To provide for a study by the National Academy of Sciences to identify the proper response of the United States to the growth of Internet gambling.

SECTION 1. SHORT TITLE.

    This Act shall be known as the ``Internet Gambling Study Act''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds as follows:
            (1) Gambling is regulated primarily by State and tribal 
        governments and Federal statutes governing the interstate 
        placement of wagers are outdated.
            (2) Over the past decade, the number of Americans gambling 
        on the Internet has risen dramatically to several million, 
        accounting for over half of a multibillion dollar worldwide 
        market.
            (3) Many observers and industry analysts believe that it is 
        impossible to stop the sale of most products or services over 
        the Internet.
            (4) Congress recently approved the Unlawful Internet 
        Gambling Enforcement Act, which imposes civil and criminal 
        penalties for the acceptance of any financial instrument by 
        those engaged in the business of unlawful Internet gambling.
            (5) Congress must focus on establishing safeguards against 
        gambling by minors, compulsive gambling, fraud, money 
        laundering, and other forms of abuse.
            (6) Although interpretations of a recent ruling of the 
        World Trade Organization's appellate body differ, legal experts 
        agree that it calls into question whether certain of Federal 
        and State gambling laws violate the commitments of the United 
        States under the General Agreement on Trade and Services.
            (7) While only the United States and Antigua and Barbuda 
        are parties to that dispute, the ruling could have 
        ramifications for all interested parties, from the European 
        Union to Australia.
    (b) Purpose.--The purpose of this Act is to provide for a detailed 
examination by the National Research Council of the National Academy of 
Sciences of the issues posed by the continued spread and growth of 
interstate commerce with respect to Internet gambling, as well as the 
impact of the Unlawful Internet Gambling Enforcement Act on Internet 
gambling in the United States.

SEC. 3. COMPREHENSIVE STUDY OF INTERNET GAMBLING.

    (a) Study Required.--
            (1) In general.--The National Research Council of the 
        National Academy of Sciences shall enter into a contract to 
        conduct a comprehensive study of Internet gambling, including 
        the existing legal framework that governs such activities and 
        transactions and the impact of the Unlawful Internet Gambling 
        Enforcement Act on Internet gambling in the United States.
            (2) Issues to be considered.--The study conducted under 
        paragraph (1) shall include--
                    (A) a review of existing Federal, State, tribal, 
                local, and international laws governing various forms 
                of wagering over the Internet, the effectiveness of 
                such laws, and the extent to which such provisions of 
                law conform or do not conform with each other;
                    (B) an assessment of the proliferation of Internet 
                gambling, including an analysis of its availability and 
                use within the United States;
                    (C) a determination of the impact of Internet 
                gambling on minors and compulsive gamblers and the 
                availability of regulatory and technological safeguards 
                to prevent or mitigate these impacts;
                    (D) a determination of the extent to which 
                terrorists and criminal enterprises are utilizing 
                Internet gambling for fraud and money laundering 
                purposes and the availability of regulatory and 
                technological safeguards to prevent or mitigate these 
                impacts;
                    (E) an assessment of the impact of the Unlawful 
                Internet Gambling Enforcement Act on the availability 
                and use within the United States of Internet gambling, 
                and on the adverse effects of Internet gambling 
                identified in subparagraphs (C) and (D);
                    (F) an assessment of recent technological 
                innovations and the practices of other nations and 
                international bodies that license and regulate Internet 
                gambling, and the practicality of using similar systems 
                to establish a legal framework in the United States;
                    (G) an analysis of the issues of federalism that 
                are presented by legislative and administrative 
                proposals designed to address the proliferation of 
                illegal Internet gambling, given the interstate and 
                international character of the Internet as a medium, 
                and the potential for State and tribal governments to 
                create a legal and regulatory framework for online 
                gambling within their jurisdictions or among those 
                jurisdictions where online gambling is legal;
                    (H) an assessment of the problems posed by 
                unregulated international Internet gambling to United 
                States interests and the potential means, if any, by 
                which the Federal Government may seek international 
                cooperation in addressing these concerns;
                    (I) an analysis of the potential impact of recent 
                World Trade Organization rulings regarding Internet 
                gambling and the long-term impact on existing and 
                future United States trade agreements under the General 
                Agreement on Trade and Services; and
                    (J) an analysis of the potential tax revenue that 
                could be generated by a legal, licensed, regulated 
                Internet gambling industry in the United States.
    (b) Final Report.--The contract entered into under subsection (a) 
shall require that the National Research Council submit to the 
President, the Congress, State Governors, and Native American tribal 
governments a comprehensive report on the Council's findings and 
conclusions not later than 12 months after the date upon which the 
contract is entered into.

Summary: Internet Gambling Study Act - Requires the National Research Council of the National Academy of Sciences to conduct a comprehensive study of Internet gambling, including the existing legal framework that governs such activities and transactions and the impact of the Unlawful Internet Gambling Enforcement Act on Internet gambling in the United States.