I 

112TH CONGRESS 

1ST SESSION H. R. 1174 

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

Internet gambling activities by the Secretary of the Treasury, to provide 

for consumer protections on the Internet, to enforce the tax code, and 

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 17, 2011 

Mr. CAMPBELL (for himself, Mr. FRANK of Massachusetts, Mr. KING of New 

York, and Mr. PERLMUTTER) introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the 

Committees on the Judiciary and Energy and Commerce, for a period to 

be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee 

concerned 

A BILL 

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

licensing of Internet gambling activities by the Secretary 

of the Treasury, to provide for consumer protections 

on the Internet, to enforce the tax code, and for other 

purposes. 

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

3 SECTION 1. SHORT TITLE. 

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

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

mstockstill on DSKH9S0YB1PROD with BILLS

2 

•HR 1174 IH

1 SEC. 2. FEDERAL LICENSING REQUIREMENT FOR INTER2 NET GAMBLING OPERATORS. 

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

4 States Code, is amended by adding at the end the fol5 lowing new subchapter: 

6 ‘‘SUBCHAPTER V—REGULATION OF LAWFUL 

7 INTERNET GAMBLING 

8 ‘‘§ 5381. Congressional findings 

9 ‘‘The Congress finds the following: 

10 ‘‘(1) Since the development of the Internet, mil11 lions of people have chosen to gamble online, and 

12 today Internet gambling is offered by operators lo13 cated in many different countries under a variety of 

14 licensing and regulatory regimes. 

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

16 for gambling by persons in the United States, there 

17 is no Federal or State regulatory regime in place to 

18 protect United States citizens who choose to engage 

19 in this interstate activity, or to oversee operators to 

20 establish and enforce standards of integrity and fair21 ness. 

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

23 equipment, and operations have been subject to var24 ious forms of Federal and State control, regulation, 

25 and enforcement, with some form of gambling being 

mstockstill on DSKH9S0YB1PROD with BILLS

3 

•HR 1174 IH

1 permitted in nearly every State and by many Indian 

2 tribes. 

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

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

5 tribal licensing and regulatory framework to protect 

6 underage and otherwise vulnerable individuals, to 

7 ensure the games are fair, to address the concerns 

8 of law enforcement, and to enforce any limitations 

9 on the activity established by the States and Indian 

10 tribes. 

11 ‘‘(5) An effective Federal, State, and tribal li12 censing system would ensure that licenses are issued 

13 only to Internet gambling operators which meet 

14 strict criteria to protect consumers, and which— 

15 ‘‘(A) are in good financial and legal stand16 ing, and of good character, honesty, and integ17 rity; 

18 ‘‘(B) utilize appropriate technology to de19 termine the age and location of users; 

20 ‘‘(C) adopt and implement systems to pro21 tect minors and problem gamblers; 

22 ‘‘(D) adopt and implement systems to en23 force any applicable Federal, State, and Indian 

24 tribe limitations on Internet gambling; and 

mstockstill on DSKH9S0YB1PROD with BILLS

4 

•HR 1174 IH

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

2 identify and combat money laundering and 

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

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

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

8 gambling, with each State and Indian tribe having 

9 the ability to limit Internet gambling operators from 

10 offering Internet gambling to persons located within 

11 its territory by opting out of the provisions of this 

12 Act. 

13 ‘‘§ 5382. Definitions 

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

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

17 any person who has applied for a license pursuant 

18 to this subchapter. 

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

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

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

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

mstockstill on DSKH9S0YB1PROD with BILLS

5 

•HR 1174 IH

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

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

3 same meanings as in section 4 of the Indian Gaming 

4 Regulatory Act. 

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

6 same meaning as in section 5362(5). 

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

8 entity authorized to operate an Internet gambling 

9 facility in accordance with this subchapter. 

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

13 means the direction, management, supervision, or 

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

16 whether by telephone, Internet, satellite, or other 

17 wire or wireless communication. 

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

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

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

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

23 or any commonwealth, territory, or other possession 

24 of the United States. 

mstockstill on DSKH9S0YB1PROD with BILLS

6 

•HR 1174 IH

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

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

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

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

7 shall have responsibility for the following activities: 

8 ‘‘(1) Exercising full regulatory jurisdiction 

9 over— 

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

12 ‘‘(B) the licensure and regulation of all ap13 plicants, except to the extent that powers have 

14 been delegated to qualified State and tribal reg15 ulatory bodies pursuant to this subchapter. 

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

17 necessary to administer and enforce the require18 ments of this subchapter. 

19 ‘‘(3) Employing enforcement agents with suffi20 cient training and experience to administer the re21 quirements of this subchapter and the regulations 

22 prescribed under this subchapter. 

23 ‘‘(4) Enforcing the requirements of this sub24 chapter through all appropriate means provided 

25 under this subchapter and other provisions of law. 

mstockstill on DSKH9S0YB1PROD with BILLS

7 

•HR 1174 IH

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

2 ‘‘(1) LICENSING REQUIRED FOR CERTAIN

3 INTERNET GAMBLING.—No person may operate an 

4 Internet gambling facility that knowingly accepts 

5 bets or wagers from persons located in the United 

6 States without a license issued by the Secretary in 

7 accordance with this subchapter. 

8 ‘‘(2) AUTHORITY UNDER VALID LICENSE.—A li9 censee may accept bets or wagers from persons lo10 cated in the United States, subject to the limitations 

11 set forth in this subchapter, so long as its license re12 mains in good standing. 

13 ‘‘(c) APPLICATION FOR LICENSE.— 

14 ‘‘(1) IN GENERAL.—Any person seeking author15 ity to operate an Internet gambling facility offering 

16 services to persons in the United States may apply 

17 for a license issued by the Secretary. 

18 ‘‘(2) INFORMATION REQUIRED.—Any applica19 tion for a license under this subchapter shall contain 

20 such information as may be required by the Sec21 retary, including the following: 

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

23 applicant, any senior executive and director of 

24 the applicant, and any person deemed to be in 

25 control of the applicant. 

mstockstill on DSKH9S0YB1PROD with BILLS

8 

•HR 1174 IH

1 ‘‘(B) The financial statements of the appli2 cant. 

3 ‘‘(C) Documentation showing the corporate 

4 structure of the applicant and all related busi5 nesses and affiliates. 

6 ‘‘(D) Documentation containing detailed 

7 evidence of the applicant’s plan for complying 

8 with all applicable regulations should a license 

9 be issued, with particular emphasis on the ap10 plicant’s ability to— 

11 ‘‘(i) protect underage and problem 

12 gamblers; 

13 ‘‘(ii) ensure games are being operated 

14 fairly; and 

15 ‘‘(iii) comply with and address the 

16 concerns of law enforcement. 

17 ‘‘(E) Certification that the applicant 

18 agrees to submit to United States jurisdiction 

19 and all applicable United States laws relating to 

20 acceptance by the applicant of bets or wagers 

21 over the Internet from persons located in the 

22 United States and all associated activities. 

23 ‘‘(F) Certification that the applicant has 

24 established a corporate entity or other separate 

25 business entity in the United States, a majority 

mstockstill on DSKH9S0YB1PROD with BILLS

9 

•HR 1174 IH

1 of whose officers are United States persons 

2 and, if there is a board of directors, that the 

3 board is majority-controlled by directors who 

4 are United States persons. 

5 ‘‘(d) STANDARDS FOR LICENSE ISSUANCE; SUIT6 ABILITY QUALIFICATIONS AND DISQUALIFICATION

7 STANDARDS.— 

8 ‘‘(1) SUITABILITY FOR LICENSING STAND9 ARDS.— 

10 ‘‘(A) IN GENERAL.—No person shall be eli11 gible to obtain a license unless the Secretary or 

12 an appropriate State officer or agency has de13 termined, upon completion of a background 

14 check and investigation, that the applicant, and 

15 any person deemed to be in control of the appli16 cant, is suitable for licensing. 

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

18 applicant is a corporation, partnership, or other 

19 business entity, a background check and inves20 tigation shall occur with respect to the presi21 dent or other chief executive of the corporation, 

22 partnership, or other business entity and other 

23 partners or senior executives and directors of 

24 the corporation, partnership, or entity, as determstockstill on DSKH9S0YB1PROD with BILLS

10 

•HR 1174 IH

1 mined appropriate by the Secretary or any ap2 propriate State or tribal officer or agency. 

3 ‘‘(C) BACKGROUND CHECK AND INVES4 TIGATION.—The Secretary shall establish 

5 standards and procedures for conducting back6 ground checks and investigations for purposes 

7 of this subsection. 

8 ‘‘(2) SUITABILITY FOR LICENSING STANDARDS

9 DESCRIBED.—For purposes of this subchapter, an 

10 applicant and any other person associated with the 

11 applicant, as applicable, is suitable for licensing if 

12 the applicant demonstrates to the Secretary or ap13 propriate State or tribal officer or agency by clear 

14 and convincing evidence that the applicant (or indi15 vidual associated with the applicant, as applicable)— 

16 ‘‘(A) is a person of good character, hon17 esty, and integrity; 

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

19 reputation, habits, and associations do not— 

20 ‘‘(i) pose a threat to the public inter21 est or to the effective regulation and con22 trol of the licensed activities; or 

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

24 unsuitable, unfair, or illegal practices, 

25 methods, and activities in the conduct of 

mstockstill on DSKH9S0YB1PROD with BILLS

11 

•HR 1174 IH

1 the licensed activities or the carrying on of 

2 the business and financial arrangements 

3 incidental to such activities; 

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

5 activities for which the applicant is licensed in 

6 accordance with the provisions of this sub7 chapter and any regulations prescribed under 

8 this subchapter; 

9 ‘‘(D) has or guarantees acquisition of ade10 quate business competence and experience in 

11 the operation of Internet gambling facilities; 

12 and 

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

14 for the nature of the proposed operation and 

15 from a suitable source. 

16 ‘‘(3) UNSUITABLE FOR LICENSING.—An appli17 cant or any other person may not be determined to 

18 be suitable for licensing within the meaning of this 

19 subchapter if the applicant or such person— 

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

21 documentation material to a determination of 

22 suitability for licensing under paragraph (1); 

23 ‘‘(B) has supplied information which is un24 true or misleading as to a material fact per25 taining to any such determination; 

mstockstill on DSKH9S0YB1PROD with BILLS

12 

•HR 1174 IH

1 ‘‘(C) has been convicted of an offense pun2 ishable by imprisonment of more than 1 year; 

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

4 Federal or State tax returns or in the payment 

5 of any taxes, penalties, additions to tax, or in6 terest owed to a State or the United States; 

7 ‘‘(E) has, on or after the date of the enact8 ment of the Unlawful Internet Gambling En9 forcement Act of 2006— 

10 ‘‘(i) knowingly participated in, or 

11 should have known they were participating 

12 in, any illegal Internet gambling activity, 

13 including the taking of an illegal Internet 

14 wager, the payment of winnings on an ille15 gal Internet wager, the promotion through 

16 advertising of any illegal Internet gambling 

17 Web site or service, or the collection of any 

18 payments to an entity operating an illegal 

19 Internet gambling Web site; or 

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

21 managed, or employed by, or should have 

22 known they were owned, operated, man23 aged, or employed by, any person who was 

24 knowingly participating in, or should have 

25 known they were participating in, any illemstockstill on DSKH9S0YB1PROD with BILLS

13 

•HR 1174 IH

1 gal Internet gambling activity, including 

2 the taking of an illegal Internet wager, the 

3 payment of winnings on an illegal Internet 

4 wager, the promotion through advertising 

5 of any illegal Internet gambling Web site 

6 or service, or the collection of any pay7 ments to an entity operating an illegal 

8 Internet gambling Web site; 

9 ‘‘(F) has— 

10 ‘‘(i) received any assistance, financial 

11 or otherwise, from any person who has, be12 fore the date of the enactment of the 

13 Internet Gambling Regulation, Consumer 

14 Protection, and Enforcement Act, know15 ingly accepted bets or wagers from a per16 son located in the United States in viola17 tion of Federal or State law; or 

18 ‘‘(ii) provided any assistance, financial 

19 or otherwise, to any person who has, before 

20 the date of the enactment of the Internet 

21 Gambling Regulation, Consumer Protec22 tion, and Enforcement Act, knowingly ac23 cepted bets or wagers from a person lo24 cated in the United States in violation of 

25 Federal or State law; 

mstockstill on DSKH9S0YB1PROD with BILLS

14 

•HR 1174 IH

1 ‘‘(G) with respect to another entity that 

2 has accepted a bet or wager from any individual 

3 in violation of United States law, has purchased 

4 or otherwise obtained— 

5 ‘‘(i) such entity; 

6 ‘‘(ii) a list of the customers of such 

7 entity; or 

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

9 or operations of such entity; 

10 ‘‘(H) is listed on a State gambling ex11 cluded persons list; or 

12 ‘‘(I) fails to certify in writing, under pen13 alty of perjury, that the applicant or other such 

14 person, and all affiliated business entities (in15 cluding all entities under common control), has 

16 through its entire history— 

17 ‘‘(i) not committed an intentional fel18 ony violation of Federal or State gambling 

19 laws; and 

20 ‘‘(ii) used diligence to prevent any 

21 United States person from placing a bet on 

22 an Internet site in violation of Federal or 

23 State gambling laws. 

24 ‘‘(4) APPEAL OF DETERMINATION.—With re25 spect to any applicant or other person that the Secmstockstill on DSKH9S0YB1PROD with BILLS

15 

•HR 1174 IH

1 retary determines is not suitable for licensing within 

2 the meaning of this subchapter by reason of sub3 paragraph (E) or (F) of paragraph (3), and where 

4 the Secretary has not determined that such appli5 cant or person was acting in their capacity as a 

6 managerial employee of an Internet gambling Web 

7 site, the Secretary shall establish an appeals process 

8 by which such applicant or person may appeal the 

9 Secretary’s determination. 

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

11 any other person who is required to be determined 

12 to be suitable for licensing in connection with such 

13 licensee) shall meet the standards necessary to be 

14 suitable for licensing throughout the term of the li15 cense. 

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

17 The Secretary may take such action as is necessary 

18 to protect the public trust, including the implemen19 tation of such safeguards as may be necessary to en20 sure the operation of an Internet gambling facility 

21 licensed under this subchapter is controlled only by 

22 persons who are suitable for licensing. 

23 ‘‘(7) ENFORCEMENT ACTIONS.— 

24 ‘‘(A) DETERMINATION OF UNSUITABILITY

25 FOR CONTINUED LICENSURE.—If the Secretary 

mstockstill on DSKH9S0YB1PROD with BILLS

16 

•HR 1174 IH

1 finds that an individual owner or holder of a se2 curity of a licensee, or of a holding or inter3 mediary company of a licensee or any person 

4 with an economic interest in a licensee or a di5 rector, partner, or officer of a licensee is not 

6 suitable for licensing, the Secretary may deter7 mine that the licensee is not qualified to con8 tinue as a licensee. 

9 ‘‘(B) ACTION TO PROTECT THE PUBLIC IN10 TEREST, INCLUDING SUSPENSION.—If the Sec11 retary may determine that the licensee is not 

12 qualified to continue as a licensee, the Secretary 

13 shall propose action necessary to protect the 

14 public interest, including, if deemed necessary, 

15 the suspension of the authority of the licensee 

16 to engage in licensed activities. 

17 ‘‘(C) IMPOSITION OF CONDITIONS INCLUD18 ING REMOVAL OF PARTIES.—Notwithstanding a 

19 determination under subparagraph (A), the 

20 Secretary may allow a licensee to continue en21 gaging in licensed activities by imposing condi22 tions on the licensee under penalty of revocation 

23 or suspension of the authority of the licensee to 

24 engage in licensed activities, including— 

mstockstill on DSKH9S0YB1PROD with BILLS

17 

•HR 1174 IH

1 ‘‘(i) the identification of any person 

2 determined to be unsuitable for licensing; 

3 and 

4 ‘‘(ii) the establishment of appropriate 

5 safeguards to ensure such person is ex6 cluded from any interest in the licensed ac7 tivities. 

8 ‘‘(e) ASSESSMENTS FOR ADMINISTRATIVE EX9 PENSES.— 

10 ‘‘(1) USER FEES.— 

11 ‘‘(A) IN GENERAL.—The cost of admin12 istering this subchapter with respect to each li13 censee, including the cost of any review or ex14 amination of a licensee to ensure compliance 

15 with the terms of the license and this sub16 chapter, shall be assessed by the Secretary 

17 against the licensee institution by written notice 

18 in an amount appropriate to meet the Sec19 retary’s expenses in carrying out such adminis20 tration, review, or examination. 

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

22 the Secretary as user fees under subparagraph 

23 (A) shall— 

mstockstill on DSKH9S0YB1PROD with BILLS

18 

•HR 1174 IH

1 ‘‘(i) be maintained by the Secretary 

2 solely for use in accordance with clause 

3 (ii); 

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

5 cover all expenses incurred by the Sec6 retary in carrying out this subchapter; and 

7 ‘‘(iii) not be construed to be Govern8 ment funds or appropriated monies, or 

9 subject to apportionment for the purposes 

10 of chapter 15 or any other authority. 

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

12 whom an assessment is assessed under this 

13 paragraph shall be afforded an agency hearing 

14 if such person submits a request for such hear15 ing within 20 days after the issuance of the no16 tice of assessment. 

17 ‘‘(D) COLLECTION.— 

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

19 to pay an assessment under this paragraph 

20 after the assessment has become final, the 

21 Secretary shall recover the amount as22 sessed by action in the appropriate United 

23 States district court. 

24 ‘‘(ii) APPROPRIATENESS OF ASSESS25 MENT NOT REVIEWABLE.—In any civil acmstockstill on DSKH9S0YB1PROD with BILLS

19 

•HR 1174 IH

1 tion under clause (i), the validity and ap2 propriateness of the assessment shall not 

3 be subject to review. 

4 ‘‘(2) DIRECT AND EXCLUSIVE OBLIGATION OF

5 LICENSEE.—The user fee shall be the direct and ex6 clusive obligation of the licensee and may not be de7 ducted from amounts available as deposits to any 

8 person placing a bet. 

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

10 grant licenses under this subchapter if the applicant meets 

11 the criteria set by the Secretary set forth in this sub12 chapter and in any regulations promulgated thereunder. 

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

14 person may operate an Internet gambling facility in ac15 cordance with this subchapter unless the person maintains 

16 or requires mechanisms so that the following require17 ments, and the standards established under section 5384, 

18 are met with respect to any Internet bet or wager: 

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

20 ensure that the individual placing a bet or wager is 

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

22 tribal area in which the individual is located at the 

23 time the bet or wager is placed. 

24 ‘‘(2) PERMISSIBLE LOCATION.—Appropriate 

25 safeguards to ensure that the individual placing a 

mstockstill on DSKH9S0YB1PROD with BILLS

20 

•HR 1174 IH

1 bet or wager is physically located in a jurisdiction 

2 that permits Internet gambling at the time the bet 

3 or wager is placed. 

4 ‘‘(3) COLLECTION OF CUSTOMER TAXES.—Ap5 propriate mechanisms to ensure that all taxes relat6 ing to Internet gambling from persons engaged in 

7 Internet gambling are collected at the time of any 

8 payment of any proceeds of Internet gambling. 

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

10 Appropriate mechanisms to ensure that all taxes re11 lating to Internet gambling from any licensee are 

12 collected and disbursed as required by law, and that 

13 adequate records to enable later audit or verification 

14 are maintained. 

15 ‘‘(5) SAFEGUARDS AGAINST FINANCIAL

16 CRIME.—Appropriate safeguards to combat fraud, 

17 money laundering, and terrorist finance. 

18 ‘‘(6) SAFEGUARDS AGAINST COMPULSIVE GAM19 BLING.—Appropriate safeguards to combat compul20 sive Internet gambling. 

21 ‘‘(7) PRIVACY SAFEGUARDS.—Appropriate safe22 guards to protect the privacy and security of any 

23 person engaged in Internet gambling. 

mstockstill on DSKH9S0YB1PROD with BILLS

21 

•HR 1174 IH

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

2 mechanisms to ensure that any assessment under 

3 subsection (e) is paid to the Secretary. 

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

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

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

10 the date of issuance. 

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

12 accordance with the requirements prescribed by the 

13 Secretary pursuant to this subchapter. 

14 ‘‘(i) REVOCATION OF LICENSE.— 

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

16 this subchapter may be revoked by the Secretary 

17 if— 

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

19 provision of this subchapter; 

20 ‘‘(B) the licensee is determined to be un21 suitable for licensing, within the meaning of 

22 this subchapter; or 

23 ‘‘(C) the licensee is determined to be tar24 geting marketing or advertising materials at in25 dividuals who are not of legal age to place a bet 

mstockstill on DSKH9S0YB1PROD with BILLS

22 

•HR 1174 IH

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

2 tribal area in which the individuals are located. 

3 ‘‘(2) FINAL ACTION.—Any revocation of a li4 cense under paragraph (1) shall be treated as a final 

5 action by the Secretary. 

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

7 the Secretary under this subchapter shall include regula8 tions to fully implement— 

9 ‘‘(1) safeguards required for licensees under 

10 subsection (g); and 

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

12 the Problem Gambling, Responsible Gambling, and 

13 Self-Exclusion Program under section 5384. 

14 ‘‘(k) ADMINISTRATIVE PROVISIONS.— 

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

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

17 have the authority to engage in the following: 

18 ‘‘(i) Investigate the suitability of each 

19 licensee to ensure compliance with this 

20 subchapter and regulations prescribed 

21 under this subchapter. 

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

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

mstockstill on DSKH9S0YB1PROD with BILLS

23 

•HR 1174 IH

1 ‘‘(iii) Require licensees to maintain 

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

4 States within the United States. 

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

6 the employees of the applicant or licensee, 

7 and of its affiliated business entities, be 

8 residents or citizens of the United States. 

9 All entities under common control shall be 

10 considered affiliated business entities for 

11 the purposes of this subparagraph. 

12 ‘‘(v) Require licensees to maintain in 

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

15 placed from the United States at a location 

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

18 ‘‘(vi) Examine any licensee and any 

19 books, papers, records, or other data of li20 censees relevant to any recordkeeping or 

21 reporting requirements imposed by the 

22 Secretary under this subchapter. 

23 ‘‘(vii) Require licensees to maintain all 

24 facilities within the United States for procmstockstill on DSKH9S0YB1PROD with BILLS

24 

•HR 1174 IH

1 essing of bets or wagers made or placed 

2 from the United States. 

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

5 or an applicant for a license, an officer or 

6 employee of a licensee or any such appli7 cant (including a former officer or em8 ployee), or any person having possession, 

9 custody, or care of the reports and records 

10 required by the Secretary under this sub11 chapter, to appear before the Secretary or 

12 a designee of the Secretary at a time and 

13 place named in the summons and to 

14 produce such books, papers, records, or 

15 other data, and to give testimony, under 

16 oath, as may be relevant or material to any 

17 investigation in connection with the en18 forcement of this subchapter or any appli19 cation for a license under this subchapter. 

20 ‘‘(ix) Investigate any violation of this 

21 subchapter and any regulation under this 

22 subchapter and any other violation of law 

23 relating to the operation of an Internet 

24 gambling facility. 

mstockstill on DSKH9S0YB1PROD with BILLS

25 

•HR 1174 IH

1 ‘‘(x) Conduct continuing reviews of 

2 applicants and licensees and the operation 

3 of Internet gambling facilities by use of 

4 technological means, onsite observation of 

5 facilities, including servers, or other rea6 sonable means to assure compliance with 

7 this subchapter and any regulations pro8 mulgated hereunder. 

9 ‘‘(xi) Prohibit inappropriate adver10 tising practices by licensees, including un11 solicited emails targeting members of vul12 nerable populations, including problem 

13 gamblers and minors, or Internet adver14 tising linked to search terms associated 

15 with children, problem gamblers, or other 

16 topics deemed inappropriate. 

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

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

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

22 trade commitments of the United States under 

23 the World Trade Organization. 

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

25 implementing this subchapter, the Secretary shall 

mstockstill on DSKH9S0YB1PROD with BILLS

26 

•HR 1174 IH

1 conduct meaningful consultation with Indian tribes 

2 regarding all aspects of this subchapter which affect 

3 Indian tribes, both as potential licensing entities or 

4 operating entities. 

5 ‘‘(3) ADMINISTRATIVE ASPECTS OF SUM6 MONS.— 

7 ‘‘(A) PRODUCTION AT DESIGNATED

8 SITE.—A summons issued pursuant to this sub9 section may require that books, papers, records, 

10 or other data stored or maintained at any place 

11 be produced at any business location of a li12 censee or applicant for a license or any des13 ignated location in any State or in any territory 

14 or other place subject to the jurisdiction of the 

15 United States not more than 500 miles distant 

16 from any place where the licensee or applicant 

17 for a license operates or conducts business in 

18 the United States. 

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

20 United States shall not be liable for any ex21 pense incurred in connection with the produc22 tion of books, papers, records, or other data 

23 under this subsection. 

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

25 summons issued under this subsection may be 

mstockstill on DSKH9S0YB1PROD with BILLS

27 

•HR 1174 IH

1 by registered mail or in such other manner cal2 culated to give actual notice as the Secretary 

3 may prescribe by regulation. 

4 ‘‘(4) CONTUMACY OR REFUSAL.— 

5 ‘‘(A) REFERRAL TO ATTORNEY GEN6 ERAL.—In case of contumacy by a person 

7 issued a summons under this subsection or a 

8 refusal by such person to obey such summons 

9 or to allow the Secretary to conduct an exam10 ination, the Secretary shall refer the matter to 

11 the Secretary of the Treasury for referral to the 

12 Attorney General. 

13 ‘‘(B) JURISDICTION OF COURT.—The At14 torney General may invoke the aid of any court 

15 of the United States to compel compliance with 

16 the summons within the jurisdiction of which— 

17 ‘‘(i) the investigation which gave rise 

18 to the summons or the examination is 

19 being or has been carried on; 

20 ‘‘(ii) the person summoned is an in21 habitant; or 

22 ‘‘(iii) the person summoned carries on 

23 business or may be found. 

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

25 an order requiring the person summoned to apmstockstill on DSKH9S0YB1PROD with BILLS

28 

•HR 1174 IH

1 pear before the Secretary or a delegate of the 

2 Secretary to produce books, papers, records, 

3 and other data, to give testimony as may be 

4 necessary to explain how such material was 

5 compiled and maintained, to allow the Secretary 

6 to examine the business of a licensee, and to 

7 pay the costs of the proceeding. 

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

9 Any failure to obey the order of the court may 

10 be punished by the court as a contempt thereof. 

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

12 in any case under this subsection may be served 

13 in any judicial district in which such person 

14 may be found. 

15 ‘‘(5) COMPILATION OF DATASETS ON PLAYER

16 BEHAVIOR.— 

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

18 compile and make available to the public, on the 

19 Web site of the Secretary, datasets on player 

20 behavior. 

21 ‘‘(B) REGULATIONS REQUIRING SUBMIS22 SION OF INFORMATION.—The Secretary shall 

23 prescribe regulations to require licensees under 

24 this subchapter to provide information on play25 er behavior that the Secretary determines is apmstockstill on DSKH9S0YB1PROD with BILLS

29 

•HR 1174 IH

1 propriate for the datasets under subparagraph 

2 (A). 

3 ‘‘(C) INFORMATION REQUIRED TO BE IN4 CLUDED.—Datasets prepared under this para5 graph shall include information on any indi6 vidual player, if requested by the Secretary, in7 cluding but not limited to information con8 cerning gambling frequency, gaming duration, 

9 the amount wagered, the number of bets placed, 

10 and net losses, provided that such request com11 plies with the provisions of subparagraph (D). 

12 ‘‘(D) PROTECTION OF PRIVACY.—All infor13 mation provided pursuant to this paragraph 

14 shall be aggregated and anonymized, and shall 

15 not contain information that either alone or in 

16 combination with other data elements would 

17 permit identification of any individual player. 

18 ‘‘(l) CIVIL MONEY PENALTIES.— 

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

20 upon any licensee or other person subject to the re21 quirements of this subchapter for any willful viola22 tion of this subchapter or any regulation prescribed 

23 or order issued under this subchapter, a civil penalty 

24 of not more than the greater of— 

mstockstill on DSKH9S0YB1PROD with BILLS

30 

•HR 1174 IH

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

2 involved in the violation, if any; or 

3 ‘‘(B) $25,000. 

4 ‘‘(2) ASSESSMENT.— 

5 ‘‘(A) WRITTEN NOTICE.—Any penalty im6 posed under paragraph (1) may be assessed and 

7 collected by the Secretary by written notice. 

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

9 respect to any assessment under paragraph (1), 

10 a hearing is not requested pursuant to subpara11 graph (E) within the period of time allowed 

12 under such subparagraph, the assessment shall 

13 constitute a final and unappealable order. 

14 ‘‘(C) AUTHORITY TO MODIFY OR REMIT

15 PENALTY.—The Secretary may compromise, 

16 modify, or remit any penalty which the Sec17 retary may assess or has already assessed 

18 under paragraph (1). 

19 ‘‘(D) MITIGATING FACTORS.—In deter20 mining the amount of any penalty imposed 

21 under paragraph (1), the Secretary shall take 

22 into account the appropriateness of the penalty 

23 with respect to— 

mstockstill on DSKH9S0YB1PROD with BILLS

31 

•HR 1174 IH

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

2 and the good faith of the person against 

3 whom the penalty is assessed; 

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

5 ‘‘(iii) the history of previous viola6 tions; and 

7 ‘‘(iv) such other matters as justice 

8 may require. 

9 ‘‘(E) HEARING.—The person against 

10 whom any penalty is assessed under paragraph 

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

12 person submits a request for such hearing with13 in 20 days after the issuance of the notice of 

14 assessment. 

15 ‘‘(F) COLLECTION.— 

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

17 to pay an assessment after any penalty as18 sessed under this paragraph has become 

19 final, the Secretary shall recover the 

20 amount assessed by action in the appro21 priate United States district court. 

22 ‘‘(ii) APPROPRIATENESS OF PENALTY

23 NOT REVIEWABLE.—In any civil action 

24 under clause (i), the validity and appromstockstill on DSKH9S0YB1PROD with BILLS

32 

•HR 1174 IH

1 priateness of the penalty shall not be sub2 ject to review. 

3 ‘‘(G) DISBURSEMENT.—All penalties col4 lected under authority of this subsection shall 

5 be deposited into the Treasury. 

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

7 a licensee of any civil penalty assessed under this 

8 subsection that has become final shall be a require9 ment for the retention of its license. 

10 ‘‘(m) TREATMENT OF RECORDS.—In light of busi11 ness competition, confidentiality, and privacy concerns, 

12 the Secretary shall protect from disclosure information 

13 submitted in support of a license application under this 

14 subchapter and information collected in the course of reg15 ulating licensees to the full extent permitted by sections 

16 552 and 552a of title 5. 

17 ‘‘(n) SUITABILITY FOR LICENSING REQUIREMENTS

18 FOR CERTAIN SERVICE PROVIDERS.— 

19 ‘‘(1) IN GENERAL.—Any person that know20 ingly— 

21 ‘‘(A) manages, administers, or controls 

22 bets or wagers that are initiated, received, or 

23 otherwise made within the United States, 

mstockstill on DSKH9S0YB1PROD with BILLS

33 

•HR 1174 IH

1 ‘‘(B) otherwise manages or administers the 

2 games with which such bets or wagers are asso3 ciated, or 

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

5 distributes or makes available for downloading 

6 software, other system programs or hardware 

7 that create, operate, or otherwise affect the out8 come of a game, 

9 shall meet all of the suitability for licensing criteria 

10 established under this section in the same manner 

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

12 a licensee. 

13 ‘‘(2) SUITABILITY FOR LICENSING REQUIRE14 MENTS FOR CERTAIN SERVICE PROVIDERS.—Any 

15 failure on the part of person described in any sub16 paragraph of paragraph (1) to remain suitable for li17 censing shall be grounds for revocation of the au18 thority of the licensee for whom such service is pro19 vided to operate an Internet gambling facility, in the 

20 same manner and in accordance with subsection (i). 

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

22 BODY CERTIFICATIONS OF SUITABILITY FOR APPLI23 CANTS.— 

24 ‘‘(1) QUALIFICATION OF STATE AND TRIBAL

25 REGULATORY BODIES.— 

mstockstill on DSKH9S0YB1PROD with BILLS

34 

•HR 1174 IH

1 ‘‘(A) APPLICATION FOR DETERMINA2 TION.—Any State or tribal regulatory body with 

3 expertise in regulating gambling may— 

4 ‘‘(i) notify the Secretary of its willing5 ness to review prospective applicants to 

6 certify whether any such applicant meets 

7 the qualifications established under this 

8 subchapter; and 

9 ‘‘(ii) provide the Secretary with such 

10 documentation as the Secretary determines 

11 necessary for the Secretary to determine 

12 whether such State or tribal regulatory 

13 body is qualified to conduct such review 

14 and may be relied upon by the Secretary to 

15 make any such certification. 

16 ‘‘(B) DETERMINATION AND NOTICE.— 

17 Within 60 days after receiving any notice under 

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

19 ‘‘(i) make the determination as to 

20 whether a State or tribal regulatory body 

21 is qualified to conduct a review of prospec22 tive applicants and may be relied upon to 

23 certify whether any such applicant meets 

24 the qualifications established under this 

25 subchapter; and 

mstockstill on DSKH9S0YB1PROD with BILLS

35 

•HR 1174 IH

1 ‘‘(ii) notify the State or tribal regu2 latory body of such determination. 

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

4 During the period that any determination of quali5 fication under paragraph (1)(B) is in effect with re6 spect to any such State or tribal regulatory body, 

7 the State or tribal regulatory body— 

8 ‘‘(A) may undertake reviews of any appli9 cant to determine whether the applicant or any 

10 person associated with the applicant meets the 

11 criteria for suitability for licensing established 

12 under this subchapter; 

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

14 an administrative fee or assessment for con15 ducting such review in an amount the regu16 latory body determines to be necessary to meet 

17 its expenses in the conduct of such review; and 

18 ‘‘(C) shall process and assess each appli19 cant fairly and equally based on objective cri20 teria, regardless of any prior licensing of an ap21 plicant by the State or tribal regulatory body. 

22 ‘‘(3) RELIANCE ON STATE OR TRIBAL CERTIFI23 CATION.—Any applicant may provide a certification 

24 of suitability for licensing made by any State or trib25 al regulatory body under paragraph (2), together 

mstockstill on DSKH9S0YB1PROD with BILLS

36 

•HR 1174 IH

1 with all documentation the applicant has submitted 

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

3 Secretary, and any such certification and docu4 mentation shall be relied on by the Secretary as evi5 dence that an applicant has met the suitability for 

6 licensing requirements under this section. 

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

8 Notwithstanding any certification of suitability for 

9 licensing made by any State or tribal regulatory 

10 body, the Secretary retains the authority to review, 

11 withhold, or revoke any license if the Secretary has 

12 reason to believe that any applicant or licensee does 

13 not meet the suitability requirements for licensing 

14 established under this section, or any other require15 ment of a licensee. 

16 ‘‘(5) RELIANCE ON QUALIFIED REGULATORY

17 BODY FOR OTHER PURPOSES, INCLUDING EXAMINA18 TION AND ENFORCEMENT.—The Secretary shall rely 

19 on any State and tribal regulatory body found quali20 fied under this subsection for such other regulatory 

21 and enforcement activities as the Secretary finds to 

22 be useful and appropriate to carry out the purposes 

23 of this subchapter, including authority under para24 graph (6). 

mstockstill on DSKH9S0YB1PROD with BILLS

37 

•HR 1174 IH

1 ‘‘(6) ADDITIONAL AUTHORITY OF QUALIFIED

2 STATE OR TRIBAL AUTHORITIES.—The qualified 

3 state or tribal authorities may— 

4 ‘‘(A) examine licensees who are licensed 

5 under a State or tribal program referred to in 

6 paragraph (1); 

7 ‘‘(B) employ enforcement agents with suf8 ficient training and experience to administer the 

9 requirements of this subchapter; and 

10 ‘‘(C) enforce any requirement of this sub11 chapter that is within the jurisdiction of the 

12 qualified state or tribal authority through all 

13 appropriate means provided under this sub14 chapter and other provisions of law. 

15 ‘‘(7) REVOCATION OF QUALIFICATION.—The 

16 Secretary may revoke, at any time and for any rea17 son, the qualification of any State or tribal regu18 latory body to certify or to conduct any other regu19 latory or enforcement activity to carry out the pur20 poses of this subchapter. 

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

22 OR WAGERS.—The Secretary shall— 

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

24 compliance effectiveness of each licensee’s software, 

25 mechanisms, and other systems for preventing mimstockstill on DSKH9S0YB1PROD with BILLS

38 

•HR 1174 IH

1 nors from placing bets or wagers through the Inter2 net site of the licensee; and 

3 ‘‘(2) impose a sanction of either a fine, a rev4 ocation of license, or both, on a licensee whose minor 

5 protection software, mechanisms, and other systems 

6 are found to be insufficiently effective. 

7 ‘‘(q) REQUIREMENTS WITH RESPECT TO CHILD SUP8 PORT DELINQUENTS.— 

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

10 the Secretary by a Federal or State court or a com11 petent State agency involved with the administration 

12 or enforcement of a court-ordered child support pay13 ment that a particular individual is delinquent with 

14 respect to court-ordered child support payments, the 

15 Secretary shall include that individual on the list es16 tablished under section 5384(c)(1)(A). 

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

18 on the list pursuant to paragraph (1) shall be re19 moved from such list if the court or agency that 

20 made such individual’s delinquency known to the 

21 Secretary notifies the Secretary that such individual 

22 is no longer delinquent. 

mstockstill on DSKH9S0YB1PROD with BILLS

39 

•HR 1174 IH

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

2 Consumer Safeguards, and Self-Exclusion 

3 Program 

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

5 any State or tribal regulatory body that has been qualified 

6 under subsection 5383(o) shall prescribe regulations for 

7 the development of a Problem Gambling, Responsible 

8 Gambling, Consumer Safeguards, and Self-Exclusion Pro9 gram on the basis of standards that each licensee shall 

10 implement as a condition of licensure. 

11 ‘‘(b) MINIMUM REQUIREMENTS.— 

12 ‘‘(1) IN GENERAL.—Any application for a li13 cense shall include a submission to the Secretary or 

14 qualified State or tribal regulatory body setting forth 

15 a comprehensive program that is intended— 

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

17 customer through the use of commercially avail18 able data sources or any approved government 

19 database that is available for access in real-time 

20 through an automated process; 

21 ‘‘(B) to ensure that no customers under 

22 the legal age 21 may initiate or otherwise make 

23 any bets or wagers for real money; 

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

25 which the customer is located at the time the 

26 customer attempts to initiate a bet or wager; 

mstockstill on DSKH9S0YB1PROD with BILLS

40 

•HR 1174 IH

1 ‘‘(D) to ensure that no customer who is lo2 cated in a State or tribal land that opts out 

3 pursuant to section 5387 can initiate or other4 wise make a bet or wager prohibited by such 

5 opt-out; 

6 ‘‘(E) to ensure that responsible gambling 

7 materials including materials on problem gam8 bling, services and resources to address problem 

9 gambling, descriptions of games offered by the 

10 licensee, and when appropriate, odds of winning 

11 or payout rates of games, and any other mate12 rials that the Secretary or qualified State or 

13 tribal regulatory body may deem appropriate 

14 are made available to customers; 

15 ‘‘(F) to make available player-selectable re16 sponsible gambling options that may include, as 

17 appropriate to specific gambling games, a stake 

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

19 limit, session time limit, time-based exclusion 

20 from all gambling and other similar options 

21 that the Secretary or qualified State or tribal 

22 regulatory body may deem appropriate and re23 quire to be made available; 

24 ‘‘(G) to require each customer, before mak25 ing or placing any bet or wager, to establish 

mstockstill on DSKH9S0YB1PROD with BILLS

41 

•HR 1174 IH

1 personal limits as a condition of play that apply 

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

3 daily, weekly or monthly increments, at the dis4 cretion of the customer; 

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

6 any customer in connection with any lawful 

7 Internet gambling activity; 

8 ‘‘(I) to protect against fraud and to pro9 vide for dispute resolution relating to internet 

10 gambling activity through programs to insure 

11 the integrity and fairness of the games; and 

12 ‘‘(J) to protect against money laundering 

13 relating to Internet gambling activities. 

14 ‘‘(2) REQUIREMENTS FOR PROGRAMS ENSURING

15 INTEGRITY AND FAIRNESS.—The programs referred 

16 to in paragraph (1)(I) to insure the integrity and 

17 fairness of the games shall include requirements 

18 for— 

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

20 protocols for random number generation where 

21 one of the parties is the player; 

22 ‘‘(B) secure audit trails; 

23 ‘‘(C) detailed player betting logs that 

24 record and store each wager placed by the play25 er; 

mstockstill on DSKH9S0YB1PROD with BILLS

42 

•HR 1174 IH

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

2 bets or wagers, where appropriate; or 

3 ‘‘(E) equally effective options that the Sec4 retary or qualified State or tribal regulatory of5 ficer or agency may determine to be appro6 priate. 

7 ‘‘(c) PERIODIC REVIEW.— 

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

9 regular basis, review the minimum requirements 

10 under this section and may, based on the best avail11 able technology, update the standards that each li12 censee shall implement as a condition of licensure. 

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

14 required under paragraph (1), the Secretary shall 

15 consult with— 

16 ‘‘(A) State and tribal gaming regulatory 

17 officials; 

18 ‘‘(B) law enforcement officials; 

19 ‘‘(C) experts in underage and problem 

20 gaming; 

21 ‘‘(D) experts on individual privacy; 

22 ‘‘(E) consumers; 

23 ‘‘(F) on-line retailers of other age re24 stricted materials such as tobacco and alcohol 

25 products; 

mstockstill on DSKH9S0YB1PROD with BILLS

43 

•HR 1174 IH

1 ‘‘(G) licensees and other representatives of 

2 the gaming industry; 

3 ‘‘(H) software developers with expertise in 

4 gaming, privacy, the payments systems avail5 able, and other relevant areas; and 

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

7 Secretary may determine to be appropriate. 

8 ‘‘(d) LIST OF PERSONS SELF-EXCLUDED FROM

9 GAMBLING ACTIVITIES.— 

10 ‘‘(1) ESTABLISHMENT.— 

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

12 provide by regulation for the establishment of a 

13 list of persons self-excluded from gambling ac14 tivities at all licensee sites. 

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

16 may request placement on the list of self-ex17 cluded persons by— 

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

19 established by the Secretary that the per20 son wishes to be denied gambling privi21 leges; and 

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

23 of voluntary exclusion, the person may not 

24 collect any winnings or recover any losses 

mstockstill on DSKH9S0YB1PROD with BILLS

44 

•HR 1174 IH

1 resulting from any gambling activity at 

2 any licensee sites. 

3 ‘‘(2) PLACEMENT AND REMOVAL PROCE4 DURES.—The regulations prescribed by the Sec5 retary under paragraph (1)(A) shall establish proce6 dures for placements on, and removals from, the list 

7 of self-excluded persons. 

8 ‘‘(3) LIMITATION ON LIABILITY.— 

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

10 the Secretary, an enforcement agent, or a li11 censee, or any employee or agent of the United 

12 States, the Secretary, an enforcement agent, or 

13 a licensee, shall not be liable to any self-ex14 cluded person or to any other party in any judi15 cial or administrative proceeding for any harm, 

16 monetary or otherwise, which may arise as a re17 sult of— 

18 ‘‘(i) any failure to withhold gambling 

19 privileges from, or to restore gambling 

20 privileges to, a self-excluded person; or 

21 ‘‘(ii) otherwise permitting a self-ex22 cluded person to engage in gambling activ23 ity while on the list of self-excluded per24 sons. 

mstockstill on DSKH9S0YB1PROD with BILLS

45 

•HR 1174 IH

1 ‘‘(B) RULE OF CONSTRUCTION.—No provi2 sion of subparagraph (A) shall be construed as 

3 preventing the Director from assessing any reg4 ulatory sanction against a licensee for failing to 

5 comply with the minimum standards prescribed 

6 pursuant to this subsection. 

7 ‘‘(4) DISCLOSURE PROVISIONS.— 

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

9 other provision of Federal or State law, the list 

10 of self-excluded persons shall not be open to 

11 public inspection. 

12 ‘‘(B) AFFILIATE DISCLOSURE.—Any li13 censees may disclose the identities of persons on 

14 the self-excluded list to any affiliated company 

15 or, where required to comply with this sub16 section, any service provider, to the extent that 

17 the licensee ensures that any affiliated company 

18 or service provider maintains such information 

19 under confidentiality provisions comparable to 

20 those in this subsection. 

21 ‘‘(5) LIMITATION ON LIABILITY FOR DISCLO22 SURE.—A licensee or an employee, agent, or affiliate 

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

24 person or to any other party in any judicial pro25 ceeding for any harm, monetary or otherwise, which 

mstockstill on DSKH9S0YB1PROD with BILLS

46 

•HR 1174 IH

1 may arise as a result of disclosure or publication in 

2 any manner. 

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

4 ‘‘(1) PROHIBITION BENEFITTING FROM PRO5 HIBITED GAMBLING ACTIVITY.—A person who is 

6 prohibited from gambling with a licensee by law, or 

7 by order of the Secretary or any court of competent 

8 jurisdiction, including any person on the self-exclu9 sion list as established in accordance with subsection 

10 (d), shall not collect, in any manner or proceeding, 

11 any winnings or recover any losses arising as a re12 sult of any prohibited gambling activity. 

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

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

15 that has been obtained by, or is owed to, any prohib16 ited person by a licensee as a result of bets or wa17 gers made by a prohibited person shall be subject to 

18 forfeiture by order of the Secretary, following notice 

19 to the prohibited person and opportunity to be 

20 heard. 

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

22 funds forfeited pursuant to this subsection shall be 

23 deposited into the general fund of the Treasury. 

mstockstill on DSKH9S0YB1PROD with BILLS

47 

•HR 1174 IH

1 ‘‘(4) PERSONS SELF-EXCLUDED.—Licensees 

2 may not accept bets or wagers from persons on the 

3 list established pursuant to subsection (d)(1)(A). 

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

5 THE LIST OF SELF-EXCLUDED PERSONS.— 

6 ‘‘(1) PUBLIC AWARENESS PROGRAM.— 

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

8 any State or tribal regulatory body that has 

9 been qualified under subsection 5383(o) shall 

10 provide by regulation for the establishment of a 

11 program to alert the public to the existence, 

12 consequences, and availability of the self-exclu13 sion list, and shall prepare and promulgate 

14 written materials to be used in such a program. 

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

16 Regulations prescribed under subparagraph (A) 

17 may require a licensee to make available lit18 erature or screen displays relating to the exist19 ence of the program. 

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

21 of this subsection shall be construed as creating a 

22 legal duty in the Secretary, a qualified State or trib23 al regulatory body, a licensee, or any representative 

24 of a licensee to identify or to exclude problem or 

mstockstill on DSKH9S0YB1PROD with BILLS

48 

•HR 1174 IH

1 compulsive gamblers not on the list of self-excluded 

2 persons. 

3 ‘‘(3) IMMUNITY.—The United States, the Sec4 retary, a qualified State or tribal regulatory body, a 

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

6 shall not be liable to any person in any proceeding 

7 for losses or other damages of any kind arising out 

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

9 that the person was a compulsive, problem, or patho10 logical gambler. 

11 ‘‘§ 5385. Financial transaction providers 

12 ‘‘(a) IN GENERAL.—No financial transaction pro13 vider shall be held liable for engaging in financial activities 

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

15 a licensee, including payments processing activities, unless 

16 such provider has knowledge that the specific financial ac17 tivities or transactions are conducted in violation of this 

18 subchapter and with applicable Federal and State laws. 

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

20 following definitions shall apply: 

21 ‘‘(1) FINANCIAL TRANSACTION PROVIDER.— 

22 The term ‘financial transaction provider’ means a 

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

25 transfer may be initiated, money transmitting busimstockstill on DSKH9S0YB1PROD with BILLS

49 

•HR 1174 IH

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

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

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

6 payment system. 

7 ‘‘(2) OTHER TERMS.— 

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

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

11 meanings given the terms in section 103 of the 

12 Truth in Lending Act. 

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

14 term ‘electronic fund transfer’— 

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

16 in section 903 of the Electronic Fund 

17 Transfer Act, except that the term includes 

18 transfers that would otherwise be excluded 

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

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

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

24 ‘financial institution’ has the meaning given the 

25 term in section 903 of the Electronic Fund 

mstockstill on DSKH9S0YB1PROD with BILLS

50 

•HR 1174 IH

1 Transfer Act, except that such term does not 

2 include a casino, sports book, or other business 

3 at or through which bets or wagers may be 

4 placed or received. 

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

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

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

11 ‘‘(ii) includes an insured credit union 

12 (as defined in section 101 of the Federal 

13 Credit Union Act). 

14 ‘‘(E) MONEY TRANSMITTING BUSINESS

15 AND MONEY TRANSMITTING SERVICE.—The 

16 terms ‘money transmitting business’ and 

17 ‘money transmitting service’ have the meanings 

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

19 without regard to any regulations prescribed by 

20 the Secretary under such section). 

21 ‘‘§ 5386. List of unlawful Internet gambling enter22 prises 

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

24 following definitions shall apply: 

mstockstill on DSKH9S0YB1PROD with BILLS

51 

•HR 1174 IH

1 ‘‘(1) UNLAWFUL INTERNET GAMBLING ENTER2 PRISE.—The term ‘unlawful Internet gambling en3 terprise’ means any person who, more than 10 days 

4 after the date of the enactment of this section— 

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

6 ‘‘(B) knowingly receives or transmits funds 

7 intended primarily for a person described in 

8 subparagraph (A); or 

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

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

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

12 the Director of the Financial Crimes Enforcement 

13 Network. 

14 ‘‘(b) LIST OF UNLAWFUL INTERNET GAMBLING EN15 TERPRISES.— 

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

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

18 Director shall submit to the Secretary a list of un19 lawful Internet gambling enterprises and shall regu20 larly update such list in accordance with the proce21 dures described in paragraph (3). 

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

23 under paragraph (1) shall include the following in24 formation for each such unlawful Internet gambling 

25 enterprise: 

mstockstill on DSKH9S0YB1PROD with BILLS

52 

•HR 1174 IH

1 ‘‘(A) All known Internet Web site address2 es of the enterprise. 

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

4 operators of the enterprise. 

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

6 identifying the financial agents and account 

7 numbers of the enterprise and the persons list8 ed under subparagraph (B). 

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

10 The Secretary shall make available— 

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

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

13 (2) on the Internet Web site of the Secretary of 

14 the Treasury; 

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

16 comply with the regulations prescribed under 

17 the authority provided in section 5364 a copy of 

18 all the information provided under paragraph 

19 (1) in an electronic format compatible with the 

20 Specially Designated Nationals list maintained 

21 by the Office of Foreign Assets Control; and 

22 ‘‘(C) any information required under this 

23 paragraph not later than 10 days after receiv24 ing any new or updated list from the Director. 

mstockstill on DSKH9S0YB1PROD with BILLS

53 

•HR 1174 IH

1 ‘‘(4) PROCEDURES.—The procedures described 

2 in this paragraph are the following: 

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

4 investigate entities that appear to be unlawful 

5 Internet gambling enterprises. An initial inves6 tigation shall be completed before the end of the 

7 60-day period beginning on the date of enact8 ment of this section. After the initial investiga9 tion, the Director shall regularly investigate en10 tities that appear to be unlawful Internet gam11 bling enterprises. If the Director discovers evi12 dence sufficient to prove a prima facie case that 

13 any person is an unlawful Internet gambling 

14 enterprise, the Director shall provide the notice 

15 required under subparagraph (C). 

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

17 tribal, or local law enforcement official, any af18 fected sports organization, any person directly 

19 harmed by unlawful Internet gambling, any fi20 nancial transaction provider, and any inter21 active computer service (as such terms are de22 fined in section 5362) shall have the right, but 

23 not the obligation, to make a written request to 

24 the Director for the addition of any person to 

25 the list of unlawful Internet gambling entermstockstill on DSKH9S0YB1PROD with BILLS

54 

•HR 1174 IH

1 prises. If the Director determines that the evi2 dence submitted is sufficient to prove a prima 

3 facie case that such person is an unlawful 

4 Internet gambling enterprise, the Director shall 

5 provide the notice required under subparagraph 

6 (C) to each person identified as an alleged un7 lawful Internet gambling enterprise. The Direc8 tor also shall provide written notice of its deci9 sion under this subparagraph, including a deci10 sion not to add a person to the list required 

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

12 later than 30 days after the request is received. 

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

14 before adding an unlawful Internet gambling 

15 enterprise, or an owner or operator thereof, to 

16 the list required under paragraph (1), the Di17 rector shall provide written notice to such en18 terprise, owner, or operator. Any enterprise, 

19 owner, or operator receiving such notice may 

20 contest the Director’s determination by written 

21 appeal to the Director not more than 30 days 

22 after receiving notice. 

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

24 person properly submits a written appeal under 

25 subparagraph (C), the Director shall not inmstockstill on DSKH9S0YB1PROD with BILLS

55 

•HR 1174 IH

1 clude such person in the list required under 

2 paragraph (1) unless and until the Director 

3 provides such person with an opportunity for a 

4 hearing not more than 30 days after receiving 

5 written notice of appeal. Not more than 10 days 

6 after an opportunity for hearing is afforded, 

7 whether or not the person requesting the hear8 ing appears at such hearing, the Director shall 

9 proceed to add such person to the list of unlaw10 ful Internet gambling enterprises unless the Di11 rector determines, based on a preponderance of 

12 the evidence, that such person is not an unlaw13 ful Internet gambling enterprise. 

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

15 that the Director determines shall be included 

16 in the list required under paragraph (1) after 

17 such person appears at a hearing described in 

18 subparagraph (D) and any person included in 

19 such list who did not receive the notice required 

20 under subparagraph (C), may petition for in21 junctive relief in the United States District 

22 Court for the District of Columbia, which shall 

23 have exclusive jurisdiction to hear challenges 

24 pursuant to this section. The petitioner shall 

25 have the burden of establishing by a prepondermstockstill on DSKH9S0YB1PROD with BILLS

56 

•HR 1174 IH

1 ance of the evidence that such person is not an 

2 unlawful Internet gambling enterprise. Only 

3 persons designated by the Director for inclusion 

4 on the list of unlawful Internet gambling enter5 prises, and other owners or operators of an en6 terprise to be so listed, shall have standing to 

7 contest the Director’s determination. The court 

8 may enjoin the Director and the Secretary not 

9 to add or remove the petitioner from the list of 

10 unlawful Internet gambling enterprises, and no 

11 other judicial recourse shall be permitted. 

12 ‘‘(c) EFFECT OF LIST.—A financial transaction pro13 vider shall be deemed to have actual knowledge that a per14 son is an unlawful Internet gambling enterprise to the ex15 tent that such person is identified on the list available to 

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

17 financial transaction provider, by the Secretary as de18 scribed in subsection (b)(2), provided that the list shall 

19 not be deemed to be the sole source of actual knowledge. 

20 ‘‘§ 5387. Limitation of licenses in States and Indian 

21 lands 

22 ‘‘(a) STATE OPT-OUT EXERCISE.— 

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

24 ‘‘(A) IN GENERAL.—No licensee may en25 gage, under any license issued under this submstockstill on DSKH9S0YB1PROD with BILLS

57 

•HR 1174 IH

1 chapter, in the operation of an Internet gam2 bling facility that knowingly accepts bets or wa3 gers initiated by persons who reside in any 

4 State which provides notice that it will limit 

5 such bets or wagers, if the Governor or other 

6 chief executive officer of such State informs the 

7 Director of such limitation, in a manner which 

8 clearly identifies the nature and extent of such 

9 limitation, before the end of the period begin10 ning on the date of the enactment of the Inter11 net Gambling Regulation, Consumer Protection, 

12 and Enforcement Act and ending on the date 

13 on which such State’s legislature has conducted 

14 one full general legislative session, where such 

15 session began after the date of the enactment 

16 of such Act, or in accordance with paragraph 

17 (2), until such time as any notice of any 

18 amendment or repeal of such specific limitation 

19 becomes effective under paragraph (2). 

20 ‘‘(B) COORDINATION BETWEEN STATE AND

21 TRIBAL OPT-OUT EXERCISES.—Any State limi22 tation under subparagraph (A) shall not apply 

23 to the acceptance by a licensee of bets or wa24 gers from persons located within the tribal 

25 lands of an Indian tribe that— 

mstockstill on DSKH9S0YB1PROD with BILLS

58 

•HR 1174 IH

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

2 subsection (b) (in which case the tribal 

3 opt-out exercise under such subsection 

4 shall apply); or 

5 ‘‘(ii) would be entitled pursuant to 

6 other applicable law to permit such bets or 

7 wagers to be initiated and received within 

8 its territory without use of the Internet. 

9 ‘‘(C) COORDINATION WITH INDIAN GAMING

10 REGULATORY ACT.—No decision by a State 

11 under this subsection shall be considered in 

12 making any determination with regard to the 

13 ability of an Indian tribe to offer any class of 

14 gambling activity pursuant to section 11 of the 

15 Indian Gaming Regulatory Act. 

16 ‘‘(D) TRIBAL STATUS OR CATEGORY NOT

17 IMPACTED.—Tribal operations of Internet gam18 bling facilities under this subchapter shall not 

19 impact an Indian tribe’s status or category or 

20 class under its land-based activities. 

21 ‘‘(E) NEW NEGOTIATIONS NOT RE22 QUIRED.—Operating under a license issued pur23 suant to this subchapter shall not require, or 

24 impose any requirement on, an Indian tribe to 

25 negotiate a new agreement, or renegotiate any 

mstockstill on DSKH9S0YB1PROD with BILLS

59 

•HR 1174 IH

1 existing agreement, limitation or other provision 

2 of a tribal-State compact, agreement, or other 

3 understanding with respect to gaming or rev4 enue-sharing, with regard to any Internet bet or 

5 wager occurring pursuant to a license issued by 

6 the Secretary under this subchapter. 

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

8 establishment, repeal, or amendment by any State of 

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

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

11 apply, for purposes of this subchapter, beginning on 

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

13 60-day period beginning on the later of— 

14 ‘‘(A) the date a notice of such establish15 ment, repeal, or amendment is provided by the 

16 Governor or other chief executive officer of such 

17 State in writing to the Secretary; or 

18 ‘‘(B) the effective date of such establish19 ment, repeal, or amendment. 

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

21 ‘‘(1) LIMITATIONS IMPOSED BY INDIAN

22 TRIBES.—No Internet gambling licensee knowingly 

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

24 the tribal lands of any Indian tribe which limits such 

25 gambling activities or other contests if the principal 

mstockstill on DSKH9S0YB1PROD with BILLS

60 

•HR 1174 IH

1 chief or other chief executive officer of such Indian 

2 tribe informs the Secretary of such limitation, in a 

3 manner which clearly identifies the nature and ex4 tent of such limitation, before the end of the 90-day 

5 period beginning on the date of the enactment of the 

6 Internet Gambling Regulation, Consumer Protection, 

7 and Enforcement Act, or in accordance with para8 graph (2), until such time as any notice of any 

9 amendment or repeal of such specific limitation be10 comes effective under paragraph (2). 

11 ‘‘(2) CHANGES TO INDIAN TRIBE LIMITA12 TIONS.—The establishment, repeal, or amendment 

13 by any Indian tribe of any limitation referred to in 

14 paragraph (1) after the end of the 90-day period be15 ginning on the date of the enactment of this sub16 chapter shall apply, for purposes of this subchapter, 

17 beginning on the first January 1 that occurs after 

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

19 of— 

20 ‘‘(A) the date a notice of such establish21 ment, repeal, or amendment is provided by the 

22 principal chief or other chief executive officer of 

23 such Indian tribe in writing to the Secretary; or 

24 ‘‘(B) the effective date of such establish25 ment, repeal, or amendment. 

mstockstill on DSKH9S0YB1PROD with BILLS

61 

•HR 1174 IH

1 ‘‘(c) NOTIFICATION AND ENFORCEMENT OF STATE

2 AND INDIAN TRIBE LIMITATIONS.— 

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

4 all licensees and applicants of all States and Indian 

5 tribes that have provided notice pursuant to para6 graph (1) or (2) of subsection (a) or (b), as the case 

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

8 no event fewer than 30 days before the effective date 

9 of such notice. 

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

11 effective measures to ensure that any licensee under 

12 this subchapter, as a condition of the license, com13 plies with any limitation or prohibition imposed by 

14 any State or Indian tribe to which the licensee is 

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

16 be. 

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

18 this subchapter for any licensee knowingly to accept 

19 bets or wagers initiated or otherwise made by per20 sons located within any State or in the tribal lands 

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

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

23 ‘‘(4) STATE ATTORNEY GENERAL ENFORCE24 MENT.—In any case in which the attorney general of 

25 a State, or any State or local law enforcement agenmstockstill on DSKH9S0YB1PROD with BILLS

62 

•HR 1174 IH

1 cy authorized by the State attorney general or by 

2 State statute to prosecute violations of consumer 

3 protection law, has reason to believe that an interest 

4 of the residents of that State has been or is threat5 ened or adversely affected by a violation by a li6 censee pursuant to paragraph (2), the State, or the 

7 State or local law enforcement agency on behalf of 

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

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

10 or jurisdiction in a district court of the United 

11 States located therein, to— 

12 ‘‘(A) enjoin that practice; or 

13 ‘‘(B) enforce compliance with this sub14 chapter. 

15 ‘‘§ 5388. Sports betting prohibited on Internet 

16 ‘‘No licensee under this subchapter shall accept Inter17 net bets or wagers on sporting events, with the exception 

18 of pari-mutuel racing as permitted by law. 

19 ‘‘§ 5389. Prohibition on the use of credit cards for 

20 Internet gambling 

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

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

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

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

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

mstockstill on DSKH9S0YB1PROD with BILLS

63 

•HR 1174 IH

1 is transmitted or otherwise facilitated with a credit card 

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

3 ‘‘(b) EXCEPTION.— 

4 ‘‘(1) CLARIFICATION OF SCOPE.—For any per5 son licensed to take bets or wagers in accordance 

6 with the Interstate Horseracing Act of 1978, the 

7 prohibition in subsection (a) shall only apply to 

8 those activities conducted pursuant to a license 

9 under this subchapter. 

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

11 involved in legal, land-based or State- or tribal-regu12 lated intrastate gambling, the prohibition in sub13 section (a) shall only apply to those activities con14 ducted pursuant to a license under this subchapter. 

15 ‘‘§ 5390. State and tribal lotteries 

16 ‘‘(a) IN GENERAL.—Notwithstanding any other pro17 vision of this subchapter, this subchapter shall not apply 

18 to Internet gambling conducted by any State or tribal lot19 tery authority when conducted in accordance with sub20 paragraph (B) or (C) of section 5362(10), as clarified by 

21 section 5362(10)(E). 

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

23 clarification made by subparagraph (E) of section 

24 5362(10) to the meaning and intent of subparagraphs (B) 

25 and (C) of such section, Internet gambling described in 

mstockstill on DSKH9S0YB1PROD with BILLS

64 

•HR 1174 IH

1 subsection (a) is hereby expressly permitted, and operators 

2 of any State or tribal lottery authority conducting Internet 

3 gambling facilities operating in accordance with such sub4 paragraph (B) or (C), as clarified by such subparagraph 

5 (E), and vendors, suppliers and service providers to such 

6 State or tribal lottery authority, shall not be required to 

7 be licensed under this subchapter. 

8 ‘‘(c) APPLICABILITY OF OTHER PROVISIONS TO LOT9 TERY ACTIVITY.—To clarify existing law, section 1084 of 

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

11 in connection with any Internet gambling conducted by 

12 any State or tribal lottery authority when conducted in 

13 accordance with subparagraph (B) or (C) of section 

14 5362(10), as clarified by section 5362(10)(E): 

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

16 transmission thereof. 

17 ‘‘(2) Any transmission of information assisting 

18 in the placing of bets or wagers. 

19 ‘‘(3) Any transmission entitling the recipient to 

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

21 or for information assisting in the placing of bets or 

22 wagers. 

23 ‘‘(d) AUTHORIZATION OF SPONSOR.—No licensee 

24 may offer services relating to any lottery sponsored by a 

mstockstill on DSKH9S0YB1PROD with BILLS

65 

•HR 1174 IH

1 State, tribal, or other governmental body without the au2 thorization of the official sponsor. 

3 ‘‘§ 5391. Safe harbors 

4 ‘‘It shall be a complete defense against any prosecu5 tion or enforcement action under any Federal or State law 

6 against any person possessing a valid license under this 

7 subchapter that the activity is authorized under and has 

8 been carried out lawfully under the terms of this sub9 chapter. 

10 ‘‘§ 5392. Relation to section 1084 of title 18 and the 

11 Unlawful Internet Gambling Enforcement 

12 Act 

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

14 chapter shall not apply to any Internet bet or wager occur15 ring pursuant to a license issued in accordance with this 

16 subchapter. 

17 ‘‘§ 5393. Cheating and other fraud 

18 ‘‘(a) ELECTRONIC CHEATING DEVICES PROHIB19 ITED.—No person initiating, receiving, or otherwise mak20 ing a bet or wager with a licensee, or sending, receiving, 

21 or inviting information assisting with a bet or wager with 

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

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

24 is designed, constructed, or programmed specifically for 

25 use in obtaining an advantage in any game authorized 

mstockstill on DSKH9S0YB1PROD with BILLS

66 

•HR 1174 IH

1 under this subchapter, where such advantage is prohibited 

2 or otherwise violates the rules of play established by the 

3 licensee. 

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

5 receiving, or otherwise making a bet or wager with a li6 censee, or sending, receiving, or inviting information as7 sisting with a bet or wager with a licensee, knowingly shall 

8 use or possess any cheating device with intent to cheat 

9 or defraud any licensee or other persons placing bets or 

10 wagers with such licensee. 

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

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

13 a permanent injunction enjoining such person from initi14 ating, receiving, or otherwise making bets or wagers or 

15 sending, receiving, or inviting information assisting in the 

16 placing of bets or wagers. 

17 ‘‘(d) CRIMINAL PENALTY.—Whoever violates sub18 section (a) or (b) of this section shall be fined under title 

19 18 or imprisoned for not more than 5 years, or both.’’. 

20 (b) RULES OF CONSTRUCTION.— 

21 (1) TECHNICAL AND CONFORMING AMEND22 MENT.—Section 310(b)(2) of title 31, United States 

23 Code is amended— 

24 (A) by redesignating subparagraph (J) as 

25 subparagraph (K); and 

mstockstill on DSKH9S0YB1PROD with BILLS

67 

•HR 1174 IH

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

2 following new subparagraph: 

3 ‘‘(J) Administer the requirements of sub4 chapter V of chapter 53.’’. 

5 (c) CLERICAL AMENDMENT.—The table of sections 

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

7 by adding at the end the following: 

‘‘SUBCHAPTER V—REGULATION OF LAWFUL INTERNET GAMBLING

‘‘5381. Congressional findings. 

‘‘5382. Definitions. 

‘‘5383. Establishment and administration of licensing program. 

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

Self-Exclusion Program. 

‘‘5385. Financial transaction providers. 

‘‘5386. List of unlawful Internet gambling enterprises. 

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

‘‘5388. Sports betting prohibited on Internet. 

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

‘‘5390. State and tribal lotteries. 

‘‘5391. Safe harbors. 

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

Enforcement Act. 

‘‘5393. Cheating and other fraud.’’. 

8 SEC. 3. REPORT REQUIRED. 

9 (a) IN GENERAL.—Before the end of the 1-year pe10 riod beginning on the effective date of the regulations pre11 scribed under section 5(a), and annually thereafter, the 

12 Secretary shall submit a report to the Congress on the 

13 licensing and regulation of Internet gambling operators. 

14 (b) INFORMATION REQUIRED.—Each report sub15 mitted under subsection (a) shall include the following in16 formation: 

mstockstill on DSKH9S0YB1PROD with BILLS

68 

•HR 1174 IH

1 (1) A comprehensive statement regarding the 

2 prohibitions notified by the States and Indian tribes 

3 pursuant to section 5387 of title 31, United States 

4 Code. 

5 (2) Relevant statistical information on appli6 cants and licenses. 

7 (3) The amount of licensing and user fees col8 lected during the period covered by the report. 

9 (4) Information on regulatory or enforcement 

10 actions undertaken during the period. 

11 (5) Any other information that may be useful 

12 to the Congress in evaluating the effectiveness of the 

13 Act in meeting its purpose, including the provision 

14 of protections against underage gambling, compul15 sive gambling, money laundering, and fraud, and in 

16 combating tax avoidance relating to Internet gam17 bling. 

18 SEC. 4. FEASIBILITY STUDY. 

19 The Secretary of the Treasury, in consultation with 

20 appropriate State or tribal officers or agencies, shall con21 duct a feasibility study on safeguards to address gambling 

22 while impaired through programs such as periodic notices, 

23 periodic testing of individuals to establish cognitive com24 petence, and any other similar option that the Secretary 

mstockstill on DSKH9S0YB1PROD with BILLS

69 

•HR 1174 IH

1 or appropriate State or tribal officers or agencies may de2 termine to be appropriate. 

3 SEC. 5. EFFECTIVE DATE. 

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

5 shall prescribe such regulations as the Secretary may de6 termine to be appropriate to implement subchapter V of 

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

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

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

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

11 of this Act. 

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

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

14 period beginning on the date of the publication of the reg15 ulations in final form in accordance with subsection (a). 

Æ 

mstockstill on DSKH9S0YB1PROD with BILLS