108TH CONGRESS
1ST SESSION
H. R. 2143
AN ACT
To prevent the use of certain bank instruments for
unlawful Internet gambling, and for other purposes.
108TH CONGRESS
1ST SESSION
H. R. 2143
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,
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-
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
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-
nancial intermediary on behalf of or for the
benefit of the other person.
(2) 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 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—
(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;
(vii) any deposit or other transaction
with a depository institution (as defined in
section 3(c) of the Federal Deposit Insur-
ance Act);
(viii) any 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 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
(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; and
(ix) any lawful transaction with a
business licensed or authorized by a State.
(3) 
DESIGNATED
PAYMENT
SYSTEM
DE-
FINED.—The term ‘‘designated payment system’’
means any system utilized by any creditor, credit
card issuer, financial institution, operator of a ter-
minal at which an electronic fund transfer may be
initiated, money transmitting business, or inter-
national, national, regional, or local network utilized
to effect a credit transaction, electronic fund trans-
fer, or money transmitting service, or any partici-
pant in such network, that the Federal functional
regulators determine, by regulation or order, could
be utilized in connection with, or to facilitate, any
restricted transaction.
(4) FEDERAL FUNCTIONAL REGULATOR.—The
term ‘‘Federal functional regulator’’ has the same
meaning as in section 509(2) of the Gramm-Leach-
Bliley Act.
(5) INTERNET.—The term ‘‘Internet’’ means
the international computer network of interoperable
packet switched data networks.
(6) UNLAWFUL
INTERNET
GAMBLING.—The
term ‘‘unlawful Internet gambling’’ means to place,
receive, or otherwise transmit a bet or wager by any