I
106TH CONGRESS
2D SESSION
H. R. 4419
To prevent the use of certain bank instruments for Internet gambling, and
for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 10, 2000
Mr. LEACH (for himself, Mr. LAFALCE, Mrs. ROUKEMA, and Mr. BAKER) in-
troduced the following bill; which was referred to the Committee on
Banking and 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
Funding 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 through any financial in-
stitution; 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) 
APPROPRIATE
FEDERAL
REGULATORY
AGENCY.—The term ‘‘appropriate Federal regulatory
agency’’ means—
(A) in the case of any creditor, or any na-
tional or regional communication network uti-
lized to effect a consumer credit transaction,
the appropriate agency of the agencies referred
to in subsection (a) or (c) of section 108 of the
Truth in Lending Act;
(B) in the case of any financial institution
involved in an electronic fund transfer, or any
operator of a terminal at which an electronic
fund transfer may be initiated or any national
or regional communication network utilized to
effect an electronic fund transfer, the appro-
priate agency of the agencies referred to in sub-
section (a) or (c) of section 917 of the Elec-
tronic Fund Transfer Act; and
(C) in the case of any money transmitting
business, or any national or regional commu-
nication network utilized to effect a money
transmitting service, the Secretary of the
Treasury.
(2) 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);
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.
(3) 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).
(4) INTERNET.—The term ‘‘Internet’’ means
the international computer network of both Federal
and nonfederal interoperable packet switched data
networks.
(5) 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.
(6) 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’’ has the mean-
ing given such term in section 903 of the Elec-
tronic Fund Transfer Act.
(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’’ have the meanings given
such terms in section 5330(d) of title 31,
United States Code.
(E) SECRETARY.—The term ‘‘Secretary’’
means the Secretary of the Treasury.
(c) CIVIL REMEDIES.—
(1) JURISDICTION.—The district courts of the
United States shall have original and exclusive juris-
diction to prevent and restrain violations of this sec-
tion by issuing appropriate orders in accordance
with this section, regardless of whether a prosecu-
tion has been initiated under this section.
(2) PROCEEDINGS.—
(A) INSTITUTION
BY
FEDERAL
GOVERN-
MENT.—
(i) IN GENERAL.—The United States,
acting through the Attorney General or an
appropriate Federal regulatory agency,
may institute proceedings under this sub-
section to prevent or restrain a violation of
this section.
(ii) RELIEF.—Upon application of the
United States under this subparagraph,
the district court may enter a temporary
restraining order or an injunction against
any person to prevent or restrain a viola-
tion of this section if the court determines,
after notice and an opportunity for a hear-
ing, that there is a substantial probability
that such violation has occurred or will
occur.
(B) INSTITUTION
BY
STATE
ATTORNEY
GENERAL.—
(i) IN GENERAL.—The attorney gen-
eral of a State (or other appropriate State
official) in which a violation of this section
allegedly has occurred or will occur, after
providing written notice to the United
States, may institute proceedings under
this subsection to prevent or restrain the
violation.
(ii) RELIEF.—Upon application of the
attorney general (or other appropriate
State official) of an affected State under
this subparagraph, the district court may
enter a temporary restraining order or an
injunction against any person to prevent or
restrain a violation of this section if the
court determines, after notice and an op-
portunity for a hearing, that there is a
substantial probability that such violation
has occurred or will occur.
(C) INDIAN LANDS.—Notwithstanding sub-
paragraphs (A) and (B), for a violation that is
alleged to have occurred, or may occur, on In-
dian lands (as that term is defined in section 4
of the Indian Gaming Regulatory Act)—
(i) the United States shall have the
enforcement authority provided under sub-
paragraph (A); and
(ii) the enforcement authorities speci-
fied in an applicable Tribal-State compact
negotiated under section 11 of the Indian
Gaming Regulatory Act shall be carried
out in accordance with that compact.
(D) EXPIRATION.—Any temporary re-
straining order or preliminary injunction en-
tered pursuant to subparagraph (A) or (B)
shall expire if, and as soon as, the United
States, or the attorney general (or other appro-
priate State official) of the State, as applicable,
notifies the court that issued the order or in-
junction that the United States or the State, as
applicable, will not seek a permanent injunc-
tion.
(3) EXPEDITED PROCEEDINGS.—
(A) IN GENERAL.—In addition to any pro-
ceeding under paragraph (2), a district court
may, in exigent circumstances, enter a tem-
porary restraining order against a person al-
leged to be in violation of this section upon ap-
plication of the United States under paragraph
(2)(A), or the attorney general (or other appro-
priate State official) of an affected State under
paragraph (2)(B), without notice and the op-
portunity for a hearing as provided in rule
65(b) of the Federal Rules of Civil Procedure
transaction, electronic fund transfer, or money
transmitting service shall be liable under this section
for the involvement of such person, or the use of
the facilities of such person—
(A) in any credit transaction, electronic
fund transfer, or money transmitting service de-
scribed in subsection (a); or
(B) in drawing, paying, transferring, or
collecting any check, draft, or other instrument
described in subsection (a).
(2) EXCEPTION FOR KNOWING PARTICIPATION
IN A GAMBLING BUSINESS.—Paragraph (1) shall not
apply with respect to any person referred to in such
paragraph which is a gambling business or which
knowingly participates in any activity referred to in
subparagraph (A) or (B) of such paragraph as an
agent or representative of a gambling business.
SEC. 4. INTERNET GAMBLING IN OR THROUGH FOREIGN
JURISDICTIONS.
(a) IN GENERAL.—It is the sense of the Congress
that, in deliberations between the United States Govern-
ment and any other country on money laundering, corrup-
tion, and crime issues, the United States Government
should encourage the enactment and enforcement of laws
in such country to prevent Internet gambling and the use
of the financial payment and transfer systems to facilitate
Internet gambling.
(b) UNITED STATES VOTES IN INTERNATIONAL FI-
NANCIAL INSTITUTIONS.—The Secretary of the Treasury
shall instruct the United States Executive Directors of
each international financial institution (as defined in sec-
tion 1701(c) of the International Financial Institutions
Act) to oppose any loan, disbursement, or other utilization
of resources by the international financial institution,
other than to address basic human needs, for any country
that the Secretary of the Treasury determines—
(1) permits a high level of participation in, and
the use of the financial payment and transfer sys-
tems to facilitate, Internet gambling by United
States citizens and residents; and
(2) is not effectively implementing measures to
limit participation in, and the use of the financial
payment and transfer systems to facilitate, Internet
gambling by United States citizens and residents.
(c) DENIAL OF ACCESS TO THE PAYMENT SYSTEM.—
In the case of any country with respect to which the Sec-
retary has made a determination under subsection (b), the
Secretary and the Board of Governors of the Federal Re-
serve System shall take such action as the Secretary and
the Chairman of the Board, after joint consultation, deter-
mine to be appropriate to limit or preclude access to the
United States payment system by financial institutions
that are chartered by, or organized under the laws of, such
country or have their principal places of business within
such country.
(d) REPORT
REQUIRED.—The Secretary of the
Treasury shall submit an annual report to the Congress
on the deliberations between the United States and other
countries on issues relating to Internet gambling.
SEC. 5. ENFORCEMENT ACTIONS.
Section 8 of the Federal Deposit Insurance Act (12
U.S.C. 1818) is amended by adding at the end the fol-
lowing new subsection:
‘‘(x) DEPOSITORY INSTITUTION INVOLVEMENT
IN
INTERNET GAMBLING.—Notwithstanding section 3(e) of
the Internet Gambling Funding Prohibition Act, if any ap-
propriate Federal banking agency determines that any in-
sured depository institution is engaged in any of the fol-
lowing activities, the agency may issue an order to such
institution prohibiting such institution from continuing to
engage in such activity:
‘‘(1) Extending credit, or facilitating an exten-
sion of credit, electronic fund transfer, or money
transmitting service with the actual knowledge that
any person is violating subsection (a) or (b) of the
Internet Gambling Funding Prohibition Act in con-
nection with such extension of credit, electronic fund
transfer, or money transmitting service.
‘‘(2) Paying, transferring, or collecting on any
check, draft, or other instrument drawn on any de-
pository institution with the actual knowledge that
any person is violating subsection (a) or (b) of the
Internet Gambling Funding Prohibition Act in con-
nection with such check, draft, or other instru-
ment.’’.
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