I
107TH CONGRESS
1ST SESSION
H. R. 2579
To prevent the use of certain bank instruments for Internet gambling, and
for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 20, 2001
Mr. LAFALCE introduced the following bill; which was referred to the Com-
mittee on Financial Services, and in addition to the Committee on the
Judiciary, for a period to be subsequently determined by the Speaker, in
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned
A BILL
To prevent the use of certain bank instruments for Internet
gambling, and for other purposes.
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
Payments Prohibition Act’’.
SEC. 2. FINDINGS.
The Congress finds as follows:
(1) Internet gambling is primarily funded
through personal use of bank instruments, including
credit cards and wire transfers.
(2) The National Gambling Impact Study Com-
mission in 1999 recommended the passage of legisla-
tion to prohibit wire transfers to Internet gambling
sites or the banks which represent them.
(3) Internet gambling is a major cause of debt
collection problems for insured depository institu-
tions and the consumer credit industry.
(4) Internet gambling conducted through off-
shore jurisdictions has been identified by United
States law enforcement officials as a significant
money laundering vulnerability.
SEC. 3. PROHIBITION ON ACCEPTANCE OF ANY BANK IN-
STRUMENT FOR INTERNET GAMBLING.
(a) IN GENERAL.—No person engaged in a gambling
business may knowingly accept, in connection with the
participation of another person in Internet gambling—
(1) credit, or the proceeds of credit, extended to
or on behalf of such other person (including credit
extended through the use of a credit card);
(2) an electronic fund transfer or funds trans-
mitted by or through a money transmitting business,
or the proceeds of an electronic fund transfer or
money transmitting service, from or on behalf of the
other person;
(3) any check, draft, or similar instrument
which is drawn by or on behalf of the other person
and is drawn on or payable at or through any finan-
cial institution; or
(4) the proceeds of any other form of financial
transaction as the Secretary may prescribe by regu-
lation which involves a financial institution as a
payor or financial intermediary on behalf of or for
the benefit of the other person.
(b) DEFINITIONS.—For purposes of this Act, the fol-
lowing definitions shall apply:
(1) BETS
OR
WAGERS.—The term ‘‘bets or
wagers’’—
(A) means the staking or risking by any
person of something of value upon the outcome
of a contest of others, a sporting event, or a
game predominantly subject to chance, upon an
agreement or understanding that the person or
another person will receive something of greater
value than the amount staked or risked in the
event of a certain outcome;
(B) includes the purchase of a chance or
opportunity to win a lottery or other prize
(which opportunity to win is predominantly sub-
ject to chance);
(C) includes any scheme of a type de-
scribed in section 3702 of title 28; and
(D) does not include—
(i) any bona fide business transaction
governed by the securities laws (as that
term is defined in section 3(a)(47) of the
Securities Exchange Act of 1934) for the
purchase or sale at a future date of securi-
ties (as that term is defined in section
3(a)(10) of such Act);
(ii) any transaction on or subject to
the rules of a contract market designated
pursuant to section 5 of the Commodity
Exchange Act;
(iii) any over-the-counter derivative
instrument;
(iv) any contract of indemnity or
guarantee;
(v) any contract for life, health, or ac-
cident insurance; or
(vi) any participation in a simulation
sports game or an educational game or
contest that—
(I) is not dependent solely on the
outcome of any single sporting event
or nonparticipant’s singular individual
performance in any single sporting
event;
(II) has an outcome that reflects
the relative knowledge and skill of the
participants with such outcome deter-
mined predominantly by accumulated
statistical results of sporting events;
and
(III) offers a prize or award to a
participant that is established in ad-
vance of the game or contest and is
not determined by the number of par-
ticipants or the amount of any fees
paid by those participants.
(2) GAMBLING
BUSINESS.—The term ‘‘gam-
bling business’’ means—
(A) a business that is conducted at a gam-
bling establishment;
(B) a business that—
(i) involves—
(I) the placing, receiving, or oth-
erwise making of bets or wagers; or
(II) the offering to engage in the
placing, receiving, or otherwise mak-
ing of bets or wagers;
(ii) involves 1 or more persons who
conduct, finance, manage, supervise, direct,
or own all or part of such business; and
(iii) has been or remains in substan-
tially continuous operation for a period in
excess of 10 days or has a gross revenue
of $2,000 or more from such business dur-
ing any 24-hour period; and
(C) any agent who knowingly solicits for a
business described in subparagraph (A) or (B).
(3) INTERNET.—The term ‘‘Internet’’ means
the international computer network of interoperable
packet switched data networks.
(4) INTERNET GAMBLING.—The term ‘‘Internet
gambling’’ means to place, receive, or otherwise
make a bet or wager by any means which involves
the use, at least in part, of the Internet.
(5) OTHER TERMS.—
(A) CREDIT; 
CREDITOR; 
AND
CREDIT
CARD.—The terms ‘‘credit’’, ‘‘creditor’’, and
‘‘credit card’’ have the meanings given such
terms in section 103 of the Truth in Lending
Act.
(B) ELECTRONIC FUND TRANSFER.—The
term ‘‘electronic fund transfer’’—
(i) has the meaning given such term
in section 903 of the Electronic Fund
Transfer Act; and
(ii) includes any fund transfer covered
by Article 4 of the Uniform Commercial
Code, as in effect in any State.
(C) FINANCIAL
INSTITUTION.—The term
‘‘financial institution’’ has the meaning given
such term in section 903 of the Electronic
Fund Transfer Act.
(D) MONEY TRANSMITTING BUSINESS AND
MONEY
TRANSMITTING
SERVICE.—The terms
‘‘money transmitting business’’ and ‘‘money
transmitting service’’—
(i) have the meanings given such
terms in section 5330(d) of title 31,
United States Code; and
(ii) include any person involved in fa-
cilitating payments and fund transfers over
the Internet, such as third-party payment
facilitators.