computer service (as such terms are de2 fined in section 5362) shall have the right, but 

3 not the obligation, to make a written request to 

4 the Director for the addition of any person to 

5 the list of unlawful Internet gambling enter6 prises. If the Director determines that the evi7 dence submitted is sufficient to prove a prima 

8 facie case that such person is an unlawful 

9 Internet gambling enterprise, the Director shall 

10 provide the notice required under subparagraph 

11 (C) to each person identified as an alleged un12 lawful Internet gambling enterprise. The Direc13 tor also shall provide written notice of its deci14 sion under this subparagraph, including a deci15 sion not to add a person to the list required 

16 under paragraph (1), to the requesting party no 

17 later than 30 days after the request is received. 

18 The Director shall not include on the list any 

19 person operating an Internet game-of-skill facil20 ity who falls within the scope of section 108(a) 

21 of the Internet Poker and Game of Skill Regu22 lation, Consumer Protection, and Enforcement 

23 Act of 2009. 

24 ‘‘(C) NOTICE.—Not fewer than 30 days 

25 before adding an unlawful Internet gambling 


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1 enterprise, or an owner or operator thereof, to 

2 the list required under paragraph (1), the Di3 rector shall provide written notice to such en4 terprise, owner, or operator. Any enterprise, 

5 owner, or operator receiving such notice may 

6 contest the Director’s determination by written 

7 appeal to the Director not more than 30 days 

8 after receiving notice. 

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

10 person properly submits a written appeal under 

11 subparagraph (C), the Director shall not in12 clude such person in the list required under 

13 paragraph (1) unless and until the Director 

14 provides such person with an opportunity for a 

15 hearing not more than 30 days after receiving 

16 written notice of appeal. Not more than 10 days 

17 after an opportunity for hearing is afforded, 

18 whether or not the person requesting the hear19 ing appears at such hearing, the Director shall 

20 proceed to add such person to the list of unlaw21 ful Internet gambling enterprises unless the Di22 rector determines, based on a preponderance of 

23 the evidence, that such person is not an unlaw24 ful Internet gambling enterprise. 


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

2 that the Director determines shall be included 

3 in the list required under paragraph (1) after 

4 such person appears at a hearing described in 

5 subparagraph (D) and any person included in 

6 such list who did not receive the notice required 

7 under subparagraph (C), may petition for in8 junctive relief in the United States District 

9 Court for the District of Columbia, which shall 

10 have exclusive jurisdiction to hear challenges 

11 pursuant to this section. The petitioner shall 

12 have the burden of establishing by a preponder13 ance of the evidence that such person is not an 

14 unlawful Internet gambling enterprise. Only 

15 persons designated by the Director for inclusion 

16 on the list of unlawful Internet gambling enter17 prises, and other owners or operators of an en18 terprise to be so listed, shall have standing to 

19 contest the Director’s determination. The court 

20 may enjoin the Director and the Secretary not 

21 to add or remove the petitioner from the list of 

22 unlawful Internet gambling enterprises, and no 

23 other judicial recourse shall be permitted. 

24 ‘‘(c) EFFECT OF LIST.—A financial transaction pro25 vider shall be deemed to have actual knowledge that a perVerDate Nov 24 2008 20:26 Sep 02, 2009 Jkt 079200 PO 00000 Frm 00060 Fmt 6652 Sfmt 6201 E:\BILLS\S1597.IS S1597

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1 son is an unlawful Internet gambling enterprise to the ex2 tent that such person is identified on the list available to 

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

4 financial transaction provider, by the Secretary as de5 scribed in subsection (b)(2), provided that the list shall 

6 not be deemed to be the sole source of actual knowledge.’’. 

7 (b) CLERICAL AMENDMENT.—The table of sections 

8 at the beginning of such chapter 53 is amended by insert9 ing after the item relating to section 5367 the following: 

‘‘5368. List of unlawful Internet gambling enterprises.’’. 

10 SEC. 104. REGULATIONS. 

11 (a) LICENSING OF INTERNET GAME-OF-SKILL FA12 CILITIES.—Not later than 180 days after the date of the 

13 enactment of this Act, the Secretary shall— 

14 (1) prescribe regulations to carry out sub15 chapter V of chapter 53 of title 31, United States 

16 Code, as added by section 102(a); and 

17 (2) publish such regulations in final form in the 

18 Federal Register. 

19 (b) EXCLUSION OF BOARD OF GOVERNORS OF THE

20 FEDERAL RESERVE SYSTEM FROM REQUIREMENT TO

21 PRESCRIBE REGULATIONS CONCERNING PREVENTION OF

22 RESTRICTED TRANSACTIONS.—Subsection (a) of section 

23 5364 of such title is amended by striking ‘‘Before the end 

24 of the 270-day period beginning on the date of the enact25 ment of this subchapter, the Secretary and the Board of 


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1 Governors of the Federal Reserve System, in consultation 

2 with the Attorney General, shall prescribe regulations 

3 (which the Secretary and the Board jointly determine to 

4 be appropriate)’’ and inserting ‘‘The Secretary shall pre5 scribe regulations’’. 

6 (c) MODIFICATION OF REQUIREMENTS FOR POLICIES

7 AND PROCEDURES.—Subsection (b) of such section is 

8 amended to read as follows: 

9 ‘‘(b) REQUIREMENTS FOR POLICIES AND PROCE10 DURES.—In prescribing regulations under subsection (a), 

11 the Secretary shall— 

12 ‘‘(1) identify types of policies and procedures, 

13 including nonexclusive examples, which would be 

14 deemed, as applicable, to be reasonably designed to 

15 identify and block or otherwise prevent or prohibit 

16 the acceptance of the products or services of the 

17 payment system or participant with respect to each 

18 type of restricted transaction; 

19 ‘‘(2) permit any participant in a payment sys20 tem to rely on the policies and procedures of such 

21 payment system if such policies and procedures are 

22 reasonably designed to identify and block or other23 wise prevent or prohibit a transaction in which any 

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1 action has actual knowledge that the intended recipi2 ent is an unlawful Internet gambling enterprise; 

3 ‘‘(3) exempt certain participants from any re4 quirement imposed under such regulations if the 

5 Secretary finds that— 

6 ‘‘(A) such requirement is not reasonably 

7 practical for such participants; and 

8 ‘‘(B) such regulations are reasonably cal9 culated to require at least 1 participant under 

10 the jurisdiction of the United States in each 

11 designated payment system to identify and 

12 block or otherwise prevent or prohibit the ac13 ceptance of the products or services of the pay14 ment system with respect to each type of re15 stricted transaction; and 

16 ‘‘(4) ensure that transactions in connection with 

17 any activity excluded from the definition of unlawful 

18 Internet gambling in subparagraphs (B), (C), (D)(i), 

19 or (E) of section 5362(10) or that are lawfully con20 ducted pursuant to section 5382 are not blocked or 

21 otherwise prevented or prohibited by the prescribed 

22 regulations.’’. 

23 (d) TEMPORARY SUSPENSION OF CERTAIN REGULA24 TIONS.— 


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1 (1) IN GENERAL.—Subject to paragraph (2), 

2 during the period beginning on the date of the en3 actment of this Act and ending on June 1, 2010, 

4 part 233 of title 12, Code of Federal Regulations, 

5 and part 132 of title 31, Code of Federal Regula6 tions, shall have no force or effect. 

7 (2) PREVIOUS VIOLATION.—Paragraph (1) shall 

8 not apply with respect to any violation of a regula9 tion described in such paragraph that occurred be10 fore the date of the enactment of this Act. 

11 (e) REVISION OF REGULATIONS.—The Secretary of 

12 the Treasury shall, in consultation with the Attorney Gen13 eral, revise the regulations described in subsection (d)(1) 

14 in accordance with the amendments made to subchapter 

15 IV of chapter 53 of title 31, United States Code, by this 

16 Act. 

17 SEC. 105. ANNUAL REPORT. 

18 (a) IN GENERAL.—Not later than 1 year after the 

19 date on which the Secretary of the Treasury prescribes 

20 regulations under section 104(a) and annually thereafter, 

21 the Secretary shall submit to Congress a report on the 

22 licensing and regulation of Internet game-of-skill facilities 

23 (as such term is defined in section 5382 of title 31, United 

24 States Code, as added by section 102(a)). 


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1 (b) ELEMENTS.—Each report submitted under sub2 section (a) shall include the following: 

3 (1) A description of all notices received by the 

4 Secretary of the Treasury under subsections (a) and 

5 (b) of section 5385 of title 31, United States Code, 

6 as added by section 102(a). 

7 (2) The amount of user fees received under sec8 tion 5382(e) of such title (as added by section 

9 102(a)), the amount of Federal, State, and tribal li10 censing fees collected, and an estimate of the 

11 amount of income tax revenue that is attributable to 

12 the operation of Internet game-of-skill facilities (as 

13 such term is defined in section 5381 of such title, 

14 as so added) during the period covered by the re15 port. 

16 (3) A list of the State and tribal regulatory 

17 bodies that the Secretary has made an affirmative 

18 determination under section 5382(n)(1)(B) of such 

19 title, as so added, the number of licensees reviewed 

20 by such regulatory bodies, and the outcomes of such 

21 reviews. 

22 (4) A description of the efforts the Secretary 

23 has undertaken to ensure that licensees qualified by 

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1 ments of subchapter V of chapter 53 of such title, 

2 as so added. 

3 (5) Information on regulatory and enforcement 

4 actions undertaken during the period for which the 

5 report is submitted with respect to the provisions of 

6 such subchapter. 

7 (6) Data regarding the list required by 

8 5368(b)(1) of such title, as added by section 103(a), 

9 including its size, the number of persons and 

10 websites added and removed, number and descrip11 tion of challenges to inclusion on the list, and resolu12 tion of those challenges. 

13 (7) Any other information the Secretary deter14 mines may be useful to Congress in evaluating the 

15 effectiveness of subchapter V of chapter 53 of such 

16 title, as added by section 102(a), in meeting its pur17 pose, including the provision of protections against 

18 underage gambling, compulsive gambling, money 

19 laundering and fraud, and in combating tax avoid20 ance relating to Internet gambling. 

21 SEC. 106. CONFORMING AMENDMENTS. 

22 (a) DUTIES AND POWERS OF THE DIRECTOR OF THE

23 FINANCIAL CRIMES ENFORCEMENT NETWORK.—Section 

24 310(b)(2) of title 31, United States Code, is amended— 


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1 (1) by redesignating subparagraphs (I) and (J) 

2 as subparagraphs (J) and (K), respectively; and 

3 (2) by inserting after subparagraph (H) the fol4 lowing: 

5 ‘‘(i) Administer the requirements of 

6 subchapter V of chapter 53.’’. 

7 (b) EXCLUSION OF LICENSED INTERNET GAME-OF8 SKILL FACILITY OPERATIONS FROM DEFINITION OF UN9 LAWFUL INTERNET GAMBLING.—Section 5362(10) of 

10 such title is amended— 

11 (1) in subparagraph (D), by striking clause 

12 (iii); 

13 (2) by redesignating subparagraph (E) as sub14 paragraph (F); and 

15 (3) by inserting after subparagraph (D) the fol16 lowing: 

17 ‘‘(E) LICENSED INTERNET GAME-OF-SKILL

18 FACILITIES.—The term ‘unlawful Internet gam19 bling’ shall not include an activity carried out 

20 by an Internet game-of-skill facility (as such 

21 term is defined in section 5382) operated by a 

22 person under a license provided under sub23 chapter V in accordance with the provisions of 

24 such subchapter.’’. 


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1 SEC. 107. EFFECTIVE DATE. 

2 Subchapter V of chapter 53 of title 31, United States 

3 Code, and the regulations prescribed under section 104(a) 

4 shall take effect on the date that is 90 days after the date 

5 on which the Secretary of the Treasury publishes regula6 tions under paragraph (2) of such section. 

7 SEC. 108. APPLICABILITY. 

8 (a) IN GENERAL.—Subsection (b)(1) of 5382 of title 

9 31, United States Code, as added by section 102(a), shall 

10 not apply to a person who, not later than 90 days after 

11 enactment of this Act, notifies in writing the Secretary 

12 of the Treasury of their intent to seek a license under sub13 chapter V of such chapter, as so added, and who not later 

14 than 90 days after the date on which the Secretary of the 

15 Treasury begins accepting applications for licenses under 

16 subchapter V of such chapter, as so added, submits to the 

17 Secretary of the Treasury an application for a license 

18 under such subchapter may operate an Internet game-of19 skill facility in interstate or foreign commerce, in which 

20 bets or wagers are knowingly initiated, received, or other21 wise made by individuals located in the United States, 

22 without a license issued to such person by the Secretary 

23 under such subchapter during the period beginning on the 

24 date of such submittal and ending on the earlier of— 

25 (1) the date the Secretary grants such license; 


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1 (2) the date that is 2 years after the date of 

2 such submittal; or 

3 (3) the date on which the Secretary denies such 

4 application. 

5 (b) CONSTRUCTION.—Subsection (a) shall not be con6 strued to modify, amend, or affect in any way any other 

7 provision of law with respect to unlawful Internet gam8 bling (as such term is defined in section 5361 of such 

9 title). 

10 (c) PREVIOUS OPERATION.—The Secretary of the 

11 Treasury may not deny an application for a license under 

12 subchapter V of such title, as so added, that is submitted 

13 by an applicant during the 90-day period beginning on the 

14 date that the Secretary begins accepting applications 

15 under such subchapter because the applicant operated an 

16 Internet game-of-skill facility, in interstate or foreign com17 merce, in which bets or wagers were knowingly initiated, 

18 received, or otherwise made by individuals located in the 

19 United States, without a license issued to such person by 

20 the Secretary under such subchapter. 

21 (d) DEFINITIONS.—The terms ‘‘bet or wager’’ and 

22 ‘‘operate an Internet game-of-skill facility’’ have the mean23 ing given such terms in section 5381 of such title, as 

24 added by section 102(a). 


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1 TITLE II—INTERNET GAMES OF 

2 SKILL TAX PROVISIONS 

3 SEC. 201. AMENDMENT OF 1986 CODE. 

4 (a) AMENDMENT OF 1986 CODE.—Except as other5 wise expressly provided, whenever in this title an amend6 ment or repeal is expressed in terms of an amendment 

7 to, or repeal of, a section or other provision, the reference 

8 shall be considered to be made to a section or other provi9 sion of the Internal Revenue Code of 1986. 

10 SEC. 202. TAX ON INTERNET GAMES OF SKILL; LICENSEE 

11 INFORMATION REPORTING. 

12 (a) IN GENERAL.—Chapter 36 is amended by adding 

13 at the end the following new subchapter: 

14 ‘‘Subchapter E—Internet Gambling and 

15 Games of Skill 

16 ‘‘SEC. 4491. IMPOSITION OF INTERNET GAMING LICENSE 

17 FEE. 

18 ‘‘(a) IMPOSITION OF FEE.—Each person who is a li19 censee shall be required to pay not later than 15 days after 

20 the end of each calendar month a fee equal to the sum 

21 of— 

22 ‘‘(1) the Federal Internet gaming license fee; 

23 and 

24 ‘‘(2) the State or Indian tribal government 

25 gaming license fee. 


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1 ‘‘(b) AMOUNT OF FEES.—For purposes of this sec2 tion— 

3 ‘‘(1) FEDERAL INTERNET GAMING LICENSE

4 FEE.—The Federal Internet gaming license fee is a 

5 fee equal to 5 percent of a licensee’s Internet gam6 ing deposited funds for a calendar month. 

7 ‘‘(2) STATE OR INDIAN TRIBAL GOVERNMENT

8 GAMING LICENSE FEE.—The State or Indian tribal 

9 government gaming license fee is a fee equal to 5 

10 percent of a licensee’s Internet gaming deposited 

11 funds for a calendar month. 

12 ‘‘(3) INTERNET GAMING DEPOSITED FUNDS.— 

13 The term ‘Internet gaming deposited funds’ means 

14 all funds deposited by persons located within the 

15 United States into any account maintained by the li16 censee or any agent of the licensee into which funds 

17 are deposited for the purpose of being used to place 

18 a bet or wager with respect to an Internet game of 

19 skill. Funds received from a customer by an operator 

20 of an Internet game-of-skill facility and made avail21 able in any form to a customer for the purpose of 

22 placing a bet or wager, and funds paid to reimburse 

23 an operator of an Internet game-of-skill facility for 

24 value previously advanced to the customer for such 

25 purpose, shall be regarded as Internet gaming deVerDate Nov 24 2008 20:26 Sep 02, 2009 Jkt 079200 PO 00000 Frm 00071 Fmt 6652 Sfmt 6201 E:\BILLS\S1597.IS S1597

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1 posited funds unless the funds received or paid were 

2 already considered Internet gaming deposited funds 

3 prior to their transmittal to the operator of the 

4 Internet game-of-skill facility. 

5 ‘‘(4) LIMITATION TO IMPOSITION OF ONE

6 STATE OR INDIAN TRIBAL GAMING LICENSE FEE FOR

7 ANY TRANSACTION.—In the case of a customer lo8 cated within the jurisdiction of an Indian tribe at 

9 the time of a transaction, only one fee described in 

10 paragraph (2) shall be imposed on a licensee’s Inter11 net gaming deposited funds in connection with that 

12 transaction, and no additional fee shall be collected 

13 on behalf of the State in which the customer is lo14 cated. All of the fee described in paragraph (2) in 

15 such case shall be allocated to the Indian tribe in 

16 which the customer is located at the time of the 

17 transaction, and no portion of the fee shall be allo18 cated to the State. 

19 ‘‘(c) UNAUTHORIZED GAMING.— 

20 ‘‘(1) PENALTY.—Each person who is not a li21 censee and who operates an Internet game-of-skill 

22 facility for which a license is required under section 

23 5390(a)(1) of title 31, United States Code, except as 

24 provided in section 108(a) shall be required to pay 

25 not later than the end of each calendar month a fee 


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1 equal to the amount of the Federal Internet gaming 

2 license fee that would be applicable to such person 

3 for such month if such person were a licensee, deter4 mined by substituting ‘50 percent’ for ‘5 percent’ in 

5 subsection (b)(1). 

6 ‘‘(2) EXCEPTION.—Paragraph (1) shall not 

7 apply to a game described in paragraph (3) of sec8 tion 5382(b) of title 31, United States Code. 

9 ‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur10 poses of this subchapter— 

11 ‘‘(1) IN GENERAL.—The terms ‘licensee’, ‘bet 

12 or wager’, ‘Internet game of skill’, and ‘Internet 

13 game-of-skill facility’ have the meaning given such 

14 terms by section 5381 of title 31, United States 

15 Code. 

16 ‘‘(2) DEPOSITS.—Deposits made by or on be17 half of a licensee of Internet gaming winnings, and 

18 returns of funds by or on behalf of a licensee to the 

19 account of a customer, shall not be treated as a de20 posit. 

21 ‘‘(e) PERSONS LIABLE.— 

22 ‘‘(1) IN GENERAL.—Each licensee or other per23 son who operates an Internet game-of-skill facility 

24 for which a license is required under section 

25 5382(b)(1) of title 31, United States Code, shall be 


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1 liable for and shall pay the applicable fees under this 

2 section with respect to all Internet gaming deposited 

3 funds. 

4 ‘‘(2) JOINT AND SEVERAL LIABILITY FOR UN5 AUTHORIZED GAMBLING.—In the case of any deposit 

6 with respect to which a fee is imposed under sub7 section (c), the person described in paragraph (1) of 

8 such subsection and the person making such deposit 

9 for the purposes of placing a bet or wager shall be 

10 jointly and severally liable for the fee under such 

11 subsection with respect to such deposit. 

12 ‘‘(f) ADMINISTRATIVE PROVISIONS.—Except to the 

13 extent the Secretary shall by regulations prescribe, the ad14 ministrative provisions of this title applicable to the excise 

15 taxes imposed by chapter 35 shall apply to the fees im16 posed by this section. 

17 ‘‘SEC. 4492. RECORD KEEPING REQUIREMENTS. 

18 ‘‘(a) IN GENERAL.—Each licensee who is liable for 

19 the fees imposed by this subchapter shall keep a daily 

20 record showing all deposits to which this subchapter ap21 plies, in addition to all other records required pursuant 

22 to section 6001(a). 

23 ‘‘(b) RECORDS WITH RESPECT TO STATE OR INDIAN

24 TRIBAL GOVERNMENT GAMING LICENSE FEE.—Each li25 censee to which subsection (a) applies shall keep a record, 


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1 using methods determined to be satisfactory by the Sec2 retary or, in the case of a licensee who is certified by a 

3 State or tribal regulatory body under section 5382(o) of 

4 title 31, United States Code, by such State or tribal regu5 latory body, of the location of each person making a de6 posit to which this subchapter applies, for purposes of de7 termining the State or Indian tribal government gaming 

8 license fee applicable to such deposit for purposes of sec9 tion 9511.’’. 

10 (b) INFORMATION RETURNS.—Subpart B of part III 

11 of subchapter A of chapter 61 is amended by adding at 

12 the end the following new section: 

13 ‘‘SEC. 6050X. RETURNS RELATING TO INTERNET GAMBLING 

14 AND GAMES OF SKILL. 

15 ‘‘(a) REQUIREMENT.—Every person described in sec16 tion 4491(e)(1) with respect to any month during a tax17 able year shall furnish, at such time and in such manner 

18 as the Secretary shall by regulations prescribe, the infor19 mation described in subsection (b), and such person shall 

20 maintain (in the location and manner and to the extent 

21 prescribed in such regulations) such records as may be ap22 propriate with respect to such information. 

23 ‘‘(b) REQUIRED INFORMATION.—For purposes of 

24 subsection (a), the information described in this sub25 section is— 


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1 ‘‘(1) the name, address, and TIN of the person 

2 described in subsection (a); 

3 ‘‘(2) the name, address, and TIN of each per4 son placing a bet or wager (within the meaning of 

5 section 4491) with the person described in sub6 section (a) during the calendar year; 

7 ‘‘(3) the gross winnings, gross wagers, and 

8 gross losses for the calendar year of each person 

9 placing a bet or wager as described in paragraph 

10 (2); 

11 ‘‘(4) the net Internet gaming winnings for each 

12 such person for the calendar year; 

13 ‘‘(5) the amount of tax withheld, if any, with 

14 respect to each such person by the person described 

15 in subsection (a) for the calendar year; 

16 ‘‘(6) the balance of any account maintained for 

17 each person placing a bet or wager as described in 

18 paragraph (2) by the person described in subsection 

19 (a), at the beginning and the end of the calendar 

20 year; and 

21 ‘‘(7) the amounts of all deposits and with22 drawals from each such account during such cal23 endar year. 

24 ‘‘(c) STATEMENT TO BE FURNISHED TO PERSONS

25 WITH RESPECT TO WHOM INFORMATION IS REQUIRED.— 


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1 Every person required to make a return under subsection 

2 (a) shall furnish to each person whose name is required 

3 to be set forth in such return a written statement show4 ing— 

5 ‘‘(1) the name, address, and phone number of 

6 the information contact of the person required to 

7 make such return; and 

8 ‘‘(2) the information required to be shown on 

9 such return with respect to each person whose name 

10 is required to be set forth in such return. 

11 The written statement required under the preceding sen12 tence shall be furnished to the person on or before Janu13 ary 31 of the year following the calendar year for which 

14 the return under subsection (a) was required to be made. 

15 ‘‘(d) NET INTERNET GAMING WINNINGS.—The term 

16 ‘net Internet gaming winnings’ means gross winnings 

17 from bets or wagers with an Internet game-of-skill facility 

18 (within the meaning of section 4491) for which a license 

19 is required under section 5382(b)(1) of title 31, United 

20 States Code, reduced (but not below zero) by the amounts 

21 bet or wagered.’’. 

22 (c) STATE AND INDIAN TRIBAL GOVERNMENT GAM23 ING LICENSE FEE TRUST FUND.—Subchapter A of chap24 ter 98 is amended by adding at the end the following new 

25 section: 


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1 ‘‘SEC. 9511. STATE AND INDIAN TRIBAL GOVERNMENT GAM2 ING LICENSE FEE TRUST FUND. 

3 ‘‘(a) CREATION OF TRUST FUND.—There is estab4 lished in the Treasury of the United States a trust fund 

5 to be known as the ‘State and Indian Tribal Government 

6 Gaming License Fee Trust Fund’ (hereafter in this sec7 tion referred to as the ‘Trust Fund’), consisting of such 

8 amounts as may be appropriated or credited to such Trust 

9 Fund as provided in this section and section 9602(b). 

10 ‘‘(b) TRANSFERS TO FUND.—There are hereby ap11 propriated to the Trust Fund amounts equivalent to the 

12 fees received in the Treasury with respect to each calendar 

13 month under section 4491 by reason of subsection (a)(2) 

14 thereof. 

15 ‘‘(c) EXPENDITURES FROM FUND.— 

16 ‘‘(1) IN GENERAL.—The Secretary shall pay to 

17 each qualified State and each qualified Indian tribal 

18 government, out of the amounts in the Trust Fund, 

19 an amount equal to the monthly pro rata gaming li20 cense fee amount. 

21 ‘‘(2) MONTHLY PRO RATA GAMING LICENSE

22 FEE AMOUNT.—For purposes of this section, with 

23 respect to a qualified State and a qualified Indian 

24 tribal government for any calendar month, the 

25 monthly pro rata gaming license fee amount is the 

26 amount of the fees described in subsection (b) reVerDate Nov 24 2008 20:26 Sep 02, 2009 Jkt 079200 PO 00000 Frm 00078 Fmt 6652 Sfmt 6201 E:\BILLS\S1597.IS S1597

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1 ceived with respect to such calendar month that are 

2 attributable to deposits made by persons located 

3 within the jurisdiction of such State or tribal govern4 ment (determined by the Secretary on the basis of 

5 records kept under section 4492(b)). 

6 ‘‘(3) QUALIFIED STATE; QUALIFIED INDIAN

7 TRIBAL GOVERNMENT.— 

8 ‘‘(A) IN GENERAL.—For purposes of this 

9 section, the terms ‘qualified State’ and ‘quali10 fied Indian tribal government’ mean a State or 

11 an Indian tribal government, respectively, that 

12 has not elected (by notice provided by the Gov13 ernor, principal chief, or other chief executive 

14 officer and in such form and manner as the 

15 Secretary may prescribe) to be excluded from 

16 the receipt of funds under this section. 

17 ‘‘(B) STATE ELECTION NOT TO AFFECT

18 TRIBAL ELECTION.—An election by a State 

19 under subparagraph (A) to be excluded from 

20 the receipt of funds under this section shall not 

21 constitute an election to be so excluded on be22 half of any Indian tribe located within or par23 tially within the geographic boundaries of such 

24 State. 


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1 ‘‘(C) APPLICABILITY OF ELECTION.—An 

2 election made under subparagraph (A) shall be 

3 effective— 

4 ‘‘(i) upon receipt by the Secretary, if 

5 such election is received within 90 days of 

6 the date of the enactment of the Internet 

7 Poker and Game of Skill Regulation, Con8 sumer Protection, and Enforcement Act of 

9 2009; and 

10 ‘‘(ii) in any other case, on the first 

11 January 1 that occurs at least 60 days 

12 after the later of— 

13 ‘‘(I) the receipt of such election 

14 by the Secretary; or 

15 ‘‘(II) the effective date specified 

16 in such election. 

17 ‘‘(D) STATE.—The term ‘State’ means any 

18 State of the United States, the District of Co19 lumbia, or any commonwealth, territory or 

20 other possession of the United States. 

21 ‘‘(E) INDIAN TRIBAL GOVERNMENT.—The 

22 term ‘Indian tribal government’ means the gov23 ernment of an Indian tribe (within the meaning 

24 of section 4 of the Indian Gaming Regulatory 

25 Act). 


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1 ‘‘(4) TIME OF PAYMENTS.—The payment made 

2 under this subsection with respect to any calendar 

3 month shall be made not later than the 11th day of 

4 the succeeding calendar month.’’. 

5 (d) CLERICAL AMENDMENTS.— 

6 (1) The table of subchapters for chapter 36 is 

7 amended by adding at the end the following item: 

‘‘SUBCHAPTER E. INTERNET GAMBLING AND GAMES OF SKILL.’’. 

8 (2) The table of sections for subpart B of part 

9 III of subchapter A of chapter 61 is amended by in10 serting after the item relating to section 6050W the 

11 following new item: 

‘‘Sec. 6050X. Returns relating to Internet gambling and games of skill.’’. 

12 (3) The table of sections for subchapter A of 

13 chapter 98 of such Code is amended by adding at 

14 the end the following new item: 

‘‘Sec. 9511. State and Indian Tribal Government Gaming License Fee Trust 

Fund.’’. 

15 (e) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to deposits made after the date 

17 of the enactment of this Act. 

18 SEC. 203. WITHHOLDING FOR PARIMUTUEL POOL 

19 WINNINGS. 

20 (a) WINNINGS SUBJECT TO WITHHOLDING.—Sub21 paragraph (C) of section 3402(q)(3) is amended to read 

22 as follows: 


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1 ‘‘(C) SWEEPSTAKES, WAGERING POOLS, 

2 AND LOTTERIES.—Proceeds of more than 

3 $5,000 from a wager placed in a sweepstakes, 

4 wagering pool, or lottery.’’. 

5 (b) EXCEPTION FOR PARIMUTUEL POOLS.—Para6 graph (5) of section 3402(q) is amended— 

7 (1) by striking ‘‘shall not apply to’’ and all that 

8 follows, and inserting ‘‘shall not apply— 

9 ‘‘(A) to winnings from a slot machine, 

10 keno, or bingo; and 

11 ‘‘(B) to proceeds from a wagering trans12 action in a parimutuel pool with respect to 

13 horse races, dog races, or jai alai.’’; and 

14 (2) by inserting ‘‘AND CERTAIN PARIMUTUEL

15 POOLS’’ after ‘‘SLOT MACHINES’’ in the heading. 

16 (c) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to payments made after the date 

18 of the enactment of this Act. 

19 SEC. 204. WITHHOLDING FROM CERTAIN GAMING 

20 WINNINGS. 

21 (a) NET INTERNET GAMING WINNINGS.—Paragraph 

22 (3) of section 3406(b) is amended— 

23 (1) by striking ‘‘or’’ at the end of subparagraph 

24 (E); 


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1 (2) by striking the period at the end of sub2 paragraph (F) and inserting ‘‘, or’’; and 

3 (3) by adding at the end the following new sub4 paragraph: 

5 ‘‘(G) section 6050X(b)(4) (relating to net 

6 internet gaming winnings).’’. 

7 (b) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to amounts paid after the date of 

9 the enactment of this Act. 

10 SEC. 205. WITHHOLDING OF TAX ON NONRESIDENT ALIENS. 

11 (a) TAX ON NONRESIDENT ALIEN INDIVIDUALS.— 

12 Paragraph (1) of section 871(a) is amended— 

13 (1) by striking ‘‘and’’ at the end of subpara14 graph (C); 

15 (2) by inserting ‘‘and’’ at the end of subpara16 graph (D); and 

17 (3) by inserting after subparagraph (D) the fol18 lowing new subparagraph— 

19 ‘‘(E) the net Internet gaming winnings (as 

20 defined in section 6050X(d)),’’. 

21 (b) EXEMPTION FOR CERTAIN GAMING WINNINGS.— 

22 The first sentence of section 871(j) is amended by insert23 ing ‘‘, or to net Internet gaming winnings (as defined in 

24 section 6050X(d))’’ before the period. 


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1 (c) WITHHOLDING OF TAX ON NONRESIDENT ALIEN

2 INDIVIDUALS.—The first sentence of subsection (b) of sec3 tion 1441 is amended by inserting ‘‘amounts described in 

4 section 871(a)(1)(E),’’ after ‘‘gains subject to tax under 

5 section 871(a)(1)(D),’’. 

6 (d) FOREIGN OFF-TRACK WAGERS.—Subsection 

7 (b)(5) of section 872 is amended by inserting ‘‘, including 

8 a legal wagering transaction placed over the Internet or 

9 other remote means from outside the United States. Any 

10 payment to any person with respect to income derived 

11 from a legal wagering transaction excluded by this sub12 section shall not be subject to any obligation under section 

13 1441, 1442, 3402(q), or 6041’’ before the period. 

14 (e) SOURCE OF INTERNET GAMBLING WINNINGS.— 

15 Subsection (a) of section 861 is amending by adding at 

16 the end the following new paragraph: 

17 ‘‘(9) INTERNET GAMING WINNINGS.—Net Inter18 net gaming winnings (as defined in section 

19 6050X(d)).’’. 

20 (f) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to payments made after the date 

22 of the enactment of this Act. 


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1 SEC. 206. INFORMATION AT SOURCE; PARIMUTUEL WA2 GERS. 

3 (a) IN GENERAL.—Section 6041 is amended by add4 ing at the end the following new subsection: 

5 ‘‘(h) CERTAIN GAMBLING WINNINGS.—Subsection 

6 (a) shall apply to payments made as proceeds of a pari7 mutuel wager only if the amount paid with respect to such 

8 wager is at least $1,200, and if the amount of the proceeds 

9 of such wager is at least 300 times of the amount wa10 gered.’’. 

11 (b) EFFECTIVE DATE.—The amendment made by 

12 this section shall apply to payments made after the date 

13 of the enactment of this Act. 

14 SEC. 207. EXEMPTION FROM STATE AND INDIAN TRIBAL 

15 GOVERNMENT TAXATION. 

16 (a) EXEMPTION FROM TAX ON INTERNET GAMES OF

17 SKILL.—A State or political subdivision thereof, and an 

18 Indian tribe or political subdivision thereof, shall impose 

19 no tax on— 

20 (1) deposits or bets or wagers placed with a li21 censee that is subject to the fees under section 4491 

22 of the Internal Revenue Code of 1986; or 

23 (2) income of a licensee relating to such depos24 its or bets or wagers, unless such licensee maintains 

25 a permanent physical presence in such State or with26 in the area of the jurisdiction of such Indian tribe. 


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1 (b) EXEMPTION NOT TO APPLY TO STATES AND IN2 DIAN TRIBES NOT RECEIVING TRUST FUND APPROPRIA3 TIONS.— 

4 (1) IN GENERAL.—Subsection(a) shall not 

5 apply to any State or Indian tribal government with 

6 respect to which an election is in effect under section 

7 9511(c)(3) of the Internal Revenue Code of 1986 for 

8 such State or Indian tribal government to be ex9 cluded from the receipt of funds from the State and 

10 Indian Tribal Government Gaming License Fee 

11 Trust Fund. 

12 (2) ACTIVITY NOT EXEMPT FROM TAXATION.— 

13 A State or Indian tribal government described in 

14 paragraph (1) may impose a tax on deposits or bets 

15 or wagers only if initiated or otherwise made by a 

16 person located within the jurisdiction of that State 

17 or Indian tribe at the time of the deposit, bet, or 

18 wager and placed with a licensee that is subject to 

19 the fees under section 4491 of the Internal Revenue 

20 Code of 1986, and on a licensee with respect to in21 come relating to such deposits or bets or wagers in 

22 each case (with respect to taxes on deposits, bets, or 

23 wagers and income) only if such licensee maintains 

24 a permanent physical presence in such State or with25 in the area of the jurisdiction of such Indian tribe. 


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1 (c) DEFINITIONS.—For purposes of this section— 

2 (1) IN GENERAL.—The terms ‘‘deposit’’, ‘‘bet 

3 or wager’’, and ‘‘licensee’’ have the same meaning as 

4 when used in section 4491 of the Internal Revenue 

5 Code of 1986. The terms ‘‘State’’ and ‘‘Indian tribal 

6 government’’ have the same meaning as when used 

7 in section 9511 of such Code. The term ‘‘State and 

8 Indian Tribal Government Gaming License Fee 

9 Trust Fund’’ means the Trust Fund established by 

10 section 9511(a) of such Code. 

11 (2) TAX.—The term ‘‘tax’’ includes any tax, 

12 charge, or fee levied by a taxing jurisdiction, wheth13 er such tax, charge, or fee is imposed on a licensee 

14 or on a customer of a licensee, and without regard 

15 to the terminology used to describe such tax, charge, 

16 or fee. 

17 (3) PERMANENT PHYSICAL PRESENCE.— 

18 (A) IN GENERAL.—The term ‘‘permanent 

19 physical presence’’ means a substantial and 

20 continuous physical presence for the majority of 

21 the applicable taxable year. Such determination 

22 shall be made solely by reference to the assets 

23 of a licensee and the activities conducted by its 

24 employees or agents. 


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1 (B) PRESENCE IN INDIAN TRIBE NOT TO

2 AFFECT STATE PRESENCE.—If a licensee has 

3 permanent physical presence within the area of 

4 jurisdiction of an Indian tribal government for 

5 purposes of this section, such presence shall not 

6 be deemed to constitute permanent physical 

7 presence in any State in which such area of ju8 risdiction is located or partially located. 

9 (d) EFFECTIVE DATE.—This section shall apply to 

10 taxes on deposits and bets or wagers after the date of the 

11 enactment of this Act. 

12 SEC. 208. TERRITORIAL EXTENT OF WAGERING TAX. 

13 (a) IN GENERAL.—Paragraph (2) of section 4404 is 

14 amended— 

15 (1) by striking ‘‘or’’ at the end of subparagraph 

16 (A); 

17 (2) by striking the period at the end of sub18 paragraph (B) and inserting ‘‘, or’’; and 

19 (3) by adding at the end the following new sub20 paragraph: 

21 ‘‘(C) with a person who is required to be 

22 licensed (whether or not such person is so li23 censed) under section 5382(b)(1) of title 31, 

24 United States Code, with respect to such wa25 gers.’’. 


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1 (b) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to wagers made after the date of 

3 the enactment of this Act. 

4 TITLE III—STUDY AND PREVEN5 TION OF PROBLEM AND 

6 PATHOLOGICAL GAMBLING 

7 SEC. 301. AUTHORIZATION OF PROGRAMS FOR IDENTIFICA8 TION, PREVENTION, AND TREATMENT OF 

9 PROBLEM AND PATHOLOGICAL GAMBLING. 

10 Section 501(d) of the Public Health Service Act (42 

11 U.S.C. 290aa(d)) is amended— 

12 (1) in paragraph (17), by striking ‘‘and’’ at the 

13 end; 

14 (2) in paragraph (18), by striking the period at 

15 the end and inserting ‘‘; and’’; and 

16 (3) by adding at the end the following: 

17 ‘‘(19) establish and implement programs for the 

18 identification, prevention, and treatment of problem 

19 and pathological gambling.’’. 

20 SEC. 302. PUBLIC AWARENESS, RESEARCH, AND TREAT21 MENT. 

22 Section 501 of the Public Health Service Act (42 

23 U.S.C. 290aa) is amended by adding at the end the fol24 lowing: 

25 ‘‘(p) PUBLIC AWARENESS.— 


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1 ‘‘(1) IN GENERAL.—The Secretary shall carry 

2 out a national campaign to increase knowledge and 

3 improve awareness with respect to problem gambling 

4 within the general public, including supporting and 

5 augmenting existing national campaigns. 

6 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.— 

7 For the purpose of carrying out this subsection, 

8 there is authorized to be appropriated $200,000 for 

9 each of fiscal years 2010 through 2014. 

10 ‘‘(q) RESEARCH.— 

11 ‘‘(1) IN GENERAL.—The President shall estab12 lish and implement a national program of research 

13 on problem and pathological gambling. 

14 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.— 

15 For the purpose of carrying out this subsection, 

16 there is authorized to be appropriated $4,000,000 

17 for each of fiscal years 2010 through 2014. 

18 ‘‘(r) TREATMENT.— 

19 ‘‘(1) GRANTS.—The Secretary may make 

20 grants to States, local governments, and nonprofit 

21 agencies to provide comprehensive education, preven22 tion, and treatment services with respect to problem 

23 and pathological gambling. 

24 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.— 

25 For the purpose of carrying out this subsection, 


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1 there is authorized to be appropriated $10,000,000 

2 for each of fiscal years 2010 through 2014.’’. 

Æ 


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