by registered mail or in such other manner cal-
culated to give actual notice as the Director 
may prescribe by regulation. 
‘‘(3) CONTUMACY OR REFUSAL.— 
‘‘(A) REFERRAL
TO
ATTORNEY
GEN-
ERAL.—In case of contumacy by a person 
issued a summons under this subsection or a 
refusal by such person to obey such summons 
or to allow the Director to conduct an examina-
tion, the Director shall refer the matter to the 
Secretary of the Treasury for referral to the At-
torney General. 
‘‘(B) JURISDICTION OF COURT.—The At-
torney General may invoke the aid of any court 
of the United States within the jurisdiction of 
which— 
‘‘(i) the investigation which gave rise 
to the summons or the examination is 
being or has been carried on; 
‘‘(ii) the person summoned is an in-
habitant; or 
‘‘(iii) the person summoned carries on 
business or may be found, 
to compel compliance with the summons. 
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‘‘(C) COURT ORDER.—The court may issue 
an order requiring the person summoned to ap-
pear before the Director or a delegate of the 
Director to produce books, papers, records, and 
other data, to give testimony as may be nec-
essary to explain how such material was com-
piled and maintained, to allow the Director to 
examine the business of a licensee, and to pay 
the costs of the proceeding. 
‘‘(D) FAILURE TO COMPLY WITH ORDER.— 
Any failure to obey the order of the court may 
be punished by the court as a contempt thereof. 
‘‘(E) SERVICE OF PROCESS.—All process 
in any case under this subsection may be served 
in any judicial district in which such person 
may be found. 
‘‘§ 5384. Financial institutions 
‘‘(a) INVESTMENT BANKING.—No person shall be 
held liable for engaging in investment banking activities 
for or on behalf of a licensee or involving a licensee, if 
such activities are performed in compliance with this sub-
chapter, the Sarbanes-Oxley Act, the Securities Act of 
1933 Act, the Securities Exchange Act of 1934, and any 
other applicable laws governing securities. 
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‘‘(b) PAYMENT AND TRANSACTION PROCESSING.— 
No person shall be held liable for engaging in payments 
processing activities for or on behalf of a licensee or involv-
ing a licensee, if such activities are performed in compli-
ance with this subchapter. 
‘‘(c) FINANCIAL INSTITUTIONS.—No financial insti-
tution shall be held liable for engaging in financial activi-
ties and transactions for or on behalf of a licensee or in-
volving a licensee, if such activities are performed in com-
pliance with this subchapter and with applicable Federal, 
State, and foreign banking laws and regulations. 
‘‘§ 5385. Prohibition and limitation of licenses in 
States and Indian lands 
‘‘(a) STATE OPT OUT.— 
‘‘(1) IN GENERAL.—No Internet gambling li-
censee may engage, under any license issued under 
this subchapter, in the business of Internet betting 
or wagering in any State which prohibits such busi-
ness within such State if the Governor or other chief 
executive officer of such State informs the Director 
of such prohibition before the end of the 90-day pe-
riod beginning on the date of the enactment of the 
Internet Gambling Regulation and Enforcement Act 
of 2007, or in accordance with paragraph (3), until 
such time as any notice of any subsequent repeal of 
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such prohibition becomes effective under paragraph 
(3). 
‘‘(2) LIMITATIONS
IMPOSED
BY
STATES.—No 
Internet gambling licensee may engage, under any li-
cense issued under this subchapter, in the business 
of conducting any particular types of gambling ac-
tivities or other contests in any State which pro-
hibits or limits such particular types of gambling ac-
tivities or other contests if the Governor or other 
chief executive officer of such State informs the Di-
rector of such prohibition or limitation, in a manner 
which clearly identifies the nature and extent of such 
prohibition or limitation, before the end of the 90- 
day period beginning on the date of the enactment 
of the Internet Gambling Regulation and Enforce-
ment Act of 2007, or in accordance with paragraph 
(3), until such time as any notice of any amendment 
or repeal of such specific prohibition or limitation 
becomes effective under paragraph (3). 
‘‘(3) CHANGES TO STATE LIMITATIONS.—The 
establishment, repeal, or amendment by any State of 
any prohibition or limitation referred to in para-
graph (1) or (2) after the end of the 90-day period 
beginning on the date of the enactment of the Inter-
net Gambling Regulation and Enforcement Act of 
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2007 shall apply, for purposes of this subchapter, 
with respect to the business of Internet betting or 
wagering in such State by any licensee beginning on 
the first January 1 that occurs after the end of the 
30-day period beginning on the later of— 
‘‘(A) the date a notice of such establish-
ment, repeal, or amendment is provided by the 
Governor or other chief executive officer of such 
State in writing to the Director; or 
‘‘(B) the effective date of such establish-
ment, repeal, or amendment. 
‘‘(b) INDIAN TRIBE OPT OUT.— 
‘‘(1) IN GENERAL.—No Internet gambling li-
censee may engage, under any license issued under 
this subchapter, in the business of Internet betting 
or wagering within the tribal lands of any Indian 
tribe which prohibits such business within such trib-
al lands if the principal chief or other chief executive 
officer of such Indian tribe informs the Director of 
such prohibition before the end of the 90-day period 
beginning on the date of the enactment of the Inter-
net Gambling Regulation and Enforcement Act of 
2007, or in accordance with paragraph (3), until 
such time as any notice of any repeal or amendment 
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of such prohibition becomes effective under para-
graph (3). 
‘‘(2) 
LIMITATIONS
IMPOSED
BY
INDIAN 
TRIBES.—No Internet gambling licensee may en-
gage, under any license issued under this sub-
chapter, in the business of conducting any particular 
types of gambling activities or other contests in the 
tribal lands of any Indian tribe which prohibits or 
limits such particular types of gambling activities or 
other contests if the principal chief or other chief ex-
ecutive officer of such Indian tribe informs the Di-
rector of such prohibition or limitation, in a manner 
which clearly identifies the nature and extent of such 
prohibition or limitation, before the end of the 90- 
day period beginning on the date of the enactment 
of the Internet Gambling Regulation and Enforce-
ment Act of 2007, or in accordance with paragraph 
(3), until such time as any notice of any amendment 
or repeal of such specific prohibition or limitation 
becomes effective under paragraph (3). 
‘‘(3) CHANGES
TO
INDIAN
TRIBE
LIMITA-
TIONS.—The establishment, repeal, or amendment 
by any Indian tribe of any prohibition or limitation 
referred to in paragraph (1) or (2) after the end of 
the 90-day period beginning on the date of the en-
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actment of the Internet Gambling Regulation and 
Enforcement Act of 2007 shall apply, for purposes 
of this subchapter, with respect to the business of 
Internet betting or wagering in the tribal lands of 
such Indian tribe by any licensee beginning on the 
first January 1 that occurs after the end of the 30- 
day period beginning on the later of— 
‘‘(A) the date a notice of such establish-
ment, repeal, or amendment is provided by the 
principal chief or other chief executive officer of 
such Indian tribe in writing to the Director; or 
‘‘(B) the effective date of such establish-
ment, repeal, or amendment. 
‘‘(c) ENFORCING STATE AND INDIAN TRIBE LIMITA-
TIONS.— 
‘‘(1) IN GENERAL.—The Director shall take ef-
fective measures to ensure that any licensee under 
this subchapter, as a condition of the license, com-
plies with any limitation or prohibition imposed by 
any State or Indian tribe to which the licensee is 
subject under paragraph (1), (2) or (3) of subsection 
(a) or (b), as the case may be. 
‘‘(2) VIOLATIONS.—It shall be a violation of 
this subchapter for any licensee knowingly to accept 
bets or wagers, or engage in any Internet gambling 
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activity within any State or in the tribal lands of 
any Indian tribe for which a notice is in effect under 
paragraph (1), (2), or (3) of subsection (a) or (b), 
as the case may be. 
‘‘(d) INTERMEDIATE ROUTING.—The intermediate 
routing of electronic data shall not determine the location 
or locations in which a bet or wager is initiated, received 
or otherwise made. 
‘‘§ 5386. Sporting leagues may prohibit internet gam-
bling on league activities 
‘‘(a) SPORTING LEAGUE OPT-OUT.—No Internet 
gambling licensee may engage, under any license issued 
under this subchapter, in the business of Internet betting 
or wagering in connection with any sport event or contest 
of any sporting league which prohibits such business if the 
chief executive officer of such sporting league informs the 
Director of such prohibition before the end of the 90-day 
period beginning on the date of the enactment of the 
Internet Gambling Regulation and Enforcement Act of 
2007, or in accordance with subsection (c), until such time 
as any notice of any repeal of such prohibition becomes 
effective under paragraph (3). 
‘‘(b) ESTABLISHMENT OR REPEAL OF SPORTING.— 
The establishment or repeal by any sporting league of any 
prohibition referred to in subsection (a) after the end of 
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the 90-day period beginning on the date of the enactment 
of the Internet Gambling Regulation and Enforcement Act 
of 2007 shall apply, for purposes of this subchapter, with 
respect to the business of Internet betting or wagering in 
connection with any sport event or contest of such sport-
ing league by any licensee beginning on the first January 
1 that occurs after the end of the 30-day period beginning 
on the later of— 
‘‘(1) the date a notice of such establishment or 
repeal is provided by the chief executive officer of 
such sporting league in writing to the Director; or 
‘‘(2) the effective date of such establishment or 
repeal. 
‘‘(c) VIOLATION
OF SPORTING LEAGUE LIMITA-
TION.— 
‘‘(1) IN GENERAL.—The Director shall take ef-
fective measures to ensure that any licensee under 
this subchapter, as a condition of the license, com-
plies with any prohibition imposed by any sporting 
league to which the licensee is subject under sub-
section (a) or (b). 
‘‘(2) VIOLATIONS.—It shall be a violation of 
this subchapter for any licensee knowingly to engage 
in the business of Internet betting or wagering in 
connection with any sport event or contest of any 
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sporting league for which a notice is in effect under 
subsection (a) or (b). 
‘‘§ 5387. Safe harbors 
‘‘It shall be a defense against any prosecution or en-
forcement action under any Federal or State law against 
any person possessing a valid license under this sub-
chapter that the activity is authorized under and has been 
carried out lawfully under the terms of this subchapter. 
‘‘§ 5388. Criminal penalties 
‘‘(a) IN GENERAL.—Whoever knowingly violates any 
provision of this subchapter shall be fined under title 18, 
or imprisoned for not more than 5 years, or both. 
‘‘(b) PERMANENT INJUNCTION.—Upon conviction of 
a person under this section, the court may enter a perma-
nent injunction enjoining such person from placing, receiv-
ing, or otherwise making bets or wagers or sending, receiv-
ing, or inviting information assisting in the placing of bets 
or wagers. 
‘‘§ 5389. Rules of construction 
‘‘(a) NO EFFECT ON OTHER LAW.—No provision of 
this subchapter shall be construed as altering, limiting, or 
extending any Federal or State law or Tribal-State com-
pact prohibiting, permitting, or regulating gambling with-
in the United States. 
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‘‘(b) COORDINATION
WITH
CERTAIN
GAMBLING 
LAWS.—No provision of this chapter shall be construed 
as permitting any bet or wager that would otherwise vio-
late any provision of— 
‘‘(1) the Interstate Horse Racing Act; 
‘‘(2) the Professional and Amateur Sports Pro-
tection Act; 
‘‘(3) the Gambling Devices Transportation Act; 
or 
‘‘(4) the Indian Gaming Regulatory Act.’’. 
(b) TECHNICAL AND CONFORMING AMENDMENT.— 
Section 310(b)(2) of title 31, United States Code is 
amended— 
(1) by redesignating subparagraphs (J) and (K) 
as subparagraphs (K) and (L), respectively; and 
(2) by inserting after subparagraph (I) the fol-
lowing new subparagraph: 
‘‘(J) Administer the requirements of sub-
chapter V of chapter 53.’’ 
(c) CLERICAL AMENDMENT.—The table of sections 
for chapter 53 of title 31, United States Code, is amended 
by adding at the end the following: 
‘‘SUBCHAPTER V—REGULATION OF LAWFUL INTERNET GAMBLING 
‘‘5381. Congressional findings and purpose. 
‘‘5382. Definitions. 
‘‘5383. Establishment and administration of licensing program. 
‘‘5384. Financial institutions. 
‘‘5385. Prohibition and limitation of licenses in States and Indian lands. 
‘‘5386. Sporting leagues may prohibit Internet gambling on league activities. 
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‘‘5387. Safe harbors. 
‘‘5388. Criminal penalties. 
‘‘5389. Rules of construction.’’. 
SEC. 3. REPORT REQUIRED. 
(a) IN GENERAL.—Before the end of the 1-year pe-
riod beginning on the effective date of the regulations pre-
scribed under section 4(a), and annually thereafter, the 
Director shall submit a report to the Congress on the li-
censing and regulation of Internet gambling operators. 
(b) INFORMATION REQUIRED.—Each report sub-
mitted under subsection (a) shall include the following in-
formation: 
(1) A comprehensive statement regarding the 
limitations imposed by the States, Indian tribes, and 
sporting leagues. 
(2) Relevant statistical information on appli-
cants and licenses. 
(3) The amount of licensing and user fees col-
lected during the period covered by the report. 
(4) Information on regulatory or enforcement 
actions undertaken during the period. 
(5) Any other information that may be useful 
to the Congress in evaluating the effectiveness of the 
Act in meeting its purpose, including the provision 
of protections against underage gambling, compul-
sive gambling, money laundering, and fraud, and in 
combating tax avoidance relating to online gambling. 
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SEC. 4. EFFECTIVE DATE. 
(a) REGULATIONS.—The Director of the Financial 
Crimes Enforcement Network shall prescribe such regula-
tions as may appropriate to implement subchapter V of 
chapter 53 of title 31, United States Code (as added by 
section 2(a) of this Act) and shall publish such regulations 
in final form in the Federal Register before the end of 
the 180-day period beginning on the date of the enactment 
of this Act. 
(b) SCOPE OF APPLICATION.—The amendment made 
by section 2(a) shall apply after the end of the 90-day 
period beginning on the date of the publication of the reg-
ulations in final form in accordance with subsection (a). 
Æ 
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