IB 
Union Calendar No. 267 
109TH CONGRESS 
2D SESSION 
H. R. 4411 
[Report No. 109–412, Parts I and II] 
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 
APRIL 6, 2006 
Reported with an amendment and referred to the Committee on the Judiciary 
for a period ending not later than May 26, 2006, for consideration of 
such provisions of the bill and amendment as fall within the jurisdiction 
of that committee pursuant to clause 1(l), rule X 
[Strike out all after the enacting clause and insert the part printed in italic] 
MAY 26, 2006 
Additional sponsors: Mr. SHADEGG, Mr. KENNEDY of Minnesota, Mr. FRANKS 
of Arizona, Mr. TERRY, Ms. HOOLEY, Mr. WICKER, Mr. MCCOTTER, Mr. 
WILSON of South Carolina, Mr. UPTON, Mr. INGLIS of South Carolina, 
Mr. PETRI, Mr. BLUNT, Mr. SHAYS, Ms. WASSERMAN SCHULTZ, Ms. 
BORDALLO, Mr. BARRETT of South Carolina, and Mr. SOUDER 
MAY 26, 2006 
Reported from the Committee on the Judiciary with an amendment; com-
mitted to the Committee of the Whole House on the State of the Union 
and ordered to be printed 
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[Strike out all after the enacting clause and insert the part printed in boldface roman] 
[For text of introduced bill, see copy of bill as introduced on November 18, 2005] 
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 Gam-
bling Enforcement Act of 2006’’. 
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 following 
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 instruments, 
credit cards, and wire transfers. 
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‘‘(2) The National Gambling Impact Study 
Commission in 1999 recommended the passage of leg-
islation to prohibit wire transfers to Internet gam-
bling 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 traditional 
law enforcement mechanisms are often inadequate for 
enforcing gambling prohibitions or regulations on the 
Internet, especially where such gambling 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 
‘‘For purposes of this subchapter, the following defini-
tions 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 
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subject to chance, upon an agreement or under-
standing that the person or another person will 
receive something of value in the event of a cer-
tain 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; 
‘‘(D) includes any instructions or informa-
tion pertaining to the establishment or movement 
of funds by the bettor or customer in, to, or from 
an account with the business of betting or wager-
ing; 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 securities 
(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 
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exempt board of trade under 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 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 fantasy 
or simulation 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 individual 
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performance in any single sporting 
event; 
‘‘(II) has an outcome that reflects 
the relative knowledge of the partici-
pants, or their skill at physical reac-
tion or physical manipulation (but not 
chance), and, in the case of a fantasy 
or simulation sports game, has an out-
come that is determined predominantly 
by accumulated statistical results of 
sporting events, including any non-
participant’s individual performances 
in such 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 partici-
pants 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 
the activities of a financial transaction provider, or 
any interactive computer service or telecommuni-
cations service. 
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‘‘(3) DESIGNATED PAYMENT SYSTEM.—The term 
‘designated payment system’ means any system uti-
lized by a financial transaction provider that the Sec-
retary and the Board of Governors of the Federal Re-
serve System, in consultation with the Attorney Gen-
eral, jointly determine, by regulation or order, could 
be utilized in connection with, or to facilitate, any re-
stricted transaction. 
‘‘(4) FINANCIAL
TRANSACTION
PROVIDER.—The 
term ‘financial transaction provider’ means a cred-
itor, credit card issuer, financial institution, operator 
of a terminal at which an electronic fund transfer 
may be initiated, money transmitting business, or 
international, national, regional, or local payment 
network utilized to effect a credit transaction, elec-
tronic fund transfer, stored value product transaction, 
or money transmitting service, or a participant in 
such network, or other participant in a designated 
payment system. 
‘‘(5) INTERNET.—The term ‘Internet’ means the 
international computer network of interoperable pack-
et switched data networks. 
‘‘(6) INTERACTIVE
COMPUTER
SERVICE.—The 
term ‘interactive computer service’ has the same 
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meaning as in section 230(f) of the Communications 
Act of 1934. 
‘‘(7) RESTRICTED TRANSACTION.—The term ‘re-
stricted transaction’ means any transaction or trans-
mittal involving any credit, funds, instrument, or 
proceeds described in any paragraph of section 5363 
which the recipient is prohibited from accepting 
under section 5363. 
‘‘(8) SECRETARY.—The term ‘Secretary’ means 
the Secretary of the Treasury. 
‘‘(9) STATE.—The term ‘State’ means any State 
of the United States, the District of Columbia, or any 
commonwealth, territory, or other possession of the 
United States. 
‘‘(10) 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 otherwise 
made. 
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‘‘(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 with-
in 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 cur-
rent 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— 
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‘‘(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-
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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 cur-
rent location has not been verified in 
accordance with the applicable tribal 
ordinance or resolution or Tribal-State 
Compact; and 
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‘‘(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 com-
plies with the Interstate Horseracing Act of 
1978. 
‘‘(E) INTERMEDIATE ROUTING.—The inter-
mediate routing of electronic data shall not de-
termine the location or locations in which a bet 
or wager is initiated, received, or otherwise 
made. 
‘‘(11) OTHER TERMS.— 
‘‘(A) CREDIT; CREDITOR; CREDIT CARD; AND 
CARD
ISSUER.—The terms ‘credit’, ‘creditor’, 
‘credit card’, and ‘card issuer’ have the same 
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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 transfers 
that would otherwise be excluded under sec-
tion 903(6)(E) of that Act; and 
‘‘(ii) includes any fund transfer cov-
ered by Article 4A of the Uniform Commer-
cial 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 ca-
sino, sports book, or other business at or through 
which bets or wagers may be placed or received. 
‘‘(D) INSURED DEPOSITORY INSTITUTION.— 
The term ‘insured depository institution’— 
‘‘(i) has the same meaning as in sec-
tion 3 of the Federal Deposit Insurance Act; 
and 
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‘‘(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 trans-
mitting service’ have the same meanings as in 
section 5330(d) (determined without regard to 
any regulations prescribed 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 wager-
ing may knowingly accept, in connection with the partici-
pation of another person in unlawful Internet gambling— 
‘‘(1) credit, or the proceeds of credit, extended to 
or on behalf of such other person (including credit ex-
tended 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; 
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‘‘(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 and the Board of Gov-
ernors of the Federal Reserve System may jointly pre-
scribe by regulation, which involves a financial insti-
tution 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 pe-
riod beginning on the date of the enactment of this sub-
chapter, the Secretary and the Board of Governors of the 
Federal Reserve System, in consultation with the Attorney 
General, shall prescribe regulations (which the Secretary 
and the Board jointly determine to be appropriate) requir-
ing each designated payment system, and all participants 
therein, to identify and block or otherwise prevent or pro-
hibit restricted transactions through the establishment of 
policies and procedures reasonably designed to identify and 
block or otherwise prevent or prohibit the acceptance of re-
stricted transactions in any of the following ways: 
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‘‘(1) The establishment of policies and procedures 
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 identified 
as a result of the policies and procedures devel-
oped pursuant to subparagraph (A). 
‘‘(2) The establishment of policies and procedures 
that prevent or prohibit 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 and the Board of Governors of the Federal 
Reserve System shall— 
‘‘(1) identify types of policies and procedures, 
including nonexclusive examples, which would be 
deemed, as applicable, to be reasonably designed to 
identify and block or otherwise prevent or prohibit the 
acceptance of the products or services with respect to 
each type of restricted transaction; 
‘‘(2) to the extent practical, permit any partici-
pant in a payment system to choose among alter-
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native means of identifying and blocking, or otherwise 
preventing or prohibiting the acceptance of the prod-
ucts or services of the payment system or participant 
in connection with, restricted transactions; and 
‘‘(3) consider exempting certain restricted trans-
actions or designated payment systems from any re-
quirement imposed under such regulations, if the Sec-
retary and the Board jointly find that it is not rea-
sonably practical to identify and block, or otherwise 
prevent or prohibit the acceptance of, such trans-
actions. 
‘‘(c) COMPLIANCE WITH PAYMENT SYSTEM POLICIES 
AND PROCEDURES.—A financial transaction provider shall 
be considered to be in compliance with the regulations pre-
scribed under subsection (a), if— 
‘‘(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 or prohibit the ac-
ceptance of the products or services of the pay-
ment system, member, or participant in connec-
tion with restricted transactions; and 
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‘‘(2) such policies and procedures of the des-
ignated payment system comply with the require-
ments of regulations prescribed under subsection (a). 
‘‘(d) NO LIABILITY FOR BLOCKING OR REFUSING TO 
HONOR RESTRICTED TRANSACTIONS.—A person that iden-
tifies and blocks a transaction, prevents or prohibits the ac-
ceptance of its products or services in connection with a 
transaction, or otherwise refuses to honor a transaction— 
‘‘(1) that is a restricted transaction; 
‘‘(2) that such person reasonably believes to be a 
restricted transaction; or 
‘‘(3) as a designated payment system or a mem-
ber of a designated payment system in reliance on the 
policies and procedures of the payment system, in an 
effort to comply with regulations prescribed under 
subsection (a), 
shall not be liable to any party for such action. 
‘‘(e) REGULATORY ENFORCEMENT.—The requirements 
of this section shall be enforced exclusively by— 
‘‘(1) the Federal functional regulators, with re-
spect to the designated payment systems and finan-
cial transaction providers subject to the respective ju-
risdiction of such regulators under section 505(a) of 
the Gramm-Leach-Bliley Act and section 5g of the 
Commodities Exchange Act; and 
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