I 
110TH CONGRESS 
1ST SESSION H. R. 2607 
To amend the Internal Revenue Code of 1986 to regulate internet gambling. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 7, 2007 
Mr. MCDERMOTT introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to regulate 
internet gambling. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Internet Gambling 
Regulation and Tax Enforcement Act of 2007’’. 
SEC. 2. FEDERAL LICENSING REQUIREMENT FOR INTER-
NET GAMBLING OPERATORS. 
(a) IN GENERAL.—Chapter 36 of the Internal Rev-
enue Code of 1986 (relating to certain other excise taxes) 
is amended by adding at the end the following new sub-
chapter: 
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‘‘Subchapter E—Internet Gambling Operators 
‘‘Sec. 4491. Definitions. 
‘‘SEC. 4491. DEFINITIONS. 
‘‘For purposes of this subchapter, the following defi-
nitions shall apply: 
‘‘(1) DIRECTOR.—The term ‘director’ means 
the Director of the Financial Crimes Enforcement 
Network. 
‘‘(2) BET OR WAGER.—The term ‘bet or wager’ 
shall have the same meaning as in section 5362(1) 
of chapter 53 of title 31, United States Code. 
‘‘(3) LICENSEE.—The term ‘licensee’ shall 
mean an Internet gambling operator licensed by the 
Director in accordance with this subchapter. 
‘‘(4) INTERNET.—The term ‘Internet’ means 
the international computer network of interoperable 
packet switched data networks. 
‘‘(5) LICENSE FEES.— 
‘‘(A) LICENSE FEE.— 
‘‘(i) 
IN
GENERAL.—Each 
licensee 
shall be required to pay to the Director 
during each 30-day period of operation a 
license fee of 2 percent of all funds depos-
ited with or on behalf of the licensee by 
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any person for the purpose of placing a bet 
during the preceding 30-day period. 
‘‘(ii) 
DISPOSITION.—Amounts 
col-
lected by the Director as license fees shall 
be deposited in the general fund of the 
Treasury and treated as revenue. 
‘‘(B) DIRECT AND EXCLUSIVE OBLIGATION 
OF LICENSEE.—The license fee shall be the di-
rect and exclusive obligation of the licensee and 
may not be deducted from the amounts avail-
able as deposits to the person placing a bet. 
‘‘(6) APPROVAL
OF
LICENSE.—The Director 
shall grant licenses under this subchapter if, in the 
Director’s sole discretion, the applicant meets the 
criteria set by the Director and is generally fit to en-
gage in the business of Internet gambling. 
‘‘(7) SAFEGUARDS REQUIRED OF LICENSEE.— 
No person shall receive a license under this section 
unless the person implements the following require-
ments with respect to any Internet bet or wager— 
‘‘(A) appropriate mechanisms to ensure 
that all taxes relating to Internet gambling due 
to Federal and State governments from individ-
uals engaged in Internet gambling are collected 
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at the time of any payment of any proceeds of 
Internet gambling; 
‘‘(B) appropriate mechanisms to ensure 
that all taxes relating to Internet gambling due 
to Federal and State governments from any 
persons licensed under this Act are collected as 
required by law; and 
‘‘(C) appropriate mechanisms to ensure 
that the license fee is paid to the Director 
under subsection (e).’’. 
(b) CLERICAL AMENDMENT.—The table of sub-
chapters for chapter 36 of such Code is amended by add-
ing at the end the following new subchapter: 
‘‘Subchapter E. Internet gambling operators.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on January 1, 2008. 
Æ 
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