I
106TH CONGRESS
1ST SESSION
H. R. 3125
To prohibit Internet gambling, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 21, 1999
Mr. GOODLATTE (for himself, Mr. LOBIONDO, Mr. WOLF, Mr. BOUCHER, Mr.
GIBBONS, and Mr. GOODE) introduced the following bill; which was re-
ferred to the Committee on the Judiciary
A BILL
To prohibit 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
Prohibition Act of 1999’’.
SEC. 2. PROHIBITION ON INTERNET GAMBLING.
(a) IN GENERAL.—Chapter 50 of title 18, United
States Code, is amended by adding at the end the fol-
lowing:
‘‘§ 1085. Internet gambling
‘‘(a) DEFINITIONS.—In this section the following
definitions apply:
‘‘(1) BETS
OR
WAGERS.—The term ‘bets or
wagers’—
‘‘(A) means the staking or risking by any
person of something of value other than in a de
minimis amount upon the outcome of a contest
of others, a sporting event, or a game predomi-
nantly subject to chance, upon an agreement or
understanding that the person or another per-
son 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) a 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 (15
U.S.C. 78c(a)(47))) for the purchase or
sale at a future date of securities (as that
term is defined in section 3(a)(10) of the
Securities Exchange Act of 1934 (15
U.S.C. 78c(a)(10)));
‘‘(ii) a transaction on or subject to the
rules of a contract market designated pur-
suant to section 5 of the Commodity Ex-
change Act (7 U.S.C. 7);
‘‘(iii) a contract of indemnity or guar-
antee;
‘‘(iv) a contract for life, health, or ac-
cident insurance; or
‘‘(v) 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 in-
dividual performance in any single
sporting event;
‘‘(II) has an outcome that re-
flects the relative knowledge and skill
of the participants; 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) CLOSED-LOOP
SUBSCRIBER-BASED
SERV-
ICE.—The term ‘closed-loop subscriber-based service’
means any information service or system that uses—
‘‘(A) a device or combination of devices—
‘‘(i) expressly authorized and operated
in accordance with the laws of a State, ex-
clusively for placing, receiving, or otherwise
making a bet or wager described in sub-
section (f)(1)(B); and
‘‘(ii) by which a person located within
any State must subscribe and be registered
with the provider of the wagering service
by name, address, and appropriate billing
information to be authorized to place, re-
ceive, or otherwise make a bet or wager,
and must be physically located within that
State in order to be authorized to do so;
‘‘(B) an effective customer verification and
age verification system, expressly authorized
and operated in accordance with the laws of the
State in which it is located, to ensure that all
applicable Federal and State legal and regu-
latory requirements for lawful gambling are
met; and
‘‘(C) appropriate data security standards
to prevent unauthorized access by any person
who has not subscribed or who is a minor.
‘‘(3) FOREIGN JURISDICTION.—The term ‘for-
eign jurisdiction’ means a jurisdiction of a foreign
country or political subdivision thereof.
‘‘(4) GAMBLING
BUSINESS.—The term ‘gam-
bling business’ means—
‘‘(A) a business that is conducted at a
gambling establishment, or that—
‘‘(i) involves—
‘‘(I) the placing, receiving, or
otherwise making of bets or wagers;
or
‘‘(II) the offering to engage in
the placing, receiving, or otherwise
making 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
‘‘(B) any soliciting agent of a business de-
scribed in subparagraph (A).
‘‘(5) INFORMATION ASSISTING IN THE PLACING
OF A BET OR WAGER.—The term ‘information as-
sisting in the placing of a bet or wager’—
‘‘(A) means information that is intended
by the sender or recipient to be used by a per-
son engaged in the business of betting or wa-
gering to place, receive, or otherwise make a bet
or wager; and
‘‘(B) does not include—
‘‘(i) 
information 
concerning 
pari-
mutuel pools that is exchanged exclusively
between or among 1 or more racetracks or
other parimutuel wagering facilities li-
censed by the State or approved by the for-
eign jurisdiction in which the facility is lo-
cated, and 1 or more parimutuel wagering
facilities licensed by the State or approved
by the foreign jurisdiction in which the fa-
cility is located, if that information is used
only to conduct common pool parimutuel
pooling under applicable law;
‘‘(ii) information exchanged exclu-
sively between or among 1 or more race-
tracks or other parimutuel wagering facili-
ties licensed by the State or approved by
the foreign jurisdiction in which the facility
is located, and a support service located in
another State or foreign jurisdiction, if the
information is used only for processing
bets or wagers made with that facility
under applicable law;
‘‘(iii) information exchanged exclu-
sively between or among 1 or more wager-
ing facilities that are licensed and regu-
lated by the State in which each facility is
located, and any support service, wherever
located, if the information is used only for
the pooling or processing of bets or wagers
made by or with the facility or facilities
under each State’s applicable law;
‘‘(iv) any news reporting or analysis
of wagering activity, including odds, racing
or event results, race and event schedules,
or categories of wagering; or
‘‘(v) any posting or reporting of any
educational information on how to make a
bet or wager or the nature of betting or
wagering.
‘‘(6) INTERACTIVE
COMPUTER
SERVICE.—The
term ‘interactive computer service’ means any infor-
mation service, system, or access software provider
that operates in, or uses a channel or instrumen-
tality of, interstate or foreign commerce to provide
or enable access by multiple users to a computer
server, including specifically a service or system that
provides access to the Internet.
‘‘(7) INTERACTIVE
COMPUTER
SERVICE
PRO-
VIDER.—The term ‘interactive computer service pro-
vider’ means any person that provides an interactive
computer service, to the extent that such person of-
fers or provides such service.
‘‘(8) INTERNET.—The term ‘Internet’ means
the international computer network of both Federal
and non-Federal interoperable packet switched data
networks.
‘‘(9) PERSON.—The term ‘person’ means any
individual, association, partnership, joint venture,
corporation (or any affiliate of a corporation), State
or political subdivision thereof, department, agency,
or instrumentality of a State or political subdivision
thereof, or any other government, organization, or
entity (including any governmental entity (as defined
in section 3701(2) of title 28)).
‘‘(10) PRIVATE NETWORK.—The term ‘private
network’ means a communications channel or chan-
nels, including voice or computer data transmission
facilities, that use either—
‘‘(A) private dedicated lines; or
‘‘(B) the public communications infrastruc-
ture, if the infrastructure is secured by means
of the appropriate private communications tech-
nology to prevent unauthorized access.
‘‘(11) STATE.—The term ‘State’ means a State
of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, or a commonwealth,
territory, or possession of the United States.
‘‘(12) SUBSCRIBER.—The term ‘subscriber’—
‘‘(A) means any person with a business re-
lationship with the interactive computer service
provider through which such person receives ac-
cess to the system, service, or network of that
provider, even if no formal subscription agree-
ment exists; and
‘‘(B) includes registrants, students who are
granted access to a university system or net-
work, and employees or contractors who are
granted access to the system or network of
their employer.
‘‘(b) INTERNET GAMBLING.—
‘‘(1) PROHIBITION.—Subject to subsection (f),
it shall be unlawful for a person engaged in a gam-
bling business knowingly to use the Internet or any
other interactive computer service—
‘‘(A) to place, receive, or otherwise make a
bet or wager; or
‘‘(B) to send, receive, or invite information
assisting in the placing of a bet or wager.
‘‘(2) PENALTIES.—A person engaged in a gam-
bling business who violates this section shall be—
‘‘(A) fined in an amount equal to not more
than the greater of—
‘‘(i) the total amount that such person
bet or wagered, or placed, received, or ac-
cepted in bets or wagers, as a result of en-
gaging in that business in violation of this
section; or
‘‘(ii) $20,000;
‘‘(B) imprisoned not more than 4 years; or
against any person to prevent or restrain a
violation of this section if the court deter-
mines, after notice and an opportunity for
a hearing, that there is a substantial prob-
ability 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
subparagraphs (A) and (B), for a violation that
is alleged to have occurred, or may occur, on
Indian lands (as that term is defined in section
4 of the Indian Gaming Regulatory Act (25
U.S.C. 2703))—
‘‘(i) the United States shall have the
enforcement authority provided under sub-
paragraph (A); and
‘‘(ii) the enforcement authorities spec-
ified in an applicable Tribal-State compact
negotiated under section 11 of the Indian
Gaming Regulatory Act (25 U.S.C. 2710)
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
proceeding 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
(except as provided in subsection (d)(3)), if the
United States or the State, as applicable, dem-
onstrates that there is probable cause to believe
that the use of the Internet or other interactive
computer service at issue violates this section.
‘‘(B) HEARINGS.—A hearing requested
concerning an order entered under this para-
graph shall be held at the earliest practicable
time.
‘‘(d) 
INTERACTIVE
COMPUTER
SERVICE
PRO-
VIDERS.—
‘‘(1) IMMUNITY FROM LIABILITY FOR USE BY
ANOTHER.—
‘‘(A) IN
GENERAL.—An interactive com-
puter service provider described in subpara-
graph (B) shall not be liable, under this section
or any other provision of Federal or State law
prohibiting or regulating gambling or gambling-
related activities, for the use of its facilities or
services by another person to engage in Internet
gambling activity that violates such law—
‘‘(i) arising out of any transmitting,
routing, or providing of connections for
gambling-related material or activity (in-
cluding intermediate and temporary stor-
age in the course of such transmitting,
routing, or providing connections) by the
provider, if—
‘‘(I) the material or activity was
initiated by or at the direction of a
person other than the provider;
‘‘(II) the transmitting, routing,
or providing of connections is carried
out through an automatic process
without selection of the material or
activity by the provider;
‘‘(III) the provider does not se-
lect the recipients of the material or
activity, except as an automatic re-
sponse to the request of another per-
son; and
‘‘(IV) the material or activity is
transmitted through the system or
network of the provider without modi-
fication of its content; or
‘‘(ii) arising out of any gambling-re-
lated material or activity at an online site
residing on a computer server owned, con-
trolled, or operated by or for the provider,
or arising out of referring or linking users
to an online location containing such mate-
rial or activity, if the material or activity
was initiated by or at the direction of a
person other than the provider, unless the
provider fails to take expeditiously, with
respect to the particular material or activ-
ity at issue, the actions described in para-
graph (2)(A) following the receipt by the
provider of a notice described in paragraph
(2)(B).