Calendar No. 158

106TH CONGRESS

1ST SESSION S. 692

A BILL

To prohibit Internet gambling, and for other

purposes.

JUNE 17, 1999

Reported with an amendment
II

Calendar No. 158

106TH CONGRESS

1ST SESSION S. 692

To prohibit Internet gambling, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MARCH 23, 1999

Mr. KYL (for himself, Mr. BRYAN, Mr. GRASSLEY, Mrs. FEINSTEIN, Mr. GORTON, Mr. ENZI, Mr. NICKLES, Mr. THURMOND, Mr. MACK, Mr. COVERDELL, Mr. SANTORUM, Mr. REID, Mr. SMITH of New Hampshire, Mr.

HUTCHINSON, Mr. ALLARD, Mr. BOND, Mr. LOTT, Mr. JOHNSON, Mr.

VOINOVICH, Mr. DEWINE, Mr. BROWNBACK, Mr. BUNNING, and Mr.

TORRICELLI) introduced the following bill; which was read twice and referred to the Committee on the Judiciary

JUNE 17, 1999

Reported by Mr. HATCH, with an amendment

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

A BILL

To prohibit Internet gambling, 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.

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

5 Prohibition Act of 1999’’.
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1 SEC. 2. PROHIBITION ON INTERNET GAMBLING.

2 (a) IN GENERAL.—Chapter 50 of title 18, United

3 States Code, is amended by adding at the end the fol4 lowing:

5 ‘‘§ 1085. Internet gambling

6 ‘‘(a) DEFINITIONS.—In this section:

7 ‘‘(1) BETS OR WAGERS.—The term ‘bets or

8 wagers’—

9 ‘‘(A) means the staking or risking by any

10 person of something of value upon the outcome

11 of a contest of others, a sporting event, or a

12 game of chance, upon an agreement or under13 standing that the person or another person will

14 receive something of value based on that out15 come;

16 ‘‘(B) includes the purchase of a chance or

17 opportunity to win a lottery or other prize

18 (which opportunity to win is predominantly sub19 ject to chance);

20 ‘‘(C) includes any scheme of a type de21 scribed in section 3702 of title 28, United

22 States Code; and

23 ‘‘(D) does not include—

24 ‘‘(i) a bona fide business transaction

25 governed by the securities laws (as that

26 term is defined in section 3(a)(47) of the
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1 Securities Exchange Act of 1934 (15

2 U.S.C. 78c(a)(47))) for the purchase or

3 sale at a future date of securities (as that

4 term is defined in section 3(a)(10) of the

5 Securities Exchange Act of 1934 (15

6 U.S.C. 78c(a)(10)));

7 ‘‘(ii) a transaction on or subject to the

8 rules of a contract market designated pur9 suant to section 5 of the Commodity Ex10 change Act (7 U.S.C. 7);

11 ‘‘(iii) a contract of indemnity or guar12 antee; or

13 ‘‘(iv) a contract for life, health, or ac14 cident insurance.

15 ‘‘(2) CLOSED-LOOP SUBSCRIBER-BASED SERV16 ICE.—The term ‘closed-loop subscriber-based service’

17 means any information service or system that uses—

18 ‘‘(A) a device or combination of devices—

19 ‘‘(i) expressly authorized and operated

20 in accordance with the laws of a State, ex21 clusively for placing, receiving, or otherwise

22 making a bet or wager described in sub23 section (d)(1)(B); and

24 ‘‘(ii) by which a person located within

25 any State must subscribe to be authorized
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1 to place, receive, or otherwise make a bet

2 or wager, and must be physically located

3 within that State in order to be authorized

4 to do so;

5 ‘‘(B) an effective customer verification and

6 age verification system, expressly authorized

7 and operated in accordance with the laws of the

8 State in which it is located, to ensure that all

9 applicable Federal and State legal and regu10 latory requirements for lawful gambling are

11 met; and

12 ‘‘(C) appropriate data security standards

13 to prevent unauthorized access by any person

14 who has not subscribed or who is a minor.

15 ‘‘(3) FOREIGN JURISDICTION.—The term ‘for16 eign jurisdiction’ means a jurisdiction of a foreign

17 country or political subdivision thereof.

18 ‘‘(4) GAMBLING BUSINESS.—The term ‘gam19 bling business’ means a business that is conducted

20 at a gambling establishment, or that—

21 ‘‘(A) involves—

22 ‘‘(i) the placing, receiving, or other23 wise making of bets or wagers; or
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1 ‘‘(ii) the offering to engage in the

2 placing, receiving, or otherwise making of

3 bets or wagers;

4 ‘‘(B) involves 1 or more persons who con5 duct, finance, manage, supervise, direct, or own

6 all or part of such business; and

7 ‘‘(C) has been or remains in substantially

8 continuous operation for a period in excess of

9 10 days or has a gross revenue of $2,000 or

10 more from such business during any 24-hour

11 period.

12 ‘‘(5) INFORMATION ASSISTING IN THE PLACING

13 OF A BET OR WAGER.—The term ‘information as14 sisting in the placing of a bet or wager’—

15 ‘‘(A) means information that is intended

16 by the sender or recipient to be used by a per17 son engaged in the business of betting or wa18 gering to accept or place a bet or wager; and

19 ‘‘(B) does not include—

20 ‘‘(i) information concerning pari21 mutuel pools that is exchanged exclusively

22 between or among 1 or more racetracks or

23 other parimutuel wagering facilities li24 censed by the State or approved by the for25 eign jurisdiction in which the facility is lo-
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1 cated, and 1 or more parimutuel wagering

2 facilities licensed by the State or approved

3 by the foreign jurisdiction in which the fa4 cility is located, if that information is used

5 only to conduct common pool parimutuel

6 pooling under applicable law;

7 ‘‘(ii) information exchanged exclu8 sively between or among 1 or more race9 tracks or other parimutuel wagering facili10 ties licensed by the State or approved by

11 the foreign jurisdiction in which the facility

12 is located, and a support service located in

13 another State or foreign jurisdiction, if the

14 information is used only for processing

15 bets or wagers made with that facility

16 under applicable law;

17 ‘‘(iii) information exchanged exclu18 sively between or among 1 or more wager19 ing facilities that are located within a sin20 gle State and are licensed and regulated by

21 that State, and any support service, wher22 ever located, if the information is used only

23 for the pooling or processing of bets or wa24 gers made by or with the facility or facili25 ties under applicable State law;
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1 ‘‘(iv) any news reporting or analysis

2 of wagering activity, including odds, racing

3 or event results, race and event schedules,

4 or categories of wagering; or

5 ‘‘(v) any posting or reporting of any

6 educational information on how to make a

7 bet or wager or the nature of betting or

8 wagering.

9 ‘‘(6) INTERACTIVE COMPUTER SERVICE.—The

10 term ‘interactive computer service’ means any infor11 mation service, system, or access software provider

12 that uses a public communication infrastructure or

13 operates in interstate or foreign commerce to provide

14 or enable computer access by multiple users to a

15 computer server, including specifically a service or

16 system that provides access to the Internet.

17 ‘‘(7) INTERNET.—The term ‘Internet’ means

18 the international computer network of both Federal

19 and non-Federal interoperable packet switched data

20 networks.

21 ‘‘(8) PERSON.—The term ‘person’ means any

22 individual, association, partnership, joint venture,

23 corporation, State or political subdivision thereof,

24 department, agency, or instrumentality of a State or

25 political subdivision thereof, or any other govern-
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1 ment, organization, or entity (including any govern2 mental entity (as defined in section 3701(2) of title

3 28, United States Code)).

4 ‘‘(9) PRIVATE NETWORK.—The term ‘private

5 network’ means a communications channel or chan6 nels, including voice or computer data transmission

7 facilities, that use either—

8 ‘‘(A) private dedicated lines; or

9 ‘‘(B) the public communications infrastruc10 ture, if the infrastructure is secured by means

11 of the appropriate private communications tech12 nology to prevent unauthorized access.

13 ‘‘(10) STATE.—The term ‘State’ means a State

14 of the United States, the District of Columbia, the

15 Commonwealth of Puerto Rico, or a commonwealth,

16 territory, or possession of the United States.

17 ‘‘(11) SUBSCRIBER.—The term ‘subscriber’—

18 ‘‘(A) means any person with a business re19 lationship with the interactive computer service

20 provider through which such person receives ac21 cess to the system, service, or network of that

22 provider, even if no formal subscription agree23 ment exists; and

24 ‘‘(B) includes registrants, students who are

25 granted access to a university system or net-
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1 work, and employees who are granted access to

2 the system or network of their employer.

3 ‘‘(b) GAMBLING BUSINESSES.—

4 ‘‘(1) PROHIBITION.—Subject to subsection (d),

5 it shall be unlawful for a person engaged in a gam6 bling business to use the Internet or any other inter7 active computer service—

8 ‘‘(A) to place, receive, or otherwise make a

9 bet or wager; or

10 ‘‘(B) to send, receive, or invite information

11 assisting in the placing of a bet or wager.

12 ‘‘(2) PENALTIES.—A person engaged in a gam13 bling business who violates paragraph (1) shall be—

14 ‘‘(A) fined in an amount equal to not more

15 than the greater of—

16 ‘‘(i) the amount that such person re17 ceived in bets or wagers as a result of en18 gaging in that business in violation of this

19 subsection; or

20 ‘‘(ii) $20,000;

21 ‘‘(B) imprisoned not more than 4 years; or

22 ‘‘(C) both.

23 ‘‘(c) PERMANENT INJUNCTIONS.—Upon conviction of

24 a person under this section, the court may, as an addi25 tional penalty, enter a permanent injunction enjoining the
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1 transmission of bets or wagers or information assisting in

2 the placing of a bet or wager.

3 ‘‘(d) APPLICABILITY.—

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

5 the prohibition in this section does not apply to—

6 ‘‘(A) any otherwise lawful bet or wager

7 that is placed, received, or otherwise made

8 wholly intrastate for a State lottery, or for a

9 multi-State lottery operated jointly between 2

10 or more States in conjunction with State lot11 teries if—

12 ‘‘(i) each such lottery is expressly au13 thorized, and licensed or regulated, under

14 applicable State law;

15 ‘‘(ii) the bet or wager is placed on an

16 interactive computer service that uses a

17 private network;

18 ‘‘(iii) each person placing or otherwise

19 making that bet or wager is physically lo20 cated when such bet or wager is placed at

21 a facility that is open to the general public;

22 and

23 ‘‘(iv) each such lottery complies with

24 sections 1301 through 1304 of title 18,
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1 United States Code, and other applicable

2 provisions of Federal law;

3 ‘‘(B) any otherwise lawful bet or wager

4 that is placed, received, or otherwise made on

5 an interstate or intrastate basis on a live horse

6 race, or the sending, receiving, or inviting of in7 formation assisting in the placing of such a bet

8 or wager, if such bet or wager, or the trans9 mission of such information, as applicable, is—

10 ‘‘(i) expressly authorized, and licensed

11 or regulated by the State in which such bet

12 or wager is received, under applicable Fed13 eral and such State’s laws;

14 ‘‘(ii) placed on a closed-loop sub15 scriber-based service;

16 ‘‘(iii) initiated from a State in which

17 betting or wagering on that same type of

18 live horse racing is lawful and received in

19 a State in which such betting or wagering

20 is lawful;

21 ‘‘(iv) subject to the regulatory over22 sight of the State in which the bet or

23 wager is received and subject by such

24 State to minimum control standards for

25 the accounting, regulatory inspection, and
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1 auditing of all such bets or wagers trans2 mitted from 1 State to another; and

3 ‘‘(v) made in accordance with the

4 Interstate Horse Racing Act of 1978 (15

5 U.S.C. 3001 et seq.); or

6 ‘‘(C) any otherwise lawful bet or wager

7 that is placed, received, or otherwise made for

8 a fantasy sports league game or contest.

9 ‘‘(2) INAPPLICABILITY TO BETS OR WAGERS

10 MADE BY AGENTS OR PROXIES.—

11 ‘‘(A) IN GENERAL.—Paragraph (1)(A)

12 does not apply in any case in which a bet or

13 wager is placed, received, or otherwise made by

14 the use of an agent or proxy using the Internet

15 or an interactive computer service.

16 ‘‘(B) RULE OF CONSTRUCTION.—Nothing

17 in this paragraph may be construed to prohibit

18 the owner operator of a parimutuel wagering

19 facility that is licensed by a State from employ20 ing an agent in the operation of the account

21 wagering system owned or operated by the pari22 mutuel facility.’’.

23 (b) TECHNICAL AMENDMENT.—The analysis for

24 chapter 50 of title 18, United States Code, is amended

25 by adding at the end the following:

‘‘1085. Internet gambling.’’.
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1 SEC. 3. CIVIL REMEDIES.

2 (a) IN GENERAL.—

3 (1) JURISDICTION.—The district courts of the

4 United States shall have original, exclusive, and con5 tinuing jurisdiction to prevent and restrain violations

6 of section 1085 of title 18, United States Code, as

7 added by section 2 of this Act, by issuing appro8 priate orders in accordance with this section, regard9 less of whether a prosecution has been initiated

10 under that section.

11 (2) PROCEEDINGS.—

12 (A) INSTITUTION BY FEDERAL GOVERN13 MENT.—

14 (i) IN GENERAL.—The United States

15 may institute proceedings under this sub16 section to prevent or restrain a violation of

17 section 1085 of title 18, United States

18 Code.

19 (ii) RELIEF.—Upon application of the

20 United States under this subparagraph,

21 the district court may enter a temporary

22 restraining order or an injunction against

23 any person to prevent a violation of section

24 1085 of title 18, United States Code, if the

25 court determines, after notice and an op26 portunity for a hearing, that there is a
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1 substantial probability that such violation

2 has occurred or will occur.

3 (B) INSTITUTION BY STATE ATTORNEY

4 GENERAL.—

5 (i) IN GENERAL.—The attorney gen6 eral of a State (or other appropriate State

7 official) in which a violation of section

8 1085 of title 18, United States Code, is al9 leged to have occurred, or may occur, after

10 providing written notice to the United

11 States, may institute proceedings under

12 this subsection to prevent or restrain the

13 violation, unless the United States has ex14 clusive jurisdiction over the violation under

15 Federal law.

16 (ii) RELIEF.—Upon application of the

17 attorney general (or other appropriate

18 State official) of an affected State under

19 this subparagraph, the district court may

20 enter a temporary restraining order or an

21 injunction against any person to prevent a

22 violation of section 1085 of title 18, United

23 States Code, if the court determines, after

24 notice and an opportunity for a hearing,
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1 that there is a substantial probability that

2 such violation has occurred or will occur.

3 (C) EXPIRATION.—Any temporary re4 straining order or preliminary injunction en5 tered pursuant to subparagraph (A) or (B)

6 shall expire if, and as soon as, the United

7 States, or the attorney general (or other appro8 priate State official) of the State, as applicable,

9 notifies the court that issued the injunction that

10 the United States or the State, as applicable,

11 will not seek a permanent injunction.

12 (3) EXPEDITED PROCEEDINGS.—

13 (A) IN GENERAL.—In addition to any pro14 ceeding under paragraph (2), a district court

15 may enter a temporary restraining order

16 against a person alleged to be in violation of

17 section 1085 of title 18, United States Code,

18 upon application of the United States under

19 paragraph (2)(A) of this subsection, or the at20 torney general (or other appropriate State offi21 cial) of an affected State under paragraph

22 (2)(B) of this subsection, without notice and

23 the opportunity for a hearing, if the United

24 States or the State, as applicable, demonstrates

25 that there is probable cause to believe that the
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1 use of the Internet or other interactive com2 puter service at issue violates section 1085 of

3 title 18, United States Code.

4 (B) EXPIRATION.—A temporary restrain5 ing order entered under this paragraph shall ex6 pire on the earlier of—

7 (i) the expiration of the 30-day period

8 beginning on the date on which the order

9 is entered; or

10 (ii) the date on which a preliminary

11 injunction is granted or denied.

12 (C) HEARINGS.—A hearing requested con13 cerning an order entered under this paragraph

14 shall be held at the earliest practicable time.

15 (b) INTERACTIVE COMPUTER SERVICE PRO16 VIDERS.—

17 (1) ELIGIBILITY.—For purposes of this sub18 section, an interactive computer service provider is

19 described in this paragraph only if the provider has

20 established and reasonably implements a policy that

21 provides for the termination of the account of a sub22 scriber of the service system or network of the pro23 vider upon the receipt by the provider of a notice de24 scribed in paragraph (4)(B).
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1 (2) USE OF FACILITIES OR SERVICES.—Nothing

2 in section 1085 of title 18, United States Code, may

3 be constructed to impose, or to provide any basis

4 for, liability against an interactive computer service

5 provider described in paragraph (1) whose facilities

6 or services are used by another person to engage in

7 an activity prohibited by that section—

8 (A) arising out of any transmitting, rout9 ing, or providing of connections for the material

10 or activity (including intermediate and tem11 porary storage in the course of such transmit12 ting, routing, or providing connections) by the

13 provider, if—

14 (i) the material or activity was initi15 ated by or at the direction of a person

16 other than the provider;

17 (ii) the transmitting, routing, or pro18 viding of connections is carried out

19 through an automatic process without se20 lection of the material or activity by the

21 provider;

22 (iii) the provider does not select the

23 recipients of the material or activity, ex24 cept as an automatic response to the re25 quest of another person; and
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1 (iv) the material or activity is trans2 mitted through the system or network of

3 the provider without modification of its

4 content; or

5 (B) with respect to material or activity at

6 an online site residing on a computer server

7 owned, controlled, or operated by or for the pro8 vider, unless the provider fails to comply within

9 a reasonable time with a notification under

10 paragraph (4) with respect to the particular

11 material or activity at issue.

12 (3) PROTECTION OF PRIVACY.—Nothing in this

13 section or in section 1085 of title 18, United States

14 Code, may be construed to impose or authorize an

15 obligation on an interactive computer service de16 scribed in paragraph (1) to—

17 (A) monitor material or use of its service;

18 or

19 (B) except as required by an order of a

20 court, to gain access to, to remove, or to disable

21 access to material in any case in which such

22 conduct is prohibited by law.

23 (4) NOTICE TO INTERACTIVE COMPUTER SERV24 ICE PROVIDERS.—
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1 (A) IN GENERAL.—If an interactive com2 puter service provider receives from a Federal

3 or State law enforcement agency, acting within

4 its jurisdiction, a written or electronic notice

5 described in subparagraph (B), that a par6 ticular online site residing on a computer server

7 owned, controlled, or operated by or for the pro8 vider is being used to violate section 1085 of

9 title 18, United States Code, the provider shall

10 not be liable under any Federal or State law if,

11 in a reasonably expeditious manner—

12 (i) the provider removes or disables

13 access to the material or activity residing

14 at that online site that allegedly violates

15 that section; or

16 (ii) if the provider does not own, oper17 ate, or control the site at which the subject

18 material or activity resides, the provider

19 notifies the Federal or State law enforce20 ment agency that—

21 (I) the provider is not the proper

22 recipient of such notice; and

23 (II) upon receipt of a subpoena,

24 the provider will cooperate with the

25 Federal or State law enforcement
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1 agency in identifying the person or

2 persons who control the site.

3 (B) NOTICE.—A notice is described in this

4 subparagraph if it—

5 (i) identifies the material or activity

6 that allegedly violates section 1085 of title

7 18, United States Code;

8 (ii) provides information reasonably

9 sufficient to permit the provider to locate

10 the material or activity;

11 (iii) is supplied to any agent of a pro12 vider designated under section 512 of title

13 17, United States Code, if information re14 garding such designation is readily avail15 able to the public; and

16 (iv) provides information that is rea17 sonably sufficient to permit the provider to

18 contact the law enforcement agency that

19 issued the notice, including—

20 (I) the name of the law enforce21 ment agency; and

22 (II) the name and telephone

23 number of an individual to contact at

24 the law enforcement agency, and, if
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1 available, the electronic mail address

2 of that individual.

3 (5) INJUNCTIVE RELIEF.—

4 (A) IN GENERAL.—Except as provided in

5 subparagraph (B), a Federal or State law en6 forcement agency acting within its jurisdiction,

7 may, following the issuance of a notice to an

8 interactive computer service provider under

9 paragraph (4), in a civil action, obtain an in10 junction or other appropriate relief to prevent

11 the use of the interactive computer service in

12 violation of Federal or State law.

13 (B) OTHER LIMITATIONS.—In the case of

14 any application for an injunction against an

15 interactive computer service provider to prevent

16 a violation of section 1085 of title 18, United

17 States Code—

18 (i) arising out of the transmitting,

19 routing, or providing of connections by the

20 provider for material or activity that is

21 prohibited by section 1085 of title 18,

22 United States Code, or performing the in23 termediate and temporary storage of such

24 material or activity in the course of such

25 transmitting, routing, or providing of con-
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1 nections, the injunctive relief is limited

2 to—

3 (I) an order restraining the pro4 vider from providing access to an

5 identified subscriber of the system or

6 network of the interactive computer

7 service provider, who is using that ac8 cess to violate section 1085 of title 18,

9 United States Code (or whose use of

10 that access involves a violation of sec11 tion 1085 of title 18, United States

12 Code, by another person), by termi13 nating the specified account of that

14 subscriber; and

15 (II) an order restraining the pro16 vider from providing access, by taking

17 reasonable steps specified in the order

18 to block access, to a specific, identi19 fied, foreign online location;

20 (ii) with respect to conduct other than

21 that which qualifies for the limitation on

22 remedies set forth in clause (i), the injunc23 tive relief is limited to—

24 (I) an order restraining the pro25 vider from providing access to a mate-
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1 rial or activity that violates section

2 1085 of title 18, United States Code,

3 at a particular online site residing on

4 a computer server, owned, operated,

5 or controlled by the provider;

6 (II) an order restraining the pro7 vider from providing access to a sub8 scriber of the system or network of

9 the interactive computer service, who

10 is identified in the order and who is

11 using such service in violation of sec12 tion 1085 of title 18, United States

13 Code, by terminating the specified ac14 count of that subscriber; or

15 (III) such other injunctive rem16 edies as the court considers necessary

17 to prevent or restrain access to speci18 fied material or activity that is pro19 hibited by section 1085 of title 18,

20 United States Code, at a particular

21 online location residing on a computer

22 server owned, operated, or controlled

23 by the provider, that are the least

24 burdensome to the provider among the
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1 forms of relief that are comparably ef2 fective for that purpose.

3 (C) CONSIDERATIONS.—The court, in de4 termining appropriate injunctive relief under

5 this paragraph, shall consider—

6 (i) whether such an injunction, either

7 alone or in combination with other such in8 junctions issued against the same provider

9 (under section 1085 of title 18, United

10 States Code, or under this section) would

11 significantly burden either the provider or

12 the operation of the system or network of

13 the provider;

14 (ii) whether implementation of such

15 an injunction would be technically feasible

16 and effective, and would not unreasonably

17 interfere with access to lawful material at

18 other online locations;

19 (iii) whether other less burdensome

20 and comparably effective means of pre21 venting or restraining access to the illegal

22 material or activity are available; and

23 (iv) the magnitude of the harm likely

24 to be suffered by the community if the in25 junction is not granted.
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1 (D) NOTICE AND EX PARTE ORDERS.—In2 junctive relief under this paragraph shall not be

3 available without notice to the service provider

4 and an opportunity for such provider to appear

5 before the court, except for orders ensuring the

6 preservation of evidence or other orders having

7 no material adverse effect on the operation of

8 the communications network of the service pro9 vider.

10 (6) EFFECT ON OTHER LAW.—

11 (A) PREEMPTION OF STATE LAW.—An

12 interactive computer service provider described

13 in paragraph (1) shall not be liable under any

14 State law prohibiting or regulating gambling, or

15 subject to any injunctive relief under any such

16 State law, in connection with the use of the

17 interactive computer service of that provider by

18 any person in interstate or affecting commerce.

19 (B) IMMUNITY FROM LIABILITY.—In the

20 absence of fraud or bad faith, an interactive

21 computer service provider described in para22 graph (1) shall not be liable for any damages,

23 penalty, or forfeiture, civil or criminal, under

24 Federal or State law for—
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1 (i) taking any action described in

2 paragraph (1) or paragraph 4(A) to com3 ply with a notice described in paragraph

4 (4)(B); or

5 (ii) complying with any court order

6 issued under paragraph (5).

7 (c) RELATIONSHIP TO OTHER REMEDIES.—

8 (1) IN GENERAL.—Except as provided in sub9 section (b)(6), nothing in this section may be con10 strued to affect any remedy under section 1085 of

11 title 18, United States Code, or under any other

12 provision of Federal or State law.

13 (2) AVAILABILITY OF RELIEF.—The availability

14 of relief under this section shall not depend on, or

15 be affected by, the initiation or resolution of any ac16 tion under section 1085 of title 18, United States

17 Code, or under any other provision of Federal or

18 State law.

19 SEC. 4. RULE OF CONSTRUCTION.

20 Except as provided in section 3(b)(6) of this Act,

21 nothing in this Act or in section 1085 of title 18, United

22 States Code, as added by section 2 of this Act, may be

23 construed otherwise to affect any prohibition or remedy

24 relating to gambling that is imposed under any other pro25 vision of Federal or State law.
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1 SEC. 5. REPORT ON ENFORCEMENT.

2 Not later than 3 years after the date of enactment

3 of this Act, the Attorney General shall submit to Congress

4 a report, which shall include—

5 (1) an analysis of the problems, if any, associ6 ated with enforcing section 1085 of title 18, United

7 States Code, as added by section 2 of this Act;

8 (2) recommendations for the best use of the re9 sources of the Department of Justice to enforce that

10 section; and

11 (3) an estimate of the amount of activity and

12 money being used to gamble on the Internet.

13 SEC. 6. SEVERABILITY.

14 If any provision of this Act, an amendment made by

15 this Act, or the application of such provision or amend16 ment to any person or circumstance is held to be uncon17 stitutional, the remainder of this Act, the amendments

18 made by this Act, and the application of the provisions

19 of such to any person or circumstance shall not be affected

20 thereby.

21 SECTION 1. SHORT TITLE.

22 This Act may be cited as the ‘‘Internet Gambling Pro23 hibition Act of 1999’’.

24 SEC. 2. PROHIBITION ON INTERNET GAMBLING.

25 (a) IN GENERAL.—Chapter 50 of title 18, United

26 States Code, is amended by adding at the end the following:
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1 ‘‘§ 1085. Internet gambling

2 ‘‘(a) DEFINITIONS.—In this section:

3 ‘‘(1) BETS OR WAGERS.—The term ‘bets or

4 wagers’—

5 ‘‘(A) means the staking or risking by any

6 person of something of value upon the outcome of

7 a contest of others, a sporting event, or a game

8 of chance, upon an agreement or understanding

9 that the person or another person will receive

10 something of value based on that outcome;

11 ‘‘(B) includes the purchase of a chance or

12 opportunity to win a lottery or other prize

13 (which opportunity to win is predominantly

14 subject to chance);

15 ‘‘(C) includes any scheme of a type de16 scribed in section 3702 of title 28; and

17 ‘‘(D) does not include—

18 ‘‘(i) a bona fide business transaction

19 governed by the securities laws (as that

20 term is defined in section 3(a)(47) of the

21 Securities Exchange Act of 1934 (15 U.S.C.

22 78c(a)(47))) for the purchase or sale at a

23 future date of securities (as that term is de24 fined in section 3(a)(10) of the Securities

25 Exchange Act of 1934 (15 U.S.C.

26 78c(a)(10)));
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1 ‘‘(ii) a transaction on or subject to the

2 rules of a contract market designated pursu3 ant to section 5 of the Commodity Exchange

4 Act (7 U.S.C. 7);

5 ‘‘(iii) a contract of indemnity or guar6 antee; or

7 ‘‘(iv) a contract for life, health, or acci8 dent insurance.

9 ‘‘(2) CLOSED-LOOP SUBSCRIBER-BASED SERV10 ICE.—The term ‘closed-loop subscriber-based service’

11 means any information service or system that uses—

12 ‘‘(A) a device or combination of devices—

13 ‘‘(i) expressly authorized and operated

14 in accordance with the laws of a State, ex15 clusively for placing, receiving, or otherwise

16 making a bet or wager described in sub17 section (f)(1)(B); and

18 ‘‘(ii) by which a person located within

19 any State must subscribe and be registered

20 with the provider of the wagering service by

21 name, address, and appropriate billing in22 formation to be authorized to place, receive,

23 or otherwise make a bet or wager, and must

24 be physically located within that State in

25 order to be authorized to do so;
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1 ‘‘(B) an effective customer verification and

2 age verification system, expressly authorized and

3 operated in accordance with the laws of the State

4 in which it is located, to ensure that all applica5 ble Federal and State legal and regulatory re6 quirements for lawful gambling are met; and

7 ‘‘(C) appropriate data security standards to

8 prevent unauthorized access by any person who

9 has not subscribed or who is a minor.

10 ‘‘(3) FOREIGN JURISDICTION.—The term ‘foreign

11 jurisdiction’ means a jurisdiction of a foreign country

12 or political subdivision thereof.

13 ‘‘(4) GAMBLING BUSINESS.—The term ‘gambling

14 business’ means—

15 ‘‘(A) a business that is conducted at a gam16 bling establishment, or that—

17 ‘‘(i) involves—

18 ‘‘(I) the placing, receiving, or oth19 erwise making of bets or wagers; or

20 ‘‘(II) the offering to engage in the

21 placing, receiving, or otherwise making

22 of bets or wagers;

23 ‘‘(ii) involves 1 or more persons who

24 conduct, finance, manage, supervise, direct,

25 or own all or part of such business; and
31

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1 ‘‘(iii) has been or remains in substan2 tially continuous operation for a period in

3 excess of 10 days or has a gross revenue of

4 $2,000 or more from such business during

5 any 24-hour period; and

6 ‘‘(B) any soliciting agent of a business de7 scribed in subparagraph (A).

8 ‘‘(5) INFORMATION ASSISTING IN THE PLACING

9 OF A BET OR WAGER.—The term ‘information assist10 ing in the placing of a bet or wager’—

11 ‘‘(A) means information that is intended by

12 the sender or recipient to be used by a person en13 gaged in the business of betting or wagering to

14 place, receive, or otherwise make a bet or wager;

15 and

16 ‘‘(B) does not include—

17 ‘‘(i) information concerning pari18 mutuel pools that is exchanged exclusively

19 between or among 1 or more racetracks or

20 other parimutuel wagering facilities li21 censed by the State or approved by the for22 eign jurisdiction in which the facility is lo23 cated, and 1 or more parimutuel wagering

24 facilities licensed by the State or approved

25 by the foreign jurisdiction in which the fa-
32

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1 cility is located, if that information is used

2 only to conduct common pool parimutuel

3 pooling under applicable law;

4 ‘‘(ii) information exchanged exclusively

5 between or among 1 or more racetracks or

6 other parimutuel wagering facilities li7 censed by the State or approved by the for8 eign jurisdiction in which the facility is lo9 cated, and a support service located in an10 other State or foreign jurisdiction, if the in11 formation is used only for processing bets or

12 wagers made with that facility under appli13 cable law;

14 ‘‘(iii) information exchanged exclu15 sively between or among 1 or more wager16 ing facilities that are located within a sin17 gle State and are licensed and regulated by

18 that State, and any support service, wher19 ever located, if the information is used only

20 for the pooling or processing of bets or wa21 gers made by or with the facility or facili22 ties under applicable State law;

23 ‘‘(iv) any news reporting or analysis of

24 wagering activity, including odds, racing or
33

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1 event results, race and event schedules, or

2 categories of wagering; or

3 ‘‘(v) any posting or reporting of any

4 educational information on how to make a

5 bet or wager or the nature of betting or wa6 gering.

7 ‘‘(6) INTERACTIVE COMPUTER SERVICE.—The

8 term ‘interactive computer service’ means any infor9 mation service, system, or access software provider

10 that operates in, or uses a channel or instrumentality

11 of, interstate or foreign commerce to provide or enable

12 access by multiple users to a computer server, includ13 ing specifically a service or system that provides ac14 cess to the Internet.

15 ‘‘(7) INTERACTIVE COMPUTER SERVICE PRO16 VIDER.—The term ‘interactive computer service pro17 vider’ means any person that provides an interactive

18 computer service, to the extent that such person offers

19 or provides such service.

20 ‘‘(8) INTERNET.—The term ‘Internet’ means the

21 international computer network of both Federal and

22 non-Federal interoperable packet switched data net23 works.

24 ‘‘(9) PERSON.—The term ‘person’ means any in25 dividual, association, partnership, joint venture, cor-
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1 poration (or any affiliate of a corporation), State or

2 political subdivision thereof, department, agency, or

3 instrumentality of a State or political subdivision

4 thereof, or any other government, organization, or en5 tity (including any governmental entity (as defined

6 in section 3701(2) of title 28)).

7 ‘‘(10) PRIVATE NETWORK.—The term ‘private

8 network’ means a communications channel or chan9 nels, including voice or computer data transmission

10 facilities, that use either—

11 ‘‘(A) private dedicated lines; or

12 ‘‘(B) the public communications infrastruc13 ture, if the infrastructure is secured by means of

14 the appropriate private communications tech15 nology to prevent unauthorized access.

16 ‘‘(11) STATE.—The term ‘State’ means a State

17 of the United States, the District of Columbia, the

18 Commonwealth of Puerto Rico, or a commonwealth,

19 territory, or possession of the United States.

20 ‘‘(12) SUBSCRIBER.—The term ‘subscriber’—

21 ‘‘(A) means any person with a business re22 lationship with the interactive computer service

23 provider through which such person receives ac24 cess to the system, service, or network of that
35

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1 provider, even if no formal subscription agree2 ment exists; and

3 ‘‘(B) includes registrants, students who are

4 granted access to a university system or network,

5 and employees or contractors who are granted

6 access to the system or network of their employer.

7 ‘‘(b) INTERNET GAMBLING.—

8 ‘‘(1) PROHIBITION.—Subject to subsection (f), it

9 shall be unlawful for a person engaged in a gambling

10 business knowingly to use the Internet or any other

11 interactive computer service—

12 ‘‘(A) to place, receive, or otherwise make a

13 bet or wager; or

14 ‘‘(B) to send, receive, or invite information

15 assisting in the placing of a bet or wager.

16 ‘‘(2) PENALTIES.—A person engaged in a gam17 bling business who violates this section shall be—

18 ‘‘(A) fined in an amount equal to not more

19 than the greater of—

20 ‘‘(i) the total amount that such person

21 bet or wagered, or placed, received, or ac22 cepted in bets or wagers, as a result of en23 gaging in that business in violation of this

24 section; or

25 ‘‘(ii) $20,000;
36

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1 ‘‘(B) imprisoned not more than 4 years; or

2 ‘‘(C) both.

3 ‘‘(3) PERMANENT INJUNCTIONS.—Upon convic4 tion of a person under this section, the court may

5 enter a permanent injunction enjoining such person

6 from placing, receiving, or otherwise making bets or

7 wagers or sending, receiving, or inviting information

8 assisting in the placing of bets or wagers.

9 ‘‘(c) CIVIL REMEDIES.—

10 ‘‘(1) JURISDICTION.—The district courts of the

11 United States shall have original and exclusive juris12 diction to prevent and restrain violations of this sec13 tion by issuing appropriate orders in accordance with

14 this section, regardless of whether a prosecution has

15 been initiated under this section.

16 ‘‘(2) PROCEEDINGS.—

17 ‘‘(A) INSTITUTION BY FEDERAL GOVERN18 MENT.—

19 ‘‘(i) IN GENERAL.—The United States

20 may institute proceedings under this sub21 section to prevent or restrain a violation of

22 this section.

23 ‘‘(ii) RELIEF.—Upon application of

24 the United States under this subparagraph,

25 the district court may enter a temporary re-
37

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1 straining order or an injunction against

2 any person to prevent or restrain a viola3 tion of this section if the court determines,

4 after notice and an opportunity for a hear5 ing, that there is a substantial probability

6 that such violation has occurred or will

7 occur.

8 ‘‘(B) INSTITUTION BY STATE ATTORNEY

9 GENERAL.—

10 ‘‘(i) IN GENERAL.—The attorney gen11 eral of a State (or other appropriate State

12 official) in which a violation of this section

13 allegedly has occurred or will occur, after

14 providing written notice to the United

15 States, may institute proceedings under this

16 subsection to prevent or restrain the viola17 tion.

18 ‘‘(ii) RELIEF.—Upon application of

19 the attorney general (or other appropriate

20 State official) of an affected State under

21 this subparagraph, the district court may

22 enter a temporary restraining order or an

23 injunction against any person to prevent or

24 restrain a violation of this section if the

25 court determines, after notice and an oppor-
38

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1 tunity for a hearing, that there is a sub2 stantial probability that such violation has

3 occurred or will occur.

4 ‘‘(C) INDIAN LANDS.—Notwithstanding sub5 paragraphs (A) and (B), for a violation that is

6 alleged to have occurred, or may occur, on In7 dian lands (as that term is defined in section 4

8 of the Indian Gaming Regulatory Act (25 U.S.C.

9 2703))—

10 ‘‘(i) the United States shall have the

11 enforcement authority provided under sub12 paragraph (A); and

13 ‘‘(ii) the enforcement authorities speci14 fied in an applicable Tribal-State compact

15 negotiated under section 11 of the Indian

16 Gaming Regulatory Act (25 U.S.C. 2710)

17 shall be carried out in accordance with that

18 compact.

19 ‘‘(D) EXPIRATION.—Any temporary re20 straining order or preliminary injunction en21 tered pursuant to subparagraph (A) or (B) shall

22 expire if, and as soon as, the United States, or

23 the attorney general (or other appropriate State

24 official) of the State, as applicable, notifies the

25 court that issued the order or injunction that the
39

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1 United States or the State, as applicable, will

2 not seek a permanent injunction.

3 ‘‘(3) EXPEDITED PROCEEDINGS.—

4 ‘‘(A) IN GENERAL.—In addition to any pro5 ceeding under paragraph (2), a district court

6 may, in exigent circumstances, enter a tem7 porary restraining order against a person al8 leged to be in violation of this section upon ap9 plication of the United States under paragraph

10 (2)(A), or the attorney general (or other appro11 priate State official) of an affected State under

12 paragraph (2)(B), without notice and the oppor13 tunity for a hearing as provided in rule 65(b) of

14 the Federal Rules of Civil Procedure (except as

15 provided in subsection (d)(3)), if the United

16 States or the State, as applicable, demonstrates

17 that there is probable cause to believe that the

18 use of the Internet or other interactive computer

19 service at issue violates this section.

20 ‘‘(B) HEARINGS.—A hearing requested con21 cerning an order entered under this paragraph

22 shall be held at the earliest practicable time.

23 ‘‘(d) INTERACTIVE COMPUTER SERVICE PROVIDERS.—

24 ‘‘(1) IMMUNITY FROM LIABILITY FOR USE BY AN25 OTHER.—
40

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1 ‘‘(A) IN GENERAL.—An interactive com2 puter service provider described in subparagraph

3 (B) shall not be liable, under this section or any

4 other provision of Federal or State law prohib5 iting or regulating gambling or gambling-related

6 activities, for the use of its facilities or services

7 by another person to engage in Internet gam8 bling activity that violates such law—

9 ‘‘(i) arising out of any transmitting,

10 routing, or providing of connections for

11 gambling-related material or activity (in12 cluding intermediate and temporary storage

13 in the course of such transmitting, routing,

14 or providing connections) by the provider,

15 if—

16 ‘‘(I) the material or activity was

17 initiated by or at the direction of a

18 person other than the provider;

19 ‘‘(II) the transmitting, routing, or

20 providing of connections is carried out

21 through an automatic process without

22 selection of the material or activity by

23 the provider;

24 ‘‘(III) the provider does not select

25 the recipients of the material or activ-
41

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1 ity, except as an automatic response to

2 the request of another person; and

3 ‘‘(IV) the material or activity is

4 transmitted through the system or net5 work of the provider without modifica6 tion of its content; or

7 ‘‘(ii) arising out of any gambling-re8 lated material or activity at an online site

9 residing on a computer server owned, con10 trolled, or operated by or for the provider,

11 or arising out of referring or linking users

12 to an online location containing such mate13 rial or activity, if the material or activity

14 was initiated by or at the direction of a

15 person other than the provider, unless the

16 provider fails to take expeditiously, with re17 spect to the particular material or activity

18 at issue, the actions described in paragraph

19 (2)(A) following the receipt by the provider

20 of a notice described in paragraph (2)(B).

21 ‘‘(B) ELIGIBILITY.—An interactive com22 puter service provider is described in this sub23 paragraph only if the provider—

24 ‘‘(i) maintains and implements a writ25 ten or electronic policy that requires the
42

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1 provider to terminate the account of a sub2 scriber of its system or network expedi3 tiously following the receipt by the provider

4 of a notice described in paragraph (2)(B)

5 alleging that such subscriber has violated or

6 is violating this section; and

7 ‘‘(ii) with respect to the particular ma8 terial or activity at issue, has not know9 ingly permitted its computer server to be

10 used to engage in activity that the provider

11 knows is prohibited by this section, with the

12 specific intent that such server be used for

13 such purpose.

14 ‘‘(2) NOTICE TO INTERACTIVE COMPUTER SERV15 ICE PROVIDERS.—

16 ‘‘(A) IN GENERAL.—If an interactive com17 puter service provider receives from a Federal or

18 State law enforcement agency, acting within its

19 authority and jurisdiction, a written or elec20 tronic notice described in subparagraph (B), that

21 a particular online site residing on a computer

22 server owned, controlled, or operated by or for

23 the provider is being used by another person to

24 violate this section, the provider shall

25 expeditiously—
43

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1 ‘‘(i) remove or disable access to the ma2 terial or activity residing at that online site

3 that allegedly violates this section; or

4 ‘‘(ii) in any case in which the provider

5 does not control the site at which the subject

6 material or activity resides, the provider,

7 through any agent of the provider des8 ignated in accordance with section

9 512(c)(2) of title 17, or other responsible

10 identified employee or contractor—

11 ‘‘(I) notify the Federal or State

12 law enforcement agency that the pro13 vider is not the proper recipient of

14 such notice; and

15 ‘‘(II) upon receipt of a subpoena,

16 cooperate with the Federal or State law

17 enforcement agency in identifying the

18 person or persons who control the site.

19 ‘‘(B) NOTICE.—A notice is described in this

20 subparagraph only if it—

21 ‘‘(i) identifies the material or activity

22 that allegedly violates this section, and al23 leges that such material or activity violates

24 this section;
44

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1 ‘‘(ii) provides information reasonably

2 sufficient to permit the provider to locate

3 (and, as appropriate, in a notice issued

4 pursuant to paragraph (3)(A) to block ac5 cess to) the material or activity;

6 ‘‘(iii) is supplied to any agent of a

7 provider designated in accordance with sec8 tion 512(c)(2) of title 17, if information re9 garding such designation is readily avail10 able to the public;

11 ‘‘(iv) provides information that is rea12 sonably sufficient to permit the provider to

13 contact the law enforcement agency that

14 issued the notice, including the name of the

15 law enforcement agency, and the name and

16 telephone number of an individual to con17 tact at the law enforcement agency (and, if

18 available, the electronic mail address of that

19 individual); and

20 ‘‘(v) declares under penalties of perjury

21 that the person submitting the notice is an

22 official of the law enforcement agency de23 scribed in clause (iv).

24 ‘‘(3) INJUNCTIVE RELIEF.—
45

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

2 State law enforcement agency acting within its

3 authority and jurisdiction, may, not less than 24

4 hours following the issuance to an interactive

5 computer service provider of a notice described

6 in paragraph (2)(B), in a civil action, obtain a

7 temporary restraining order, or an injunction to

8 prevent the use of the interactive computer serv9 ice by another person in violation of this section.

10 ‘‘(B) LIMITATIONS.—Notwithstanding any

11 other provision of this section, in the case of any

12 application for a temporary restraining order or

13 an injunction against an interactive computer

14 service provider described in paragraph (1)(B) to

15 prevent a violation of this section—

16 ‘‘(i) arising out of activity described in

17 paragraph (1)(A)(i), the injunctive relief is

18 limited to—

19 ‘‘(I) an order restraining the pro20 vider from providing access to an iden21 tified subscriber of the system or net22 work of the interactive computer serv23 ice provider, if the court determines

24 that there is probable cause to believe

25 that such subscriber is using that ac-
46

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1 cess to violate this section (or to engage

2 with another person in a communica3 tion that violates this section), by ter4 minating the specified account of that

5 subscriber; and

6 ‘‘(II) an order restraining the

7 provider from providing access, by tak8 ing reasonable steps specified in the

9 order to block access, to a specific,

10 identified, foreign online location;

11 ‘‘(ii) arising out of activity described

12 in paragraph (1)(A)(ii), the injunctive re13 lief is limited to—

14 ‘‘(I) the orders described in clause

15 (i)(I);

16 ‘‘(II) an order restraining the

17 provider from providing access to the

18 material or activity that violates this

19 section at a particular online site re20 siding on a computer server operated

21 or controlled by the provider; and

22 ‘‘(III) such other injunctive rem23 edies as the court considers necessary

24 to prevent or restrain access to speci25 fied material or activity that is prohib-
47

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1 ited by this section at a particular on2 line location residing on a computer

3 server operated or controlled by the

4 provider, that are the least burdensome

5 to the provider among the forms of re6 lief that are comparably effective for

7 that purpose.

8 ‘‘(C) CONSIDERATIONS.—The court, in de9 termining appropriate injunctive relief under

10 this paragraph, shall consider—

11 ‘‘(i) whether such an injunction, either

12 alone or in combination with other such in13 junctions issued, and currently operative,

14 against the same provider would signifi15 cantly (and, in the case of relief under sub16 paragraph (B)(ii), taking into account,

17 among other factors, the conduct of the pro18 vider, unreasonably) burden either the pro19 vider or the operation of the system or net20 work of the provider;

21 ‘‘(ii) whether implementation of such

22 an injunction would be technically feasible

23 and effective, and would not materially

24 interfere with access to lawful material at

25 other online locations;
48

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1 ‘‘(iii) whether other less burdensome

2 and comparably effective means of pre3 venting or restraining access to the illegal

4 material or activity are available; and

5 ‘‘(iv) the magnitude of the harm likely

6 to be suffered by the community if the in7 junction is not granted.

8 ‘‘(D) NOTICE AND EX PARTE ORDERS.—In9 junctive relief under this paragraph shall not be

10 available without notice to the service provider

11 and an opportunity for such provider to appear

12 before the court, except for orders ensuring the

13 preservation of evidence or other orders having

14 no material adverse effect on the operation of the

15 communications network of the service provider.

16 ‘‘(4) EFFECT ON OTHER LAW.—

17 ‘‘(A) IMMUNITY FROM LIABILITY FOR COM18 PLIANCE.—An interactive computer service pro19 vider shall not be liable for any damages, pen20 alty, or forfeiture, civil or criminal, under Fed21 eral or State law for taking in good faith any

22 action described in paragraph (2)(A) to comply

23 with a notice described in paragraph (2)(B), or

24 complying with any court order issued under

25 paragraph (3).
49

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1 ‘‘(B) DISCLAIMER OF OBLIGATIONS.—Noth2 ing in this section may be construed to impose

3 or authorize an obligation on an interactive

4 computer service provider described in para5 graph (1)(B)—

6 ‘‘(i) to monitor material or use of its

7 service; or

8 ‘‘(ii) except as required by a notice or

9 an order of a court under this subsection, to

10 gain access to, to remove, or to disable ac11 cess to material.

12 ‘‘(C) RIGHTS OF SUBSCRIBERS.—Nothing

13 in this section may be construed to prejudice the

14 right of a subscriber to secure an appropriate de15 termination, as otherwise provided by law, in a

16 Federal court or in a State or local tribunal or

17 agency, that the account of such subscriber

18 should not be terminated pursuant to this sub19 section, or should be restored.

20 ‘‘(e) AVAILABILITY OF RELIEF.—The availability of

21 relief under subsections (c) and (d) shall not depend on,

22 or be affected by, the initiation or resolution of any action

23 under subsection (b), or under any other provision of Fed24 eral or State law.

25 ‘‘(f) APPLICABILITY.—
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1 ‘‘(1) IN GENERAL.—Subject to paragraph (2), the

2 prohibition in this section does not apply to—

3 ‘‘(A) any otherwise lawful bet or wager that

4 is placed, received, or otherwise made wholly

5 intrastate for a State lottery, or for a multi6 State lottery operated jointly between 2 or more

7 States in conjunction with State lotteries if—

8 ‘‘(i) each such lottery is expressly au9 thorized, and licensed or regulated, under

10 applicable State law;

11 ‘‘(ii) the bet or wager is placed on an

12 interactive computer service that uses a pri13 vate network;

14 ‘‘(iii) each person placing or otherwise

15 making that bet or wager is physically lo16 cated when such bet or wager is placed at

17 a facility that is open to the general public;

18 and

19 ‘‘(iv) each such lottery complies with

20 sections 1301 through 1304, and other ap21 plicable provisions of Federal law;

22 ‘‘(B) any otherwise lawful bet or wager that

23 is placed, received, or otherwise made on an

24 interstate or intrastate basis on a live horse or

25 a live dog race, or the sending, receiving, or in-
51

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1 viting of information assisting in the placing of

2 such a bet or wager, if such bet or wager, or the

3 transmission of such information, as applicable,

4 is—

5 ‘‘(i) expressly authorized, and licensed

6 or regulated by the State in which such bet

7 or wager is received, under applicable Fed8 eral and such State’s laws;

9 ‘‘(ii) placed on a closed-loop subscriber10 based service;

11 ‘‘(iii) initiated from a State in which

12 betting or wagering on that same type of

13 live horse or live dog racing is lawful and

14 received in a State in which such betting or

15 wagering is lawful;

16 ‘‘(iv) subject to the regulatory oversight

17 of the State in which the bet or wager is re18 ceived and subject by such State to min19 imum control standards for the accounting,

20 regulatory inspection, and auditing of all

21 such bets or wagers transmitted from 1

22 State to another; and

23 ‘‘(v) in the case of—

24 ‘‘(I) live horse racing, made in ac25 cordance with the Interstate Horse
52

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1 Racing Act of 1978 (15 U.S.C. 3001 et

2 seq.); or

3 ‘‘(II) live dog racing, subject to

4 consent agreements that are com5 parable to those required by the Inter6 state Horse Racing Act of 1978, ap7 proved by the appropriate State regu8 latory agencies, in the State receiving

9 the signal, and in the State in which

10 the bet or wager originates; or

11 ‘‘(C) any otherwise lawful bet or wager that

12 is placed, received, or otherwise made for a fan13 tasy sports league game or contest.

14 ‘‘(2) BETS OR WAGERS MADE BY AGENTS OR

15 PROXIES.—

16 ‘‘(A) IN GENERAL.—Paragraph (1) does not

17 apply in any case in which a bet or wager is

18 placed, received, or otherwise made by the use of

19 an agent or proxy using the Internet or an inter20 active computer service.

21 ‘‘(B) QUALIFICATION.—Nothing in this

22 paragraph may be construed to prohibit the

23 owner operator of a parimutuel wagering facility

24 that is licensed by a State from employing an

25 agent in the operation of the account wagering
53

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1 system owned or operated by the parimutuel fa2 cility.

3 ‘‘(3) ADVERTISING AND PROMOTION.—The prohi4 bition of subsection (b)(1)(B) does not apply to adver5 tising or promotion of any activity that is not pro6 hibited by subsection (b)(1)(A).

7 ‘‘(g) RULE OF CONSTRUCTION.—Nothing in this sec8 tion may be construed to affect any prohibition or remedy

9 applicable to a person engaged in a gambling business

10 under any other provision of Federal or State law.’’.

11 (b) TECHNICAL AMENDMENT.—The analysis for chap12 ter 50 of title 18, United States Code, is amended by adding

13 at the end the following:

‘‘1085. Internet gambling.’’.

14 SEC. 3. REPORT ON ENFORCEMENT.

15 Not later than 3 years after the date of enactment of

16 this Act, the Attorney General shall submit to Congress a

17 report, which shall include—

18 (1) an analysis of the problems, if any, associ19 ated with enforcing section 1085 of title 18, United

20 States Code, as added by section 2 of this Act;

21 (2) recommendations for the best use of the re22 sources of the Department of Justice to enforce that

23 section; and

24 (3) an estimate of the amount of activity and

25 money being used to gamble on the Internet.
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1 SEC. 4. SEVERABILITY.

2 If any provision of this Act, an amendment made by

3 this Act, or the application of such provision or amendment

4 to any person or circumstance is held to be unconstitu5 tional, the remainder of this Act, the amendments made by

6 this Act, and the application of this Act and the provisions

7 of such amendments to any other person or circumstance

8 shall not be affected thereby.