I 
108TH CONGRESS 
1ST SESSION 
H. R. 131
To prevent fraud and deception in network recreational games. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 7, 2003
Ms. KILPATRICK introduced the following bill; which was referred to the 
Committee on Energy and Commerce 
A BILL 
To prevent fraud and deception in network recreational 
games.
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 ‘‘Consumer Protection 
for On-Line Games Act’’. 
SEC. 2. FEDERAL TRADE COMMISSION RULES REQUIRED. 
(a) IN GENERAL.—The Commission shall prescribe 
rules in accordance with this section to prohibit unfair and 
deceptive acts and practices in the labeling and advertising 
of games of chance and games of skill offered by means
of the communications networks by network game opera-
tors. Such rules shall—
(1) prohibit network game operators from mak-
ing false, nonsubstantiated, nonverifiable, or mis-
leading claims regarding—
(A) the fairness of any specific such game 
of chance or game of skill, or combination 
thereof played by the consumer; 
(B) whether the game offered is a game of 
skill or a game of chance, or a combination 
thereof; and 
(C) if the game offered is a game of 
chance, or a combination of skill and chance, 
whether all participants (including the game op-
erator) are accorded equal or unequal chance; 
and 
(2) prohibit such operators from displaying or 
advertising any seal or insignia attesting to the fair-
ness of any game of chance or game of skill, or other 
matters described in paragraph (1), unless such seal 
or insignia has been awarded by a self-regulatory or-
ganization that complies with section 4. 
(b) EVASIONS.—The rules issued by the Commission 
under this section shall include provisions to prohibit un-
fair or deceptive acts or practices that evade such rules
or undermine the rights provided to customers under this 
Act. 
SEC. 4. ROLE OF SELF-REGULATORY ORGANIZATIONS. 
For purposes of section 3(a)(2), a self-regulatory or-
ganization does not comply with the requirements of this 
section unless—
(1) the self-regulatory organization is registered 
with the Commission, by filing with the Commission 
an application for registration that—
(A) is in such form as the Commission, by 
rule, may prescribe; and 
(B) contains the rules of the self-regu-
latory organization and such other information 
and documents as the Commission, by rule, 
may prescribe as necessary or appropriate; 
(2) the Commission determines that—
(A) such self-regulatory organization is so 
organized and has the capacity to be able to 
carry out the purposes of this Act and to com-
ply, and to enforce compliance by its members, 
with the provisions of this Act, the rules there-
under, and the rules of the self-regulatory orga-
nization; 
(B) the rules of the self-regulatory organi-
zation are designed to prevent fraudulent and
deceptive acts and practices, and, in general, to 
protect consumers and the public interest; 
(C) the rules of the self-regulatory organi-
zation provide that its members shall be appro-
priately disciplined for violation of the provi-
sions of this Act, the rules thereunder, or the 
rules of the self-regulatory organization, by ex-
pulsion, revocation of the authority to display 
or advertise any seal or insignia, or any other 
fitting sanction; and 
(D) the rules of the self-regulatory organi-
zation provide a fair procedure for the dis-
ciplining of members; and 
(3) the Commission has not revoked or sus-
pended the Commission’s determination under para-
graph (2) with respect to such self-regulatory orga-
nization. 
SEC. 5. ACTIONS BY STATES. 
(a) IN GENERAL.—Whenever an attorney general of 
any State has reason to believe that the interests of the 
residents of that State have been or are being threatened
or adversely affected because any person has engaged or 
is engaging in a pattern or practice which violates any rule 
of the Commission under section 3(a), the State may bring 
a civil action on behalf of its residents in an appropriate
district court of the United States to enjoin such pattern 
or practice, to enforce compliance with such rule of the 
Commission, to obtain damages on behalf of their resi-
dents, or to obtain such further and other relief as the 
court may deem appropriate. 
(b) NOTICE.—The State shall serve prior written no-
tice of any civil action under subsection (a) upon the Com-
mission and provide the Commission with a copy of its 
complaint, except that if it is not feasible for the State 
to provide such prior notice, the State shall serve such 
notice immediately upon instituting such action. Upon re-
ceiving a notice respecting a civil action, the Commission 
shall have the right (1) to intervene in such action, (2) 
upon so intervening, to be heard on all matters arising 
therein, and (3) to file petitions for appeal. 
(c) VENUE.—Any civil action brought under this sec-
tion in a district court of the United States may be 
brought in the district wherein the defendant is found or 
is an inhabitant or transacts business or wherein the viola-
tion occurred or is occurring, and process in such cases 
may be served in any district in which the defendant is 
an inhabitant or wherever the defendant may be found. 
(d) INVESTIGATORY
POWERS.—For purposes of 
bringing any civil action under this section, nothing in this 
Act shall prevent the attorney general from exercising the
powers conferred on the attorney general by the laws of 
such State to conduct investigations or to administer oaths 
or affirmations or to compel the attendance of witnesses 
or the production of documentary and other evidence. 
(e) EFFECT
ON STATE COURT PROCEEDINGS.—
Nothing contained in this section shall prohibit an author-
ized State official from proceeding in State court on the 
basis of an alleged violation of any general civil or criminal 
antifraud statute of such State. 
(f) LIMITATION.—Whenever the Commission has in-
stituted a civil action for violation of any rule or regulation 
under this Act, no State may, during the pendency of such 
action instituted by the Commission, subsequently insti-
tute a civil action against any defendant named in the 
Commission’s complaint for violation of any rule as alleged 
in the Commission’s complaint. 
(g) ACTIONS BY OTHER STATE OFFICIALS.—
(1) Nothing contained in this section shall pro-
hibit an authorized State official from proceeding in 
State court on the basis of an alleged violation of 
any general civil or criminal statute of such State. 
(2) In addition to actions brought by an attor-
ney general of a State under subsection (a), such an 
action may be brought by officers of such State who 
are authorized by the State to bring actions in such
State for protection of consumers and who are des-
ignated by the Commission to bring an action under 
subsection (a) against persons that the Commission 
has determined have or are engaged in a pattern or 
practice which violates a rule of the Commission 
under section 3(a). 
SEC. 6. ADMINISTRATION AND APPLICABILITY. 
(a) IN GENERAL.—Except as otherwise provided in 
section 5, this Act shall be enforced by the Commission 
under the Federal Trade Commission Act (15 U.S.C. 41 
et seq.). Consequently, no activity which is outside the ju-
risdiction of that Act shall be affected by this Act, except 
for purposes of this Act. 
(b) RULEMAKING.—The Commission shall prescribe 
the rules under section 3(a) within 270 days after the date 
of enactment of this Act. A rule issued under this sub-
section shall be treated as a rule issued under section 
18(a)(1)(B) of the Federal Trade Commission Act (15 
U.S.C. 57a(a)(1)(B)). 
(c) ENFORCEMENT.—Any violation of any rule pre-
scribed under subsection (a) shall be treated as a violation 
of a rule respecting unfair or deceptive acts or practices 
under section 5 of the Federal Trade Commission Act (15 
U.S.C. 45). Notwithstanding section 5(a)(2) of such Act 
(15 U.S.C. 45(a)(2)), communications common carriers
shall be subject to the jurisdiction of the Commission for 
purposes of this Act. 
(d) ACTIONS BY THE COMMISSION.—The Commis-
sion shall prevent any person from violating a rule of the 
Commission under section 3 in the same manner, by the 
same means, and with the same jurisdiction, powers, and 
duties as though all applicable terms and provisions of the 
Federal Trade Commission Act (15 U.S.C. 41 et seq.) 
were incorporated into and made a part of this Act. Any 
person who violates such rule shall be subject to the pen-
alties and entitled to the privileges and immunities pro-
vided in the Federal Trade Commission Act in the same 
manner, by the same means, and with the same jurisdic-
tion, power, and duties as though all applicable terms and 
provisions of the Federal Trade Commission Act were in-
corporated into and made a part of this Act. 
SEC. 7. DEFINITIONS. 
As used in this Act: 
(1) COMMISSION.—The term ‘‘Commission’’ 
means the Federal Trade Commission. 
(2) NETWORK
GAME
OPERATOR.—The term 
‘‘network game operator’’ means a public or private 
business enterprise that engages in the business of 
providing game playing services (as opposed to the 
sale or download of a game as a publisher or dis-
tributor), either for a fee or for free, using a com-
munication path between the player and the game 
operator that is part of a communications network. 
(3) COMMUNICATIONS
NETWORK.—The term 
‘‘communications network’’ means a public or pri-
vate communication system that is used for the ex-
change of information or participation in trans-
actions (or both) and includes systems such as the 
telephone system, cable systems, satellite systems, 
wireless systems, or the Internet. 
(4) GAME OF SKILL.—The term ‘‘game of skill’’ 
means a game in which there are few or no inde-
pendent chance elements (such as die rolls, spinning 
wheels, drawn cards, or other random event genera-
tors) that substantially affect a game’s outcome be-
yond the control of one or more of the players.
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