IB
Union Calendar No. 389
106TH CONGRESS
2D SESSION
H. R. 3125
[Report No. 106–655, Part I]
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
JUNE 7, 2000
Reported with an amendment and referred to the Committee on Commerce
for a period ending not later than June 23, 2000, for consideration of
such provisions of the bill and amendment as fall within the jurisdiction
of that committee pursuant to clause 1(f), rule X
[Strike out all after the enacting clause and insert the part printed in italic]
JUNE 23, 2000
Additional sponsors: Mr. LUCAS of Kentucky, Mr. SMITH of Texas, Mr. DUN-
CAN, Mrs. NORTHUP, Mr. PETERSON of Minnesota, Mr. TRAFICANT, Mr.
WAMP, Mr. COBURN, Mr. LAFALCE, Mr. FLETCHER, Mr. GOODLING, Mr.
HASTINGS of Florida, Mr. WHITFIELD, Mr. WEXLER, Mr. MARTINEZ,
Mr. GEORGE MILLER of California, Mr. SHAW, Mr. LEWIS of Kentucky,
Mr. ROGERS, Mr. MALONEY of Connecticut, Mrs. THURMAN, Mr. RILEY,
Mrs. FOWLER, Mr. GILCHREST, Mr. SHADEGG, Mr. STUMP, Mr.
ENGLISH, Mr. SALMON, and Mr. COOK
JUNE 23, 2000
Committee on Commerce discharged; committed to the Committee of the
Whole House on the State of the Union and ordered to be printed
[For text of introduced bill, see copy of bill as introduced on October 21, 1999]
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 Pro-
hibition Act of 2000’’.
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 following:
‘‘§ 1085. Internet gambling
‘‘(a) DEFINITIONS.—In this section the following defi-
nitions apply:
‘‘(1) BETS
OR
WAGERS.—The term ‘bets or
wagers’—
‘‘(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
predominantly subject to chance, upon an agree-
ment or understanding that the person or an-
other person 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
subject 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 de-
fined 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 pursu-
ant to section 5 of the Commodity Exchange
Act (7 U.S.C. 7);
‘‘(iii) a contract of indemnity or guar-
antee;
‘‘(iv) a contract for life, health, or acci-
dent insurance; or
‘‘(v) participation in a simulation
sports game or an educational game or con-
test that—
‘‘(I) is not dependent solely on the
outcome of any single sporting event or
nonparticipant’s singular individual
performance in any single sporting
event;
‘‘(II) has an outcome that reflects
the relative knowledge and skill of the
participants with such outcome deter-
mined predominantly by accumulated
statistical results of sporting events
and nonparticipants accumulated in-
dividual performances therein; 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 partici-
pants 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 in-
formation to be authorized to place, receive,
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 applica-
ble Federal and State legal and regulatory re-
quirements 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 ‘foreign
jurisdiction’ means a jurisdiction of a foreign country
or political subdivision thereof.
‘‘(4) GAMBLING BUSINESS.—The term ‘gambling
business’ means—
‘‘(A) a business that is conducted at a gam-
bling establishment, or that—
‘‘(i) involves—
‘‘(I) the placing, receiving, or oth-
erwise 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 during
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 assist-
ing in the placing of a bet or wager’—
‘‘(A) means information that is intended by
the sender or recipient to be used by a person en-
gaged in the business of betting or wagering 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 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 a support service located in an-
other State or foreign jurisdiction, if the in-
formation is used only for processing bets or
wagers made with that facility under appli-
cable law;
‘‘(iii) information exchanged exclu-
sively between or among 1 or more wager-
ing facilities that are licensed and regulated
by the State in which each facility is lo-
cated, and any support service, wherever lo-
cated, 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 wa-
gering.
‘‘(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 instrumentality
of, interstate or foreign commerce to provide or enable
access by multiple users to a computer server, which
includes the transmission, storage, retrieval, hosting,
linking, formatting, or translation of a communica-
tion made by another person, and including specifi-
cally a service, system, or access software provider
that—
‘‘(A) provides access to the Internet; or
‘‘(B) is engaged in the business of providing
an information location tool (which means a
service that refers or links users to an online lo-
cation, including a directory, index, reference,
pointer, or hypertext link).
‘‘(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 offers
or provides such service.
‘‘(8) INTERNET.—The term ‘Internet’ means the
international computer network of both Federal and
non-Federal interoperable packet switched data net-
works.
‘‘(9) PERSON.—The term ‘person’ means any in-
dividual, association, partnership, joint venture, cor-
poration (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 en-
tity (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 network,
and employees or contractors who are granted
access to the system or network of their employer.
‘‘(13) SOLICITING AGENT.—The term ‘soliciting
agent’ means any agent who knowingly solicits for a
gambling business described in paragraph (4)(A) of
this subsection.
‘‘(b) INTERNET GAMBLING.—
‘‘(1) PROHIBITION.—Subject to subsection (f), it
shall be unlawful for a person engaged in a gambling
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—