IB 

Union Calendar No. 405 

109TH CONGRESS 

2D SESSION H. R. 4777 

[Report No. 109–552, Part I] 

To amend title 18, United States Code, to expand and modernize the 

prohibition against interstate gambling, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 16, 2006 

Mr. GOODLATTE (for himself, Mr. BOUCHER, Mr. WOLF, Mr. MCINTYRE, Mr. 

PITTS, Mr. PENCE, Mr. SHADEGG, Mr. ADERHOLT, Mr. AKIN, Mr. ALEXANDER, Mr. BACHUS, Mr. BAKER, Mr. BARRETT of South Carolina, Mr. 

BARTLETT of Maryland, Mr. BASS, Mr. BOEHLERT, Mr. BONNER, Mr. 

BOOZMAN, Mr. BOUSTANY, Mr. BURGESS, Mr. BURTON of Indiana, Mr. 

BUYER, Mr. CANTOR, Mrs. CAPITO, Mr. CHABOT, Mr. COBLE, Mr. 

CONAWAY, Mr. CRENSHAW, Mr. CULBERSON, Mrs. JO ANN DAVIS of Virginia, Mr. TOM DAVIS of Virginia, Mr. DEAL of Georgia, Mr. DEFAZIO, 

Mr. LINCOLN DIAZ-BALART of Florida, Mrs. DRAKE, Mr. DUNCAN, Mr. 

EHLERS, Mrs. EMERSON, Mr. EVERETT, Mr. FORBES, Mr. 

FORTENBERRY, Mr. FRANKS of Arizona, Mr. FORTUN ̃O, Mr. FRELINGHUYSEN, Ms. FOXX, Mr. GALLEGLY, Mr. GILCHREST, Mr. GILLMOR, Mr. 

GINGREY, Mr. GOHMERT, Mr. GOODE, Mr. GUTKNECHT, Ms. HART, Mr. 

HAYES, Mr. HEFLEY, Mr. HERGER, Mr. HOBSON, Mr. HOEKSTRA, Mr. 

HOSTETTLER, Mr. INGLIS of South Carolina, Mr. ISTOOK, Mr. JENKINS, 

Mr. JINDAL, Mrs. JOHNSON of Connecticut, Mr. JONES of North Carolina, Mr. KELLER, Mrs. KELLY, Mr. KENNEDY of Minnesota, Mr. KING

of Iowa, Mr. KINGSTON, Mr. KUHL of New York, Mr. LEWIS of California, Mr. LINDER, Mr. LUCAS, Mr. DANIEL E. LUNGREN of California, 

Mr. MCCRERY, Mr. MCKEON, Mr. MILLER of Florida, Mr. MORAN of 

Kansas, Mr. MORAN of Virginia, Mrs. MUSGRAVE, Mrs. MYRICK, Mr. 

NEUGEBAUER, Mr. NORWOOD, Mr. NUSSLE, Mr. OSBORNE, Mr. PETERSON of Minnesota, Mr. POE, Mr. PUTNAM, Mr. RAMSTAD, Mr. REGULA, 

Mr. REHBERG, Mr. REYNOLDS, Mr. ROGERS of Alabama, Mr. ROGERS

of Michigan, Mr. SCHWARZ of Michigan, Mr. SHIMKUS, Mr. SHUSTER, 

Mr. SIMMONS, Mr. SMITH of Texas, Mr. SODREL, Mr. SOUDER, Mr. SULLIVAN, Mr. TERRY, Mr. THOMAS, Mr. TIAHRT, Mr. WALDEN of Oregon, 

Mr. WALSH, Mr. WELDON of Florida, Mr. WESTMORELAND, Mr. WICKVerDate Aug 31 2005 00:10 Sep 23, 2006 Jkt 049200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H4777.RH H4777

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ER, Mr. WILSON of South Carolina, Mrs. WILSON of New Mexico, Mr. 

BRADY of Texas, Mr. DELAY, and Mr. LAHOOD) introduced the following 

bill; which was referred to the Committee on the Judiciary 

JULY 10, 2006 

Reported with an amendment, and referred to the Committee on Energy and 

Commerce for a period ending not later than September 15, 2006, for 

consideration of such provisions of the bill and amendment as fall within 

the jurisdiction of that committee pursuant to clause 1(f), rule X 

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

SEPTEMBER 15, 2006 

Referral to the Committee on Energy and Commerce extended for a period 

ending not later than September 22, 2006 

SEPTEMBER 22, 2006 

Additional sponsors: Mr. HUNTER, Mr. BLUNT, Mr. GENE GREEN of Texas, 

Mr. CAMP of Michigan, Mr. EDWARDS, Mr. ETHERIDGE, Mr. PETERSON

of Pennsylvania, Mr. PRICE of North Carolina, Mr. SESSIONS, Mr. 

MARCHANT, Mr. DAVIS of Tennessee, Mr. CARDOZA, Mr. CHANDLER, Mr. 

MCCAUL of Texas, Mr. FEENEY, Mr. KIRK, Mr. UPTON, Mr. BERRY, Mr. 

BROWN of South Carolina, Mr. CRAMER, Mrs. CUBIN, Mr. FOLEY, Ms. 

GRANGER, Mr. HALL, Mr. HULSHOF, Mr. LEWIS of Kentucky, Mr. 

SCOTT of Georgia, Mr. TAYLOR of North Carolina, Mr. THORNBERRY, 

Mr. HAYWORTH, and Miss MCMORRIS

SEPTEMBER 22, 2006 

The Committee on Energy and Commerce discharged; committed to the Committee of the Whole House on the State of the Union and ordered to be 

printed 

[For text of introduced bill, see copy of bill as introduced on February 16, 2006] 

A BILL 

To amend title 18, United States Code, to expand and modernize the prohibition against interstate 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, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Internet Gambling Pro3 hibition Act’’. 

4 SEC. 2. DEFINITIONS. 

5 Section 1081 of title 18, United States Code, is amend6 ed— 

7 (1) by designating the five undesignated para8 graphs that begin with ‘‘The term’’ as paragraphs (1) 

9 through (5), respectively; 

10 (2) by amending paragraph (5), as so des11 ignated, to read as follows: 

12 ‘‘(5) The term ‘communication facility’ means 

13 any and all instrumentalities, personnel, and services 

14 (among other things, the receipt, forwarding, or deliv15 ery of communications) used or useful in the trans16 mission of writings, signs, pictures, and sounds of all 

17 kinds by aid of wire, cable, radio, or an electro18 magnetic, photoelectronic or photooptical system, or 

19 other like connection (whether fixed or mobile) be20 tween the points of origin and reception of such 

21 transmission.’’; and 

22 (3) by adding at the end the following: 

23 ‘‘(6) The term ‘bets or wagers’— 

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

25 person of something of value upon the outcome of 

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


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1 predominantly subject to chance, upon an agree2 ment or understanding that the person or an3 other person will receive something of greater 

4 value than the amount staked or risked in the 

5 event of a certain outcome; 

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

7 opportunity to win a lottery or other prize 

8 (which opportunity to win is predominantly 

9 subject to chance); and 

10 ‘‘(C) does not include— 

11 ‘‘(i) a bona fide business transaction 

12 governed by the securities laws (as that 

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

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

15 78c(a)(47))) for the purchase or sale at a 

16 future date of securities (as that term is de17 fined in section 3(a)(10) of the Securities 

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

19 78c(a)(10))); 

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

21 rules of a contract market designated pursu22 ant to section 5 of the Commodity Exchange 

23 Act (7 U.S.C. 7) or to any transaction sub24 ject to an exemption pursuant to section 

25 4(c) of such Act; 


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1 ‘‘(iii) any over-the-counter derivative 

2 instrument; 

3 ‘‘(iv) a contract of indemnity or guar4 antee; 

5 ‘‘(v) a contract for life, health, or acci6 dent insurance; 

7 ‘‘(vi) participation in any game or 

8 contest in which participants do not stake 

9 or risk anything of value other than— 

10 ‘‘(I) personal efforts of the partici11 pants in playing the game or contest 

12 or obtaining access to the Internet; or 

13 ‘‘(II) point or credits that the 

14 sponsor of the game or contest provides 

15 to participants free of charge and that 

16 can be used or redeemed only for par17 ticipation in games or contests offered 

18 by the sponsor; or 

19 ‘‘(vii) participation in any simulation 

20 sports game or educational game or contest 

21 in which (if the game or contest involves a 

22 team or teams) all teams are fictional and 

23 no team is a member of an amateur or pro24 fessional sports organization (as those terms 


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1 are defined in section 3701 of title 28) and 

2 that meets the following conditions: 

3 ‘‘(I) All prizes and awards offered 

4 to winning participants are established 

5 and made known to the participants 

6 in advance of the game or contest and 

7 their value is not determined by the 

8 number of participants or the amount 

9 of any fees paid by those participants. 

10 ‘‘(II) All winning outcomes reflect 

11 the relative knowledge and skill of the 

12 participants and are determined pre13 dominantly by accumulated statistical 

14 results of the performance of individ15 uals (athletes in the case of sports 

16 events) in multiple real-world sporting 

17 or other events. 

18 ‘‘(III) No winning outcome is 

19 based— 

20 ‘‘(aa) on the score, point21 spread or any performance or per22 formances of any single real-world 

23 team or any combination of such 

24 teams; or 


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1 ‘‘(bb) solely on any single 

2 performance of an individual ath3 lete in any single real-world 

4 sporting or other event. 

5 ‘‘(7) The term ‘foreign jurisdiction’ means a ju6 risdiction of a foreign country or political subdivision 

7 thereof. 

8 ‘‘(8) The term ‘gambling business’ means a busi9 ness of betting or wagering; 

10 ‘‘(9) The term ‘information assisting in the plac11 ing of bets or wagers’ means information knowingly 

12 transmitted by an individual in a gambling business 

13 for use in placing, receiving, making, or otherwise en14 abling or facilitating a bet or wager and does not in15 clude— 

16 ‘‘(A) any posting or reporting of any edu17 cational information on how to make a legal bet 

18 or wager or the nature of betting or wagering, as 

19 long as such posting or reporting does not solicit 

20 or provide information for the purpose of facili21 tating or enabling the placing or receipt of bets 

22 or wagers in a jurisdiction where such betting is 

23 illegal; or 

24 ‘‘(B) advertising relating to betting or wa25 gering in a jurisdiction where such betting or 


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1 wagering is legal, as long as such advertising 

2 does not solicit or provide information for the 

3 purpose of facilitating or enabling the placing or 

4 receipt of bets or wagers in a jurisdiction where 

5 such betting is illegal. 

6 ‘‘(10) The term ‘person’ includes a government 

7 (including any governmental entity (as defined in 

8 section 3701(2) of title 28)). 

9 ‘‘(11) The term ‘State’ means a State of the 

10 United States, the District of Columbia, or a com11 monwealth, territory, or possession of the United 

12 States. 

13 ‘‘(12) The terms ‘credit’, ‘creditor’, and ‘credit 

14 card’ have the meanings given such terms in section 

15 103 of the Truth in Lending Act. 

16 ‘‘(13) The term ‘electronic fund transfer’— 

17 ‘‘(A) has the meaning given such term in 

18 section 903 of the Electronic Fund Transfer Act; 

19 or 

20 ‘‘(B) any fund transfer covered by Article 

21 4A of the Uniform Commercial Code, as in effect 

22 in any State. 

23 ‘‘(14) The term ‘financial institution’ has the 

24 meaning given such term in section 903 of the Elec25 tronic Fund Transfer Act. 


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1 ‘‘(15) The term ‘insured depository institu2 tion’— 

3 ‘‘(A) has the same meaning as in section 

4 3(c) of the Federal Deposit Insurance Act; and 

5 ‘‘(B) includes any insured credit union (as 

6 defined in section 101 of the Federal Credit 

7 Union Act). 

8 ‘‘(16) The terms ‘money transmitting business’ 

9 and ‘money transmitting service’ have the meanings 

10 given such terms in section 5330(d) of title 31, United 

11 States Code. 

12 ‘‘(17) The terms ‘own or control’ and to be 

13 ‘owned or controlled’ have the same meanings as in 

14 section 2(a)(2) of the Bank Holding Company Act of 

15 1956. 

16 ‘‘(18) The term ‘Secretary’ means the Secretary 

17 of the Treasury. 

18 ‘‘(19) The term ‘Tribe’ or ‘tribal’ means an In19 dian tribe, as defined under section 4(5) of the Indian 

20 Gaming Regulatory Act of 1988.’’. 

21 SEC. 3. MODIFICATION OF EXISTING PROHIBITION. 

22 Section 1084 of title 18, United States Code, is amend23 ed to read as follows: 


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1 ‘‘§ 1084. Use of a communication facility to transmit 

2 bets or wagers; penalties 

3 ‘‘(a) Except as otherwise provided in this section, who4 ever, being engaged in a gambling business, knowingly uses 

5 a communication facility— 

6 ‘‘(1) for the transmission in interstate or foreign 

7 commerce, within the special maritime and territorial 

8 jurisdiction of the United States, or to or from any 

9 place outside the jurisdiction of any nation with re10 spect to any transmission to or from the United 

11 States, of bets or wagers, or information assisting in 

12 the placing of bets or wagers; or 

13 ‘‘(2) for the transmission of a communication in 

14 interstate or foreign commerce, within the special 

15 maritime and territorial jurisdiction of the United 

16 States, or to or from any place outside the jurisdic17 tion of any nation with respect to any transmission 

18 to or from the United States, which entitles the recipi19 ent to receive money or credit as a result of bets or 

20 wagers, or for information assisting in the placing of 

21 bets or wagers; 

22 shall be fined under this title or imprisoned not more than 

23 five years, or both. 

24 ‘‘(b) Except as otherwise provided in this section, who25 ever, being engaged in a gambling business, knowingly ac26 cepts, in connection with the transmission of a communicaVerDate Aug 31 2005 00:10 Sep 23, 2006 Jkt 049200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6203 E:\BILLS\H4777.RH H4777

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1 tion in interstate or foreign commerce, within the special 

2 maritime and territorial jurisdiction of the United States, 

3 or to or from any place outside the jurisdiction of any na4 tion with respect to any transmission to or from the United 

5 States of bets or wagers or information assisting in the 

6 placing of bets or wagers— 

7 ‘‘(1) credit, or the proceeds of credit, extended to 

8 or on behalf of another (including credit extended 

9 through the use of a credit card); 

10 ‘‘(2) an electronic fund transfer or funds trans11 mitted by or through a money transmitting business, 

12 or the proceeds of an electronic fund transfer or 

13 money transmitting service, from or on behalf of the 

14 other person; 

15 ‘‘(3) any check, draft, or similar instrument 

16 which is drawn by or on behalf of the other person 

17 and is drawn on or payable through any financial 

18 institution; or 

19 ‘‘(4) the proceeds of any other form of financial 

20 transaction as the Secretary of the Treasury may pre21 scribe by regulation which involves a financial insti22 tution as a payor or financial intermediary on behalf 

23 of or for the benefit of the other person, 

24 shall be fined under this title or imprisoned not more than 

25 five years, or both. 


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1 ‘‘(c) Nothing in this section prohibits— 

2 ‘‘(1) the transmission of information assisting in 

3 the placing of bets or wagers for use in news reporting 

4 if such transmission does not solicit or provide infor5 mation for the purpose of facilitating or enabling the 

6 placing or receipt of bets or wagers in a jurisdiction 

7 where such betting is illegal; 

8 ‘‘(2) the transmission of information assisting in 

9 the placing of bets or wagers from a State or foreign 

10 country where such betting or wagering is permitted 

11 under Federal, State, tribal, or local law into a State 

12 or foreign country in which such betting on the same 

13 event is permitted under Federal, State, tribal, or 

14 local law; or 

15 ‘‘(3) the interstate transmission of information 

16 relating to a State-specific lottery between a State or 

17 foreign country where such betting or wagering is 

18 permitted under Federal, State, tribal, or local law 

19 and an out-of-State data center for the purposes of as20 sisting in the operation of such State-specific lottery. 

21 ‘‘(d) Nothing in this section prohibits the use of a com22 munication facility for the transmission of bets or wagers 

23 or information assisting in the placing of bets or wagers, 

24 if— 


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1 ‘‘(1) at the time the transmission occurs, the in2 dividual or entity placing the bets or wagers or infor3 mation assisting in the placing of bets or wagers, the 

4 gambling business, and any facility or support service 

5 processing those bets or wagers is physically located 

6 in the same State, and the State has a secure and ef7 fective customer verification and age verification sys8 tem to assure compliance with age and residence re9 quirements, and for class II or class III gaming 

10 under the Indian Gaming Regulatory Act, are phys11 ically located on Indian lands within that State; 

12 ‘‘(2) the State or Tribe has explicitly authorized 

13 such bets and wagers; 

14 ‘‘(3) the State has explicitly authorized and li15 censed the operation of the gambling business, any fa16 cility processing the bets and wagers, and the support 

17 service within its borders or the Tribe has explicitly 

18 authorized and licensed the operation of such gam19 bling business, any facility processing the bets and 

20 wagers, and the support service on Indian lands with21 in its jurisdiction; 

22 ‘‘(4) with respect to class II or class III gaming, 

23 the game is permitted under and conducted in accord24 ance with the Indian Gaming Regulatory Act; 


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1 ‘‘(5) with respect to class III gaming under the 

2 Indian Gaming Regulatory Act, the game is author3 ized under, and is conducted in accordance with, the 

4 respective Tribal-State compact of the Tribe having 

5 jurisdiction over the Indian lands where the indi6 vidual or entity placing the bets or wagers or infor7 mation assisting in the placing of bets or wagers, the 

8 gambling business, and any facility or support service 

9 processing those bets or wagers are physically located; 

10 and 

11 ‘‘(6) with respect to class III gaming under the 

12 Indian Gaming Regulatory Act, each such Tribal13 State compact expressly provides that the game may 

14 be conducted using a communication facility to trans15 mit bets or wagers or information assisting in the 

16 placing of bets or wagers. 

17 ‘‘(e) Nothing in this section creates immunity from 

18 criminal prosecution under any laws of any State or Tribe. 

19 ‘‘(f) Nothing in this section authorizes activity that is 

20 prohibited under chapter 178 of title 28, United States 

21 Code. 

22 ‘‘(g) When any common carrier, subject to the jurisdic23 tion of the Federal Communications Commission, is noti24 fied in writing by a Federal, State, tribal or local law en25 forcement agency, acting within its jurisdiction, that any 


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1 communication facility furnished by it is being used or will 

2 be used by its subscriber for the purpose of transmitting 

3 or receiving gambling information, in interstate or foreign 

4 commerce, within the special maritime and territorial ju5 risdiction of the United States, or to or from any place out6 side the jurisdiction of any nation with respect to any 

7 transmission to or from the United States in violation of 

8 Federal, State, tribal or local law, it shall discontinue or 

9 refuse, the leasing, furnishing, or maintaining of such facil10 ity, after reasonable notice to the subscriber, but no dam11 ages, penalty or forfeiture, civil or criminal, shall be found 

12 against any common carrier for any act done in compli13 ance with any notice received from a law enforcement agen14 cy. Nothing in this section shall be deemed to prejudice the 

15 right of any person affected thereby to secure an appro16 priate determination, as otherwise provided by law, in a 

17 Federal court or in a State, tribal, or local tribunal or 

18 agency, that such facility should not be discontinued or re19 moved, or should be restored. 

20 ‘‘(h)(1) A Federal, State, tribal, or local law enforce21 ment agency, acting within its jurisdiction may, in a civil 

22 action, obtain injunctive or declaratory relief to restrain 

23 or prevent any person from paying or assisting in the pay24 ment of bets or wagers, or communicating information as25 sisting in the placing of bets or wagers, in interstate or 


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1 foreign commerce, within the special maritime and terri2 torial jurisdiction of the United States, or to or from any 

3 place outside the jurisdiction of any nation with respect to 

4 any transmission to or from the United States in violation 

5 of Federal, State, tribal, or local law. 

6 ‘‘(2) No damages, penalty, or forfeiture, civil or crimi7 nal, shall be found against any person or entity for any 

8 act done in compliance with any notice received from a law 

9 enforcement agency. 

10 ‘‘(3) Relief granted under paragraph (1) against an 

11 interactive computer service (as defined in section 230(f) 

12 of the Communications Act of 1934) shall— 

13 ‘‘(A) be limited to the removal of, or disabling of 

14 access to, an online site violating this section, or a 

15 hypertext link to an online site violating this section, 

16 that resides on a computer server that such service 

17 controls or operates; except this limitation shall not 

18 apply if the service is violating this section or is in 

19 active concert with a person who is violating this sec20 tion and receives actual notice of the relief; 

21 ‘‘(B) be available only after notice to the inter22 active computer service and an opportunity for the 

23 service to appear are provided; 

24 ‘‘(C) not impose any obligation on an interactive 

25 computer service to monitor its service or to affirmaVerDate Aug 31 2005 00:10 Sep 23, 2006 Jkt 049200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6203 E:\BILLS\H4777.RH H4777

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1 tively seek facts indicating activity violating this sec2 tion; 

3 ‘‘(D) specify the interactive computer service to 

4 which it applies; and 

5 ‘‘(E) specifically identify the location of the on6 line site or hypertext link to be removed or access to 

7 which is to be disabled.’’. 

8 SEC. 4. AUTHORIZATION OF APPROPRIATIONS. 

9 In addition to any other sums authorized to be appro10 priated for this purpose, there are authorized to be appro11 priated to the Department of Justice for each of fiscal years 

12 2007 through 2010 $10,000,000 for investigations and pros13 ecutions of violations of section 1084 of title 18, United 

14 States Code. 

15 SEC. 5. RULE OF CONSTRUCTION. 

16 Nothing in this Act may be construed to prohibit any 

17 activity that is allowed under Public Law 95–515 as 

18 amended (15 U.S.C. 3001 et seq.). 

19 SEC. 6. SENSE OF CONGRESS. 

20 It is the sense of Congress that this Act does not change 

21 which activities related to horse racing may or may not 

22 be allowed under Federal law; section 5 is intended to ad23 dress concerns that this Act could have the effect of changing 

24 the existing relationship between the Interstate Horseracing 

25 Act (15 U.S.C. 3001 et seq.), and other Federal statutes that 


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1 were in effect at the time of this Act’s consideration; this 

2 Act is not intended to change that relationship; and this 

3 Act is not intended to resolve any existing disagreements 

4 over how to interpret the relationship between the Interstate 

5 Horseracing Act and other Federal statutes. 

6 SEC. 7. RULE OF CONSTRUCTION. 

7 Nothing in this Act may be construed to preempt State 

8 law prohibiting gambling. 


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Union Calendar No. 405 

109TH CONGRESS 

2D SESSION H. R. 4777 

[Report No. 109

–552, Part I] 

A BILL 

To amend title 18, United States Code, to expand 

gambling, and for other purposes. and modernize the prohibition against interstate 

SEPTEMBER 22, 2006 

The Committee on Energy and Commerce discharged; 

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


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