IIB 
108TH CONGRESS 
1ST SESSION H. R. 2143
IN THE SENATE OF THE UNITED STATES 
JUNE 11, 2003
Received; read twice and referred to the Committee on Banking, Housing, and 
Urban Affairs 
AN ACT 
To prevent the use of certain bank instruments 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,
HR 2143 RFS 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Unlawful 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. POLICIES AND PROCEDURES REQUIRED TO PRE-
VENT PAYMENTS FOR UNLAWFUL INTERNET 
GAMBLING. 
(a) REGULATIONS.—Before the end of the 6-month 
period beginning on the date of the enactment of this Act, 
the Federal functional regulators shall prescribe regula-
tions requiring any designated payment system to estab-
HR 2143 RFS 
lish policies and procedures reasonably designed to iden-
tify and prevent restricted transactions in any of the fol-
lowing ways: 
(1) The establishment of policies and proce-
dures that—
(A) allow the payment system and any per-
son involved in the payment system to identify 
restricted transactions by means of codes in au-
thorization messages or by other means; and 
(B) block restricted transactions identified 
as a result of the policies and procedures devel-
oped 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 pursuant to sub-
section (a), the Federal functional regulators shall—
(1) identify types of policies and procedures, in-
cluding nonexclusive examples, which would be 
deemed to be ‘‘reasonably designed to identify’’ and 
‘‘reasonably designed to block’’ or to ‘‘prevent the 
acceptance of the products or services’’ with respect 
to each type of transaction, such as, should credit
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card transactions be so designated, identifying trans-
actions by a code or codes in the authorization mes-
sage and denying authorization of a credit card 
transaction in response to an authorization message; 
(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 under subsection (a) if the 
Federal functional regulators find that it is not rea-
sonably practical to identify and block, or otherwise 
prevent, such transactions. 
(c) COMPLIANCE WITH PAYMENT SYSTEM POLICIES 
AND PROCEDURES.—A creditor, credit card issuer, finan-
cial institution, operator of a terminal at which an elec-
tronic fund transfer may be initiated, money transmitting 
business, or international, national, regional, or local net-
work utilized to effect a credit transaction, electronic fund 
transfer, or money transmitting service, or a participant 
in such network, meets the requirement of subsection (a) 
if—
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(1) such person relies on and complies with the 
policies and procedures of a designated payment sys-
tem 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). 
(d) ENFORCEMENT.—
(1) IN
GENERAL.—This section shall be en-
forced by the Federal functional regulators and the 
Federal Trade Commission under applicable law in 
the manner provided in section 505(a) of the 
Gramm-Leach-Bliley Act. 
(2) FACTORS TO BE CONSIDERED.—In consid-
ering any enforcement action under this subsection 
against any payment system, or any participant in 
a payment system that is a creditor, credit card 
issuer, financial institution, operator of a terminal at 
which an electronic fund transfer may be initiated,
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money transmitting business, or international, na-
tional, regional, or local network utilized to effect a 
credit transaction, electronic fund transfer, or money 
transmitting service, or a participant in such net-
work, the Federal functional regulators and the Fed-
eral Trade Commission shall consider the following 
factors: 
(A) The extent to which such person is ex-
tending credit or transmitting funds knowing 
the transaction is in connection with unlawful 
Internet gambling. 
(B) The history of such person in extend-
ing credit or transmitting funds knowing the 
transaction is in connection with unlawful 
Internet gambling. 
(C) The extent to which such person has 
established and is maintaining policies and pro-
cedures in compliance with regulations pre-
scribed under this subsection. 
(D) The feasibility that any specific rem-
edy prescribed can be implemented by such per-
son without substantial deviation from normal 
business practice. 
(E) The costs and burdens the specific 
remedy will have on such person.
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SEC. 4. DEFINITIONS. 
For purposes of this Act, the following definitions 
shall apply: 
(1) RESTRICTED TRANSACTION.—The term ‘‘re-
stricted transaction’’ means any transaction or 
transmittal to any person engaged in the business of 
betting or wagering, in connection with the partici-
pation of another person in unlawful Internet gam-
bling, of—
(A) credit, or the proceeds of credit, ex-
tended to or on behalf of such other person (in-
cluding credit extended through the use of a 
credit card); 
(B) an electronic fund transfer or funds 
transmitted by or through a money transmit-
ting business, or the proceeds of an electronic 
fund transfer or money transmitting service, 
from or on behalf of the other person; 
(C) any check, draft, or similar instrument 
which is drawn by or on behalf of the other per-
son and is drawn on or payable at or through 
any financial institution; or 
(D) the proceeds of any other form of fi-
nancial transaction as the Federal functional 
regulators may prescribe by regulation which 
involves a financial institution as a payor or fi-
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nancial intermediary on behalf of or for the 
benefit of the other person. 
(2) BETS OR WAGERS.—The term ‘‘bets or wa-
gers’’—
(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 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, United 
States Code; 
(D) includes any instructions or informa-
tion pertaining to the establishment or move-
ment of funds in an account by the bettor or 
customer with the business of betting or wager-
ing; and 
(E) does not include—
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(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 such Act); 
(ii) any transaction conducted on or 
subject to the rules of a registered entity 
or exempt board of trade pursuant to the 
Commodity 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 gaming 
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 guar-
antee; 
(vi) any contract for insurance;