I 
109TH CONGRESS 
1ST SESSION H. R. 4411 
To prevent the use of certain payment instruments, credit cards, and fund 
transfers for unlawful Internet gambling, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 18, 2005 
Mr. LEACH (for himself, Mr. PENCE, Mr. BACHUS, Mr. OSBORNE, Mr. PITTS, 
Mr. BOEHLERT, Mr. GILLMOR, Mr. GILCHREST, Mr. ROGERS of Michi-
gan, Mr. BASS, Mr. FORTENBERRY, Mr. EHLERS, Mr. KIRK, Mr. 
RAMSTAD, Mr. DENT, Mr. WALSH, Mr. MCCAUL of Texas, Mr. LATHAM, 
and Mr. AKIN) introduced the following bill; which was referred to the 
Committee on Financial Services 
A BILL 
To prevent the use of certain payment instruments, credit 
cards, and fund transfers for unlawful 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 ‘‘Unlawful Internet 
Gambling Enforcement Act of 2005’’.
SEC. 2. PROHIBITION ON ACCEPTANCE OF ANY PAYMENT 
INSTRUMENT 
FOR 
UNLAWFUL 
INTERNET 
GAMBLING. 
(a) IN GENERAL.—Chapter 53 of title 31, United 
States Code, is amended by adding at the end the fol-
lowing new subchapter: 
‘‘SUBCHAPTER IV—PROHIBITION ON FUNDING 
OF UNLAWFUL INTERNET GAMBLING 
‘‘§ 5361. Congressional findings and purpose 
‘‘(a) FINDINGS.—The Congress finds the following: 
‘‘(1) Internet gambling is primarily funded 
through personal use of payment system instru-
ments, credit cards, and wire transfers. 
‘‘(2) The National Gambling Impact Study 
Commission in 1999 recommended the passage of 
legislation to prohibit wire transfers to Internet 
gambling sites or the banks which represent such 
sites. 
‘‘(3) Internet gambling is a growing cause of 
debt collection problems for insured depository insti-
tutions and the consumer credit industry. 
‘‘(4) New mechanisms for enforcing gambling 
laws on the Internet are necessary because tradi-
tional law enforcement mechanisms are often inad-
equate for enforcing gambling prohibitions or regula-
tions on the Internet, especially where such gam-
bling crosses State or national borders. 
‘‘(b) RULE OF CONSTRUCTION.—No provision of this 
subchapter shall be construed as altering, limiting, or ex-
tending any Federal or State law or Tribal-State compact 
prohibiting, permitting, or regulating gambling within the 
United States. 
‘‘§ 5362. Definitions 
‘‘In this subchapter, the following definitions shall 
apply: 
‘‘(1) BET
OR
WAGER.—The term ‘bet or 
wager’— 
‘‘(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 subject to chance, upon an agreement or 
understanding that the person or another per-
son will receive something of value 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;
‘‘(D) includes any instructions or informa-
tion pertaining to the establishment or move-
ment of funds by the bettor or customer in, to, 
or from an account with the business of betting 
or wagering; and 
‘‘(E) does not include— 
‘‘(i) any activity governed by the secu-
rities laws (as that term is defined in sec-
tion 3(a)(47) of the Securities Exchange 
Act of 1934 for the purchase or sale of se-
curities (as that term is defined in section 
3(a)(10) of that Act); 
‘‘(ii) any transaction conducted on or 
subject to the rules of a registered entity 
or exempt board of trade under the Com-
modity Exchange Act; 
‘‘(iii) any over-the-counter derivative 
instrument; 
‘‘(iv) any other transaction that— 
‘‘(I) is excluded or exempt from 
regulation under the Commodity Ex-
change Act; or 
‘‘(II) is exempt from State gam-
ing or bucket shop laws under section 
12(e) of the Commodity Exchange Act
or section 28(a) of the Securities Ex-
change Act of 1934; 
‘‘(v) any contract of indemnity or 
guarantee; 
‘‘(vi) any contract for insurance; 
‘‘(vii) any deposit or other transaction 
with an insured depository institution; or 
‘‘(viii) any participation in a simula-
tion sports game, an educational game, or 
a contest, that— 
‘‘(I) is not dependent solely on 
the outcome of any single sporting 
event or nonparticipant’s singular in-
dividual performance in any single 
sporting event; 
‘‘(II) has an outcome that re-
flects the relative knowledge of the 
participants, or their skill at physical 
reaction or physical manipulation (but 
not chance), and, in the case of a sim-
ulation sports game, has an outcome 
that is determined 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) BUSINESS OF BETTING OR WAGERING.— 
The term ‘business of betting or wagering’ does not 
include a financial transaction provider, or any 
interactive computer service or telecommunications 
service. 
‘‘(3) DESIGNATED
PAYMENT
SYSTEM.—The 
term ‘designated payment system’ means any system 
utilized by a financial transaction provider that the 
Secretary, in consultation with the Board of Gov-
ernors of the Federal Reserve System and the Attor-
ney General, determines, by regulation or order, 
could be utilized in connection with, or to facilitate, 
any restricted transaction. 
‘‘(4) FINANCIAL
TRANSACTION
PROVIDER.— 
The term ‘financial transaction provider’ means a 
creditor, credit card issuer, financial institution, op-
erator of a terminal at which an electronic fund 
transfer may be initiated, money transmitting busi-
ness, or international, national, regional, or local
network utilized to effect a credit transaction, elec-
tronic fund transfer, stored value product trans-
action, or money transmitting service, or a partici-
pant in such network, or other participant in a des-
ignated payment system. 
‘‘(5) INTERNET.—The term ‘Internet’ means 
the international computer network of interoperable 
packet switched data networks. 
‘‘(6) INTERACTIVE
COMPUTER
SERVICE.—The 
term ‘interactive computer service’ has the same 
meaning as in section 230(f) of the Communications 
Act of 1934. 
‘‘(7) RESTRICTED
TRANSACTION.—The term 
‘restricted transaction’ means any transaction or 
transmittal involving any credit, funds, instrument, 
or proceeds described in any paragraph of section 
5363 which the recipient is prohibited from accept-
ing under section 5363. 
‘‘(8) SECRETARY.—The term ‘Secretary’ means 
the Secretary of the Treasury. 
‘‘(9) UNLAWFUL INTERNET GAMBLING.— 
‘‘(A) IN
GENERAL.—The term ‘unlawful 
Internet gambling’ means to place, receive, or 
otherwise knowingly transmit a bet or wager by 
any means which involves the use, at least in
part, of the Internet where such bet or wager 
is unlawful under any applicable Federal or 
State law in the State or Tribal lands in which 
the bet or wager is initiated, received, or other-
wise made. 
‘‘(B) INTRASTATE
TRANSACTIONS.—The 
term ‘unlawful Internet gambling’ shall not in-
clude placing, receiving, or otherwise transmit-
ting a bet or wager where— 
‘‘(i) the bet or wager is initiated and 
received or otherwise made exclusively 
within a single State; 
‘‘(ii) the bet or wager and the method 
by which the bet or wager is initiated and 
received or otherwise made is expressly au-
thorized by and placed in accordance with 
the laws of such State, and the State law 
or regulations include— 
‘‘(I) age and location verification 
requirements reasonably designed to 
block access to minors and persons lo-
cated out of such State; and 
‘‘(II) appropriate data security 
standards to prevent unauthorized ac-
cess by any person whose age and
current location has not been verified 
in accordance with such State’s law or 
regulations; and 
‘‘(iii) the bet or wager does not violate 
any provision of the— 
‘‘(I) Interstate Horseracing Act; 
‘‘(II) Professional and Amateur 
Sports Protection Act; 
‘‘(III) Gambling Devices Trans-
portation Act; or 
‘‘(IV) Indian Gaming Regulatory 
Act. 
‘‘(C) INTRATRIBAL
TRANSACTIONS.—The 
term ‘unlawful Internet gambling’ shall not in-
clude placing, receiving, or otherwise transmit-
ting a bet or wager where— 
‘‘(i) the bet or wager is initiated and 
received or otherwise made exclusively— 
‘‘(I) within the Indian lands of a 
single Indian tribe (as those terms are 
defined by the Indian Gaming Regu-
latory Act); or 
‘‘(II) between the Indian lands of 
2 or more Indian tribes to the extent
that intertribal gaming is authorized 
by the Indian Gaming Regulatory Act; 
‘‘(ii) the bet or wager and the method 
by which the bet or wager is initiated and 
received or otherwise made is expressly au-
thorized by and complies with the require-
ments of— 
‘‘(I) the applicable tribal ordi-
nance or resolution approved by the 
Chairman of the National Indian 
Gaming Commission; and 
‘‘(II) with respect to class III 
gaming, the applicable Tribal-State 
Compact; 
‘‘(iii) the applicable tribal ordinance 
or resolution or Tribal-State compact in-
cludes— 
‘‘(I) age and location verification 
requirements reasonably designed to 
block access to minors and persons lo-
cated out of the applicable Tribal 
lands; and 
‘‘(II) appropriate data security 
standards to prevent unauthorized ac-
cess by any person whose age and
current location has not been verified 
in accordance with the applicable trib-
al ordinance or resolution or Tribal- 
State Compact; and 
‘‘(iv) the bet or wager does not violate 
any provision of the— 
‘‘(I) Interstate Horseracing Act; 
‘‘(II) the Professional and Ama-
teur Sports Protection Act; 
‘‘(III) 
the 
Gambling 
Devices 
Transportation Act; or 
‘‘(IV) the Indian Gaming Regu-
latory Act. 
‘‘(D) 
INTERSTATE
HORSERACING.—The 
term ‘unlawful Internet gambling’ shall not in-
clude placing, receiving, or otherwise transmit-
ting a bet or wager that is governed by and 
complies with the Interstate Horseracing Act of 
1978. 
‘‘(E) INTERMEDIATE
ROUTING.—The in-
termediate routing of electronic data shall not 
determine the location or locations in which a 
bet or wager is initiated, received, or otherwise 
made. 
‘‘(10) OTHER TERMS.—
‘‘(A) CREDIT; CREDITOR; CREDIT
CARD; 
AND CARD ISSUER.—The terms ‘credit’, ‘cred-
itor’, ‘credit card’, and ‘card issuer’ have the 
same meanings as in section 103 of the Truth 
in Lending Act. 
‘‘(B) ELECTRONIC FUND TRANSFER.—The 
term ‘electronic fund transfer’— 
‘‘(i) has the same meaning as in sec-
tion 903 of the Electronic Fund Transfer 
Act, except that such term includes trans-
fers that would otherwise be excluded 
under section 903(6)(E) of that Act; and 
‘‘(ii) includes any fund transfer cov-
ered by Article 4A of the Uniform Com-
mercial Code, as in effect in any State. 
‘‘(C) FINANCIAL INSTITUTION.—The term 
‘financial institution’ has the same meaning as 
in section 903 of the Electronic Fund Transfer 
Act, except that such term does not include a 
casino, sports book, or other business at or 
through which bets or wagers may be placed or 
received. 
‘‘(D) 
INSURED
DEPOSITORY
INSTITU-
TION.—The term ‘insured depository institu-
tion’—
‘‘(i) has the same meaning as in sec-
tion 3 of the Federal Deposit Insurance 
Act; and 
‘‘(ii) includes an insured credit union 
(as defined in section 101 of the Federal 
Credit Union Act). 
‘‘(E) MONEY
TRANSMITTING
BUSINESS 
AND
MONEY
TRANSMITTING
SERVICE.—The 
terms 
‘money 
transmitting 
business’ 
and 
‘money transmitting service’ have the same 
meanings as in section 5330(d) (determined 
without regard to any regulations issued by the 
Secretary thereunder). 
‘‘§ 5363. Prohibition on acceptance of any financial 
instrument for unlawful Internet gam-
bling 
‘‘No person engaged in the business of betting or wa-
gering may knowingly accept, in connection with the par-
ticipation of another person in unlawful Internet gam-
bling— 
‘‘(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 
such other person; 
‘‘(3) any check, draft, or similar instrument 
which is drawn by or on behalf of such 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 such other person. 
‘‘§ 5364. Policies and procedures to identify and pre-
vent restricted transactions 
‘‘(a) REGULATIONS.—Before the end of the 270-day 
period beginning on the date of the enactment of this sub-
chapter, the Secretary, in consultation with the Board of 
Governors of the Federal Reserve System and the Attor-
ney General, shall prescribe regulations requiring each 
designated payment system, and all participants therein, 
to identify and prevent restricted transactions through the 
establishment of policies and procedures reasonably de-
signed to identify and prevent restricted transactions in 
any of the following ways:
‘‘(1) The establishment of policies and proce-
dures that— 
‘‘(A) allow the payment system and any 
person involved in the payment system to iden-
tify restricted transactions by means of codes in 
authorization messages or by other means; and 
‘‘(B) block restricted transactions identi-
fied as a result of the policies and procedures 
developed pursuant to subparagraph (A). 
‘‘(2) The establishment of policies and proce-
dures that prevent the acceptance of the products or 
services of the payment system in connection with a 
restricted transaction. 
‘‘(b) REQUIREMENTS
FOR POLICIES
AND PROCE-
DURES.—In prescribing regulations under subsection (a), 
the Secretary shall— 
‘‘(1) identify types of policies and procedures, 
including nonexclusive examples, which would be 
deemed, as applicable, to be reasonably designed to 
identify, block, or prevent the acceptance of the 
products or services with respect to each type of re-
stricted transaction; 
‘‘(2) to the extent practical, permit any partici-
pant in a payment system to choose among alter-
native means of identifying and blocking, or other-
wise preventing the acceptance of the products or 
services of the payment system or participant in con-
nection with, restricted transactions; and 
‘‘(3) consider exempting restricted transactions 
from any requirement imposed under such regula-
tions, if the Secretary finds that it is not reasonably 
practical to identify and block, or otherwise prevent, 
such transactions. 
‘‘(c) COMPLIANCE WITH PAYMENT SYSTEM POLI-
CIES AND PROCEDURES.—A financial transaction provider 
shall be considered to be in compliance with the regula-
tions prescribed under subsection (a), if— 
‘‘(1) such person relies on and complies with 
the policies and procedures of a designated payment 
system of which it is a member or participant to— 
‘‘(A) identify and block restricted trans-
actions; or 
‘‘(B) otherwise prevent the acceptance of 
the products or services of the payment system, 
member, or participant in connection with re-
stricted transactions; and 
‘‘(2) such policies and procedures of the des-
ignated payment system comply with the require-
ments of regulations prescribed under subsection 
(a).