Internet Gambling Funding Prohibition Act

        [Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 627 Reported in Senate (RS)]

Calendar No. 346
108th CONGRESS
1st Session
S. 627

[Report No. 108-173]

To prevent the use of certain payment instruments, credit cards, and
fund transfers for unlawful Internet gambling, and for other purposes.

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

March 13, 2003

Mr. Kyl (for himself, Mr. Shelby, and Mrs. Feinstein) introduced the
following bill; which was referred to the Committee on Banking,
Housing, and Urban Affairs

October 27, 2003

Reported by Mr. Shelby, with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]

_______________________________________________________________________

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 Representatives of the
United States of America in Congress assembled,

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Unlawful Internet Gambling
Funding Prohibition Act''.</DELETED>

<DELETED>SEC. 2. FINDINGS.</DELETED>

<DELETED>    Congress finds that--</DELETED>
<DELETED>    (1) Internet gambling is primarily funded through
personal use of payment system instruments, credit cards, and
wire transfers;</DELETED>
<DELETED>    (2) the National Gambling Impact Study Commission
in 1999 recommended the passage of legislation to prohibit wire
transfers to Internet gambling sites or the banks which
represent them;</DELETED>
<DELETED>    (3) Internet gambling is a growing cause of debt
collection problems for insured depository institutions and the
consumer credit industry;</DELETED>
<DELETED>    (4) Internet gambling conducted through offshore
jurisdictions has been identified by United States law
enforcement officials as a significant money laundering
vulnerability;</DELETED>
<DELETED>    (5) gambling through the Internet, which has grown
rapidly in the half-decade preceding the enactment of this Act,
opens up the possibility of immediate, individual, 24-hour
access in every home to the full range of wagering
opportunities on sporting events or casino-like contests, such
as roulette, slot machines, poker, or black-jack; and</DELETED>
<DELETED>    (6) the extent to which gambling is permitted and
regulated in the United States has been primarily a matter for
determination by individual States and, if applicable, Indian
tribes, with Federal law serving to prevent interstate or other
attempts to evade or avoid such determinations.</DELETED>

<DELETED>SEC. 3. PROHIBITION ON ACCEPTANCE OF ANY PAYMENT SYSTEM
INSTRUMENT, CREDIT CARD, OR FUND TRANSFER FOR UNLAWFUL
INTERNET GAMBLING.</DELETED>

<DELETED>    Chapter 53 of title 31, United States Code, is amended by
adding at the end the following:</DELETED>

<DELETED>``SUBCHAPTER IV--FUNDING OF ILLEGAL INTERNET
GAMBLING</DELETED>

<DELETED>``Sec. 5361. Definitions</DELETED>
<DELETED>    ``For purposes of this subchapter, the following
definitions shall apply:</DELETED>
<DELETED>    ``(1) Bet or wager.--The term `bet or wager'--
</DELETED>
<DELETED>    ``(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 person will receive something of
value in the event of a certain outcome;</DELETED>
<DELETED>    ``(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);</DELETED>
<DELETED>    ``(C) includes any scheme of a type
described in section 3702 of title 28, United States
Code;</DELETED>
<DELETED>    ``(D) includes any instructions or
information pertaining to the establishment or movement
of funds in, to, or from an account by the bettor or
customer with regard to the business of betting or
wagering; and</DELETED>
<DELETED>    ``(E) does not include--</DELETED>
<DELETED>    ``(i) any activity governed by the
securities laws (as that term is defined in
section 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
such Act);</DELETED>
<DELETED>    ``(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;</DELETED>
<DELETED>    ``(iii) any over-the-counter
derivative instrument;</DELETED>
<DELETED>    ``(iv) any other transaction
that--</DELETED>
<DELETED>    ``(I) is excluded or
exempt from regulation under the
Commodity Exchange Act; or</DELETED>
<DELETED>    ``(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
Exchange Act of 1934;</DELETED>
<DELETED>    ``(v) any contract of indemnity or
guarantee;</DELETED>
<DELETED>    ``(vi) any contract for
insurance;</DELETED>
<DELETED>    ``(vii) any deposit or other
transaction with an insured
institution;</DELETED>
<DELETED>    ``(viii) any participation in a
simulation sports game, or an educational game
or contest, that--</DELETED>
<DELETED>    ``(I) is not dependent
solely on the outcome of any single
sporting event or nonparticipant's
singular individual performance in any
single sporting event;</DELETED>
<DELETED>    ``(II) has an outcome that
reflects the relative knowledge and
skill of the participants, with such
outcome determined predominantly by
accumulated statistical results of
sporting events; and</DELETED>
<DELETED>    ``(III) offers a prize or
award to a participant that is
established in advance of the game or
contest and is not determined by the
number of participants or the amount of
any fees paid by those participants;
or</DELETED>
<DELETED>    ``(ix) any lawful transaction with
a business licensed or authorized by a
State.</DELETED>
<DELETED>    ``(2) Business of betting or wagering.--The term
`business of betting or wagering' does not include, other than
for purposes of section 5366, any creditor, credit card issuer,
insured institution, or other financial institution, operator
of a terminal at which an electronic fund transfer may be
initiated, money transmitting business, or international,
national, regional, or local network utilized to effect a
credit transaction, electronic fund transfer, stored value
product transaction, or money transmitting service, or any
participant in such network, or any interactive computer
service or telecommunications service.</DELETED>
<DELETED>    ``(3) Designated payment system.--The term
`designated payment system' means any system utilized by any
creditor, 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 network utilized to effect a
credit transaction, electronic fund transfer, stored value
product transaction, or money transmitting service, or any
participant in such network, that the Secretary, in
consultation with the Board of Governors of the Federal Reserve
System and the Attorney General of the United States,
determines, by regulation or order, could be utilized in
connection with, or to facilitate, any restricted
transaction.</DELETED>
<DELETED>    ``(4) Internet.--The term `Internet' means the
international computer network of interoperable packet switched
data networks.</DELETED>
<DELETED>    ``(5) Interactive computer service.--The term
`interactive computer service' has the same meaning as in
section 230(f) of the Communications Act of 1934.</DELETED>
<DELETED>    ``(6) Office.--The term `Office' means the Office
of Electronic Funding Oversight, established under section
5362.</DELETED>
<DELETED>    ``(7) Restricted transaction.--The term
`restricted transaction' means any transaction or transmittal
involving any credit, funds, instrument, or proceeds described
in any paragraph of section 5363 which the recipient is
prohibited from accepting under section 5363.</DELETED>
<DELETED>    ``(8) Secretary.--The term `Secretary' means the
Secretary of the Treasury.</DELETED>
<DELETED>    ``(9) Unlawful internet gambling.--The term
`unlawful Internet gambling' means the placing, receipt, or
other transmission of 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 in which the bet or wager is initiated,
received, or otherwise made.</DELETED>
<DELETED>    ``(10) Other terms.--</DELETED>
<DELETED>    ``(A) Credit; creditor; credit card; and
card issuer.--The terms `credit', `creditor', `credit
card', and `card issuer' have the same meanings as in
section 103 of the Truth in Lending Act.</DELETED>
<DELETED>    ``(B) Electronic fund transfer.--The term
`electronic fund transfer'--</DELETED>
<DELETED>    ``(i) has the same meaning as in
section 903 of the Electronic Fund Transfer
Act, except that such term includes transfers
that would otherwise be excluded under section
903(6)(E) of that Act; and</DELETED>
<DELETED>    ``(ii) includes any fund transfer
covered by Article 4A of the Uniform Commercial
Code, as in effect in any State.</DELETED>
<DELETED>    ``(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 casino, sports book,
or other business at or through which bets or wagers
may be placed or received.</DELETED>
<DELETED>    ``(D) Insured institution.--The term
`insured institution' means--</DELETED>
<DELETED>    ``(i) an insured depository
institution, as defined in section 3 of the
Federal Deposit Insurance Act; and</DELETED>
<DELETED>    ``(ii) an insured credit union, as
defined in section 101 of the Federal Credit
Union Act.</DELETED>
<DELETED>    ``(E) Money transmitting business and
money transmitting service.--The terms `money
transmitting business' and `money transmitting service'
have the same meanings as in section 5330(d)
(determined without regard to any regulations issued by
the Secretary thereunder).</DELETED>
<DELETED>``Sec. 5362. Office of electronic funding oversight; policies
and procedures to identify and prevent restricted
transactions</DELETED>
<DELETED>    ``(a) Establishment of Treasury Office.--</DELETED>
<DELETED>    ``(1) In general.--There is established within the
Department of the Treasury, the Office of Electronic Funding
Oversight, the purposes of which are--</DELETED>
<DELETED>    ``(A) to coordinate Federal efforts to
prohibit restricted transactions; and</DELETED>
<DELETED>    ``(B) otherwise to carry out the duties of
the Office, as specified in this subchapter.</DELETED>
<DELETED>    ``(2) Director.--The Office shall be headed by a
Director, appointed by the Secretary. The Director of the
Office may serve as the designee of the Secretary, at the
request of the Secretary, for any purpose under this
subchapter.</DELETED>
<DELETED>    ``(b) Regulations.--Not later than 6 months after the date
of enactment of this subchapter, the Office, in consultation with the
Board of Governors of the Federal Reserve System and the Attorney
General of the United States, shall prescribe regulations requiring any
designated payment system, and all participants therein, to establish
policies and procedures reasonably designed to identify and prevent
restricted transactions through the establishment of policies and
procedures that--</DELETED>
<DELETED>    ``(1) allow the payment system and any person
involved in the payment system to identify restricted
transactions by means of codes in authorization messages or by
other means;</DELETED>
<DELETED>    ``(2) block restricted transactions identified as
a result of the policies and procedures developed pursuant to
paragraph (1); and</DELETED>
<DELETED>    ``(3) prevent the acceptance of the products or
services of the payment system in connection with a restricted
transaction.</DELETED>
<DELETED>    ``(c) Requirements for Policies and Procedures.--In
prescribing regulations pursuant to subsection (b), the Office shall--
</DELETED>
<DELETED>    ``(1) identify types of policies and procedures,
including 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 card transactions be so designated, identifying
transactions by a code or codes in the authorization message
and denying authorization of a credit card transaction in
response to an authorization message;</DELETED>
<DELETED>    ``(2) to the extent practical, permit any
participant in a payment system to choose among alternative
means of identifying and blocking, or otherwise preventing the
acceptance of the products or services of the payment system or
participant in connection with, restricted transactions;
and</DELETED>
<DELETED>    ``(3) consider exempting restricted transactions
from any requirement imposed under such regulations, if the
Office finds that it is not reasonably practical to identify
and block, or otherwise prevent, such transactions.</DELETED>
<DELETED>    ``(d) Compliance With Payment System Policies and
Procedures.--A creditor, 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 network utilized to effect a credit transaction,
electronic fund transfer, stored value product transaction, or money
transmitting service, or a participant in such network, shall be
considered to be in compliance with the regulations prescribed under
subsection (b), if--</DELETED>
<DELETED>    ``(1) such person relies on and complies with the
policies and procedures of a designated payment system of which
it is a member or participant--</DELETED>
<DELETED>    ``(A) to identify and block restricted
transactions; or</DELETED>
<DELETED>    ``(B) to otherwise prevent the acceptance
of the products or services of the payment system,
member, or participant in connection with restricted
transactions; and</DELETED>
<DELETED>    ``(2) such policies and procedures of the
designated payment system comply with the requirements of
regulations prescribed under subsection (b).</DELETED>
<DELETED>    ``(e) No Liability for Blocking or Refusing To Honor
Restricted Transactions.--A person that is subject to a regulation
prescribed or order issued under this subchapter and blocks, or
otherwise refuses to honor, a restricted transaction, or as a member of
a designated payment system relies on the policies and procedures of
the payment system, in an effort to comply with regulations prescribed
under this section, shall not be liable to any party for such
action.</DELETED>
<DELETED>    ``(f) Regulatory Enforcement.--Regulations issued by the
Office under this subchapter shall be enforced by the Federal
functional regulators and the Federal Trade Commission, in the manner
provided in section 505(a) of the Gramm-Leach-Bliley Act.</DELETED>
<DELETED>``Sec. 5363. Prohibition on acceptance of any bank instrument
for unlawful Internet gambling</DELETED>
<DELETED>    ``No person engaged in the business of betting or wagering
may knowingly accept, in connection with the participation of another
person in unlawful Internet gambling--</DELETED>
<DELETED>    ``(1) credit, or the proceeds of credit, extended
to or on behalf of such other person (including credit extended
through the use of a credit card);</DELETED>
<DELETED>    ``(2) an electronic fund transfer or funds
transmitted 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;</DELETED>
<DELETED>    ``(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 financial institution;
or</DELETED>
<DELETED>    ``(4) the proceeds of any other form of financial
transaction, as the Secretary may prescribe by regulation,
which involves a financial institution as a payor or financial
intermediary on behalf of or for the benefit of such other
person.</DELETED>
<DELETED>``Sec. 5364. Civil remedies</DELETED>
<DELETED>    ``(a) Jurisdiction.--The district courts of the United
States shall have original and exclusive jurisdiction to prevent and
restrain violations of this subchapter or the rules or regulations
issued under this subchapter by issuing appropriate orders in
accordance with this section, regardless of whether a prosecution has
been initiated under this subchapter.</DELETED>
<DELETED>    ``(b) Proceedings.--</DELETED>
<DELETED>    ``(1) Institution by federal government.--
</DELETED>
<DELETED>    ``(A) In general.--The United States,
acting through the Attorney General, or, in the case of
rules or regulations issued under this subchapter,
through an agency authorized to enforce such
regulations in accordance with this subchapter, may
institute proceedings under this section to prevent or
restrain a violation or a threatened violation of this
subchapter or such rules or regulations.</DELETED>
<DELETED>    ``(B) Relief.--Upon application of the
United States under this paragraph, the district court
may enter a preliminary injunction or an injunction
against any person to prevent or restrain a violation
or threatened violation of this subchapter or the rules
or regulations issued under this subchapter, in
accordance with rule 65 of the Federal Rules of Civil
Procedure.</DELETED>
<DELETED>    ``(2) Institution by state attorney general.--
</DELETED>
<DELETED>    ``(A) In general.--The attorney general of
a State (or other appropriate State official) in which
a violation of this subchapter allegedly has occurred
or will occur may institute proceedings under this
section to prevent or restrain the violation or
threatened violation.</DELETED>
<DELETED>    ``(B) Relief.--Upon application of the
attorney general (or other appropriate State official)
of an affected State under this paragraph, the district
court may enter a preliminary injunction or an
injunction against any person to prevent or restrain a
violation or threatened violation of this subchapter,
in accordance with rule 65 of the Federal Rules of
Civil Procedure.</DELETED>
<DELETED>    ``(3) Indian lands.--</DELETED>
<DELETED>    ``(A) In general.--Notwithstanding
paragraphs (1) and (2), for a violation of this
subchapter or the rules or regulations issued under
this subchapter that is alleged to have occurred, or
may occur, on Indian lands (as that term is defined in
section 4 of the Indian Gaming Regulatory Act)--
</DELETED>
<DELETED>    ``(i) the United States shall have
the enforcement authority provided under
paragraph (1); and</DELETED>
<DELETED>    ``(ii) the enforcement authorities
specified in an applicable Tribal-State compact
negotiated under section 11 of the Indian
Gaming Regulatory Act shall be carried out in
accordance with that compact.</DELETED>
<DELETED>    ``(B) Rule of construction.--No provision
of this subchapter shall be construed as altering,
superseding, or otherwise affecting the application of
the Indian Gaming Regulatory Act.</DELETED>
<DELETED>    ``(c) Expedited Proceedings.--In addition to any
proceeding under subsection (b), a district court may, in exigent
circumstances, enter a temporary restraining order against a person
alleged to be in violation of this subchapter or the rules or
regulations issued under this subchapter, upon application of the
United States under subsection (b)(1), or the attorney general (or
other appropriate State official) of an affected State under subsection
(b)(2), in accordance with rule 65(b) of the Federal Rules of Civil
Procedure.</DELETED>
<DELETED>    ``(d) Limitation Relating to Interactive Computer
Services.--</DELETED>
<DELETED>    ``(1) In general.--Relief granted under this
section against an interactive computer service shall--
</DELETED>
<DELETED>    ``(A) be limited to the removal of, or
disabling of access to, an online site violating this
subchapter, or a hypertext link to an online site
violating this subchapter, that resides on a computer
server that such service controls or operates, except
that the limitation in this subparagraph shall not
apply if the service is subject to liability under this
section pursuant to section 5366;</DELETED>
<DELETED>    ``(B) be available only after notice to
the interactive computer service and an opportunity for
the service to appear are provided;</DELETED>
<DELETED>    ``(C) not impose any obligation on an
interactive computer service to monitor its service or
to affirmatively seek facts indicating activity
violating this subchapter;</DELETED>
<DELETED>    ``(D) specify the interactive computer
service to which it applies; and</DELETED>
<DELETED>    ``(E) specifically identify the location
of the online site or hypertext link to be removed or
access to which is to be disabled.</DELETED>
<DELETED>    ``(2) Coordination with other law.--An interactive
computer service that does not violate this subchapter shall
not be liable under section 1084 of title 18, United States
Code, except that the limitation in this paragraph shall not
apply if an interactive computer service has actual knowledge
and control of bets and wagers and--</DELETED>
<DELETED>    ``(A) operates, manages, supervises, or
directs an Internet website at which unlawful bets or
wagers may be placed, received, or otherwise made or at
which unlawful bets or wagers are offered to be placed,
received, or otherwise made; or</DELETED>
<DELETED>    ``(B) owns or controls, or is owned or
controlled by, any person who operates, manages,
supervises, or directs an Internet website at which
unlawful bets or wagers may be placed, received, or
otherwise made, or at which unlawful bets or wagers are
offered to be placed, received, or otherwise
made.</DELETED>
<DELETED>    ``(3) Rule of construction.--The provisions of
paragraph (2) do not affect any potential liability of an
interactive computer service or other person under any
provision of title 18, United States Code, other than as
specifically provided in paragraph (2).</DELETED>
<DELETED>    ``(e) Factors To Be Considered in Certain Cases.--In
considering granting relief under this section 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, money transmitting
business, or international, national, regional, or local network
utilized to effect a credit transaction, electronic fund transfer,
stored value product transaction, or money transmitting service, or a
participant in such network, the court shall consider--</DELETED>
<DELETED>    ``(1) the extent to which the person extending
credit or transmitting funds knew or should have known that the
transaction was in connection with unlawful Internet
gambling;</DELETED>
<DELETED>    ``(2) the history of such person in extending
credit or transmitting funds when such person knew or should
have known that the transaction is in connection with unlawful
Internet gambling;</DELETED>
<DELETED>    ``(3) the extent to which such person has
established and is maintaining policies and procedures in
compliance with rules and regulations issued under this
subchapter;</DELETED>
<DELETED>    ``(4) the extent to which it is feasible for any
specific remedy prescribed as part of such relief to be
implemented by such person without substantial deviation from
normal business practice; and</DELETED>
<DELETED>    ``(5) the costs and burdens that the specific
remedy will have on such person.</DELETED>
<DELETED>    ``(f) Notice to Regulators and Financial Institutions.--
Before initiating any proceeding under subsection (b) with respect to a
violation or potential violation of this subchapter or the rules or
regulations issued under this subchapter by any creditor, 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 network utilized to
effect a credit transaction, electronic fund transfer, stored value
product transaction, or money transmitting service, or any participant
in such network, the Attorney General of the United States, an attorney
general of a State (or other appropriate State official), or an agency
authorized to initiate such proceeding under this subchapter, shall--
</DELETED>
<DELETED>    ``(1) notify such person, and the appropriate
regulatory agency (as determined in accordance with section
5362(f) for such person) of such violation or potential
violation and the remedy to be sought in such proceeding;
and</DELETED>
<DELETED>    ``(2) allow such person 30 days to implement a
reasonable remedy for the violation or potential violation,
consistent with the factors described in subsection (e), and in
conjunction with such action as the appropriate regulatory
agency may take.</DELETED>
<DELETED>``Sec. 5365. Criminal penalties</DELETED>
<DELETED>    ``(a) In General.--Whoever violates this subchapter or the
rules or regulations issued under this subchapter shall be fined under
title 18, United States Code, or imprisoned for not more than 5 years,
or both.</DELETED>
<DELETED>    ``(b) Permanent Injunction.--Upon conviction of a person
under this section, the court may enter a permanent injunction
enjoining such person from placing, receiving, or otherwise making bets
or wagers or sending, receiving, or inviting information assisting in
the placing of bets or wagers.</DELETED>
<DELETED>``Sec. 5366. Circumventions prohibited</DELETED>
<DELETED>    ``Notwithstanding section 5361(2), a creditor, 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 network utilized to
effect a credit transaction, electronic fund transfer, stored value
product transaction, or money transmitting service, or any participant
in such network, or any interactive computer service or
telecommunications service, may be liable under this subchapter if such
creditor, issuer, institution, operator, business, network, or
participant has actual knowledge and control of bets and wagers, and--
</DELETED>
<DELETED>    ``(1) operates, manages, supervises, or directs an
Internet website at which unlawful bets or wagers may be
placed, received, or otherwise made, or at which unlawful bets
or wagers are offered to be placed, received, or otherwise
made; or</DELETED>
<DELETED>    ``(2) owns or controls, or is owned or controlled
by, any person who operates, manages, supervises, or directs an
Internet website at which unlawful bets or wagers may be
placed, received, or otherwise made, or at which unlawful bets
or wagers are offered to be placed, received, or otherwise
made.''.</DELETED>

<DELETED>SEC. 4. INTERNET GAMBLING IN OR THROUGH FOREIGN
JURISDICTIONS.</DELETED>

<DELETED>    (a) In General.--In deliberations between the United
States Government and any other country on money laundering,
corruption, and crime issues, the United States Government should--
</DELETED>
<DELETED>    (1) encourage cooperation by foreign governments
and relevant international fora in identifying whether Internet
gambling operations are being used for money laundering,
corruption, or other crimes;</DELETED>
<DELETED>    (2) advance policies that promote the cooperation
of foreign governments, through information sharing or other
measures, in the enforcement of this Act and the amendments
made by this Act; and</DELETED>
<DELETED>    (3) encourage the Financial Action Task Force on
Money Laundering, in its annual report on money laundering
typologies, to study the extent to which Internet gambling
operations are being used for money laundering
purposes.</DELETED>
<DELETED>    (b) Report Required.--The Secretary of the Treasury shall
submit an annual report to Congress on any deliberations between the
United States and other countries on issues relating to Internet
gambling.</DELETED>

<DELETED>SEC. 5. AMENDMENTS TO CRIMINAL GAMBLING PROVISIONS.</DELETED>

<DELETED>    (a) Amendment to Definition.--Section 1081 of title 18,
United States Code, is amended--</DELETED>
<DELETED>    (1) by designating the five undesignated
paragraphs that begin with ``The term'' as paragraphs (1)
through (5), respectively; and</DELETED>
<DELETED>    (2) in paragraph (5), as so designated--</DELETED>
<DELETED>    (A) by striking ``wire communication'' and
inserting ``communication'';</DELETED>
<DELETED>    (B) by inserting ``satellite, microwave,''
after ``cable,''; and</DELETED>
<DELETED>    (C) by inserting ``(whether fixed or
mobile)'' after ``connection''.</DELETED>
<DELETED>    (b) Increase in Penalty for Unlawful Wire Transfers of
Wagering Information.--Section 1084(a) of title 18, United States Code,
is amended by striking ``two years'' and inserting ``5
years''.</DELETED>

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Internet Gambling Funding
Prohibition Act''.

SEC. 2. FINDINGS.

Congress finds that--
(1) Internet gambling is primarily funded through personal
use of payment system instruments, credit cards, and wire
transfers;
(2) the National Gambling Impact Study Commission in 1999
recommended the passage of legislation to prohibit wire
transfers to Internet gambling sites or the banks which
represent them;
(3) Internet gambling is a growing cause of debt collection
problems for insured depository institutions and the consumer
credit industry;
(4) Internet gambling conducted through offshore
jurisdictions has been identified by United States law
enforcement officials as a significant money laundering
vulnerability; and
(5) gambling through the Internet, which has grown rapidly
in the half-decade preceding the enactment of this Act, opens
up the possibility of immediate, individual, 24-hour access in
every home to the full range of wagering opportunities on
sporting events or casino-like contests, such as roulette, slot
machines, poker, or blackjack.

SEC. 3. PROHIBITION ON ACCEPTANCE OF ANY PAYMENT SYSTEM INSTRUMENT,
CREDIT CARD, OR FUND TRANSFER FOR INTERNET GAMBLING.

(a) In General.--Chapter 53 of title 31, United States Code, is
amended by adding at the end the following:

``SUBCHAPTER IV--PROHIBITION ON FUNDING OF INTERNET GAMBLING

``Sec. 5361. Definitions
``For purposes of this subchapter, the following definitions 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 subject to chance,
upon an agreement or understanding that the person or
another person will receive something of value 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 described in
section 3702 of title 28, United States Code;
``(D) includes any instructions or information
pertaining to the establishment or movement of funds
in, to, or from an account by the bettor or customer
with regard to the business of betting or wagering; and
``(E) does not include--
``(i) any activity governed by the
securities laws (as that term is defined in
section 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
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 Exchange
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
Exchange Act of 1934;
``(v) any contract of indemnity or
guarantee;
``(vi) any contract for insurance;
``(vii) any deposit or other transaction
with an insured institution; or
``(viii) any participation in a 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 performance in any single
sporting event;
``(II) has an outcome that reflects
the relative knowledge of the
participants, or their skill at
physical reaction or physical
manipulation (but not chance), and, in
the case of a simulation sports game,
has an outcome that is determined
predominantly by accumulated
statistical results of sporting events;
and
``(III) offers a prize or award to
a participant that is established in
advance of the game or contest and is
not determined by the number of
participants 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 any creditor, credit
card issuer, insured institution, or other financial
institution, operator of a terminal at which an electronic fund
transfer may be initiated, money transmitting business, or
international, national, regional, or local network utilized to
effect a credit transaction, electronic fund transfer,
stored value product transaction, or money transmitting service, or any
participant in such network, or any interactive computer service or
telecommunications service.
``(3) Closed-loop subscriber-based service.--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,
exclusively for placing, receiving, or
otherwise making a bet or wager described in
subsection (b)(1) or (c)(1) of section 5363;
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 information 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, and a system reasonably designed to verify the
location at which a bet or wager is made, to ensure
that all applicable Federal and State legal and
regulatory requirements 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.
``(4) Designated payment system.--The term `designated
payment system' means any system utilized by any creditor,
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 network utilized to effect a credit
transaction, electronic fund transfer, stored value product
transaction, or money transmitting service, or any participant
in such network, that the Secretary, in consultation with the
Board of Governors of the Federal Reserve System and the
Attorney General of the United States, determines, by
regulation or order, could be utilized in connection with, or
to facilitate, any restricted transaction.
``(5) Internet.--The term `Internet' means the
international computer network of interoperable packet switched
data networks.
``(6) Interactive computer service.--The term `interactive
computer service' has the same meaning as in section 230(f) of
the Communications Act of 1934.
``(7) Internet gambling.--The term `Internet gambling'
means the placing, receipt, or other transmission of a bet or
wager by any means which involves the use, at least in part, of
the Internet.
``(8) Office.--The term `Office' means the Office of
Electronic Funding Oversight, established under section 5362.
``(9) Private network.--The term `private network' means a
communications channel or channels, including voice or computer
data transmission facilities, that uses either--
``(A) private dedicated lines; or
``(B) the public communications infrastructure, if
the infrastructure is secured by means of the
appropriate private communications technology to
prevent unauthorized access.
``(10) Restricted transaction.--The term `restricted
transaction' means any transaction or transmittal involving any
credit, funds, instrument, or proceeds described in any
paragraph of section 5363(a) which the recipient is prohibited
from accepting under section 5363.
``(11) Secretary.--The term `Secretary' means the Secretary
of the Treasury.
``(12) Other terms.--
``(A) Credit; creditor; credit card; and card
issuer.--The terms `credit', `creditor', `credit card',
and `card issuer' have the same 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 section
903 of the Electronic Fund Transfer Act, except
that such term includes transfers that would
otherwise be excluded under section 903(6)(E)
of that Act; and
``(ii) includes any fund transfer covered
by Article 4A of the Uniform Commercial 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 casino, sports book, or other
business at or through which bets or wagers may be
placed or received.
``(D) Insured institution.--The term `insured
institution' means--
``(i) an insured depository institution, as
defined in section 3 of the Federal Deposit
Insurance Act; and
``(ii) 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 transmitting service' have the
same meanings as in section 5330(d) (determined without
regard to any regulations issued by the Secretary
thereunder).
``Sec. 5362. Office of electronic funding oversight; policies and
procedures to identify and prevent restricted
transactions
``(a) Establishment of Treasury Office.--
``(1) In general.--There is established within the
Department of the Treasury, the Office of Electronic Funding
Oversight, the purposes of which are--
``(A) to coordinate Federal efforts to prohibit
restricted transactions; and
``(B) otherwise to carry out the duties specified
in this subchapter.
``(2) Director.--The Office shall be headed by a Director,
appointed by the Secretary. The Director of the Office may
serve as the designee of the Secretary, at the request of the
Secretary, for any purpose under this subchapter.
``(b) Regulations.--Not later than 270 days after the date of
enactment of this subchapter, the Secretary, in consultation with the
Board of Governors of the Federal Reserve System and the Attorney
General of the United States, shall prescribe regulations requiring
each designated payment system, and all participants therein, to
identify and prevent restricted transactions through the establishment
of policies and procedures reasonably designed to--
``(1) allow the payment system and any person involved in
the payment system to identify restricted transactions by means
of codes in authorization messages or by other means;
``(2) block restricted transactions identified as a result
of the policies and procedures developed pursuant to paragraph
(1); and
``(3) prevent the acceptance of the products or services of
the payment system in connection with a restricted transaction.
``(c) Requirements for Policies and Procedures.--In prescribing
regulations pursuant to subsection (b), the Secretary shall--
``(1) identify types of policies and procedures, including
nonexclusive examples, which would be deemed, as applicable, to
be `reasonably designed to identify' and `reasonably designed
to block', or `reasonably designed to prevent the acceptance of
the products or services' with respect to each type of
restricted transaction;
``(2) to the extent practical, permit any participant in a
payment system to choose among alternative means of identifying
and blocking, or otherwise preventing the acceptance of the
products or services of the payment system or participant in
connection with, restricted transactions; and
``(3) consider exempting restricted transactions from any
requirement imposed under such regulations, if the Secretary
finds that it is not reasonably practical to identify and
block, or otherwise prevent, such transactions.
``(d) Compliance With Payment System Policies and Procedures.--A
creditor, 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
network utilized to effect a credit transaction, electronic fund
transfer, stored value product transaction, or money transmitting
service, or a participant in such network, shall be considered to be in
compliance with the regulations prescribed under subsection (b), if--
``(1) such person relies on and complies with the policies
and procedures of a designated payment system of which it is a
member or participant--
``(A) to identify and block restricted
transactions; and
``(B) to otherwise prevent the acceptance of the
products or services of the payment system, member, or
participant in connection with restricted transactions;
and
``(2) such policies and procedures of the designated
payment system comply with the requirements of regulations
prescribed under subsection (b).
``(e) No Liability for Blocking or Refusing To Honor Restricted
Transactions.--A person that is subject to a regulation prescribed or
order issued under this subchapter and blocks, or otherwise refuses to
honor, a restricted transaction (or a transaction that such person
reasonably believes to be a restricted transaction), or as a member of
a designated payment system relies on the policies and procedures of
the payment system, in an effort to comply with regulations prescribed
under subsection (b), shall not be liable to any party for such action.
``(f) Regulatory Enforcement.--Regulations issued by the Secretary
under this subchapter shall be enforced by the Federal functional
regulators and the Federal Trade Commission, in the manner provided in
section 505(a) of the Gramm-Leach-Bliley Act.
``Sec. 5363. Prohibition on acceptance of any bank instrument for
Internet gambling
``(a) Prohibition.--No person engaged in the business of betting or
wagering may knowingly accept, in connection with the participation of
another person in Internet gambling--
``(1) credit, or the proceeds of credit, extended to or on
behalf of such other person (including credit extended through
the use of a credit card);
``(2) an electronic fund transfer, or funds transmitted 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;
``(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 financial institution; or
``(4) the proceeds of any other form of financial
transaction, as the Secretary may prescribe by regulation,
which involves a financial institution as a payor or financial
intermediary on behalf of or for the benefit of such other
person.
``(b) Rule of Application.--
``(1) Limitation.--Subject to paragraph (2), the
prohibition in subsection (a) does not apply to any otherwise
lawful bet or wager that is placed, received, or otherwise made
on an interstate or intrastate basis on a live horse or a live
dog race, or the sending, receiving, or inviting of information
assisting in the placing of such a bet or wager, if such bet or
wager, or the transmission of such information, as applicable,
is--
``(A) expressly authorized, and licensed or
regulated by the State in which such bet or wager is
received, under applicable Federal law and the laws of
that State;
``(B) placed on a closed-loop subscriber-based
service;
``(C) initiated from a State in which betting or
wagering on that same type of live horse or live dog
racing is lawful and received in a State in which such
betting or wagering is lawful;
``(D) subject to the regulatory oversight of the
State in which the bet or wager is received, and
subject to minimum control standards for the
accounting, regulatory inspection, and auditing by such
State of all such bets or wagers transmitted from 1
State to another; and
``(E) in the case of--
``(i) live horse racing, made in accordance
with the Interstate Horse Racing Act of 1978
(15 U.S.C. 3001 et seq.); or
``(ii) live dog racing, subject to consent
agreements that are comparable to those
required by the Interstate Horse Racing Act of
1978, approved by the appropriate State
regulatory agencies, in the State receiving the
signal, and in the State in which the bet or
wager originates.
``(2) Bets or wagers made by agents or proxies.--
``(A) In general.--The exception under paragraph
(1) does not apply in any case in which a bet or wager
is placed, received, or otherwise made by the use of an
agent or proxy using the Internet or an interactive
computer service.
``(B) Qualification.--Nothing in this paragraph may
be construed to prohibit the owner operator of a
parimutuel wagering facility that is licensed by a
State from employing an agent in the operation of the
account wagering system owned or operated by the
parimutuel facility.
``(c) Other Rules of Application.--
``(1) Limitation.--Subject to paragraph (2), the
prohibition in subsection (a) does not apply to any otherwise
lawful bet or wager that is placed, received, or otherwise made
on any game that constitutes class II gaming or class III
gaming (as those terms are defined in section 4 of the Indian
Gaming Regulatory Act, 25 U.S.C. 2703), or the sending,
receiving, or inviting of information assisting in the placing
of any such bet or wager, as applicable, if--
``(A) the game is permitted under and conducted in
accordance with the Indian Gaming Regulatory Act (25
U.S.C. 2701 et seq.);
``(B) each person placing, receiving, or otherwise
making such bet or wager, or transmitting such
information, is physically located on Indian lands (as
that term is defined in section 4 of the Indian Gaming
Regulatory Act, 25 U.S.C. 2703) when such person
places, receives, or otherwise makes the bet or wager,
or transmits such information;
``(C) the game is conducted on a closed-loop
subscriber-based system or a private network; and
``(D) in the case of a game that constitutes class
III gaming--
``(i) the game is authorized under, and is
conducted in accordance with, the respective
Tribal-State compacts (entered into and
approved pursuant to section 11(d) of the
Indian Gaming Regulatory Act, 25 U.S.C. 2710)
governing gaming activity on the Indian lands,
in each respective State, on which each person
placing, receiving, or otherwise making such
bet or wager, or transmitting such information,
is physically located when such person places,
receives, or otherwise makes the bet or wager,
or transmits such information; and
``(ii) each such Tribal-State compact
expressly provides that the game may be
conducted using the Internet or other
interactive computer service only on a closed-
loop subscriber-based system or a private
network.
``(2) Activities under existing compacts.--
``(A) In general.--The requirement of paragraph
(1)(D)(ii) does not apply in the case of gaming
activity, otherwise subject to this section, that was
being conducted on Indian lands on July 31, 2003, using
the Internet or other interactive computer service,
with the approval of the State gaming commission or
like regulatory authority of the State in which such
Indian lands are located, but without such required
compact approval, until the date on which the compact
governing gaming activity on such Indian lands expires
(exclusive of any automatic or discretionary renewal or
extension of such compact), if such gaming activity is
conducted using the Internet or other interactive
computer service only on a closed-loop subscriber-based
system or a private network.
``(B) Definition.--For purposes of this paragraph,
the phrase `conducted on Indian lands' shall refer to
all Indian lands on which any person placing,
receiving, or otherwise making a bet or wager, or
sending, receiving, or inviting information assisting
in the placing of a bet or wager, is physically located
when such person places, receives, or otherwise makes
the bet or wager, or sends, receives, or invites such
information.
``Sec. 5364. Civil remedies
``(a) Jurisdiction.--The district courts of the United States shall
have original and exclusive jurisdiction to prevent and restrain
violations of this subchapter or the rules or regulations issued under
this subchapter by issuing appropriate orders in accordance with this
section, regardless of whether a prosecution has been initiated under
this subchapter.
``(b) Proceedings.--
``(1) Institution by federal government.--
``(A) In general.--The United States, acting
through the Attorney General of the United States, or,
in the case of rules or regulations issued under this subchapter,
through an agency authorized to enforce such regulations in accordance
with this subchapter, may institute proceedings under this section to
prevent or restrain a violation or a threatened violation of this
subchapter or such rules or regulations.
``(B) Relief.--Upon application of the United
States under this paragraph, the district court may
enter a preliminary injunction or an injunction against
any person to prevent or restrain a violation or
threatened violation of this subchapter or the rules or
regulations issued under this subchapter, in accordance
with rule 65 of the Federal Rules of Civil Procedure.
``(2) Institution by state attorney general.--
``(A) In general.--The attorney general (or other
appropriate State official) of a State in which a
violation of this subchapter allegedly has occurred or
will occur may institute proceedings under this section
to prevent or restrain the violation or threatened
violation.
``(B) Relief.--Upon application of the attorney
general (or other appropriate State official) of an
affected State under this paragraph, the district court
may enter a preliminary injunction or an injunction
against any person to prevent or restrain a violation
or threatened violation of this subchapter, in
accordance with rule 65 of the Federal Rules of Civil
Procedure.
``(3) Indian lands.--Notwithstanding paragraphs (1) and
(2), for a violation of this subchapter or the rules or
regulations issued under this subchapter that is alleged to
have occurred, or may occur, on Indian lands (as that term is
defined in section 4 of the Indian Gaming Regulatory Act)--
``(A) the United States shall have the enforcement
authority provided under paragraph (1); and
``(B) the enforcement authorities specified in an
applicable Tribal-State compact negotiated under
section 11 of the Indian Gaming Regulatory Act
(including such authorities that may apply to
activities described in section 5363(c)) shall be
carried out in accordance with that compact.
``(c) Expedited Proceedings.--In addition to any proceeding under
subsection (b), a district court may, in exigent circumstances, enter a
temporary restraining order against a person alleged to be in violation
of this subchapter or the rules or regulations issued under this
subchapter, upon application of the United States under subsection
(b)(1), or the attorney general (or other appropriate State official)
of an affected State under subsection (b)(2), in accordance with rule
65(b) of the Federal Rules of Civil Procedure.
``(d) Limitation Relating to Interactive Computer Services.--
``(1) In general.--Relief granted under this section
against an interactive computer service shall--
``(A) be limited to the removal of, or disabling of
access to, an online site violating this subchapter, or
a hypertext link to an online site violating this
subchapter, that resides on a computer server that such
service controls or operates, except that the
limitation in this subparagraph shall not apply if the
service is subject to liability under this section
pursuant to section 5366;
``(B) be available only after notice to the
interactive computer service and an opportunity for the
service to appear are provided;
``(C) not impose any obligation on an interactive
computer service to monitor its service or to
affirmatively seek facts indicating activity violating
this subchapter;
``(D) specify the interactive computer service to
which it applies; and
``(E) specifically identify the location of the
online site or hypertext link to be removed or access
to which is to be disabled.
``(2) Coordination with other law.--An interactive computer
service that does not violate this subchapter shall not be
liable under section 1084 of title 18, United States Code,
except that the limitation in this paragraph shall not apply if
an interactive computer service has actual knowledge and
control of bets and wagers and--
``(A) operates, manages, supervises, or directs an
Internet website at which bets or wagers may be placed,
received, or otherwise made or at which bets or wagers
are offered to be placed, received, or otherwise made;
or
``(B) owns or controls, or is owned or controlled
by, any person who operates, manages, supervises, or
directs an Internet website at which bets or wagers may
be placed, received, or otherwise made, or at which
bets or wagers are offered to be placed, received, or
otherwise made.
``(3) Rule of construction.--The provisions of paragraph
(2) do not affect any potential liability of an interactive
computer service or other person under any provision of title
18, United States Code, other than as specifically provided in
paragraph (2).
``(e) Factors To Be Considered in Certain Cases.--In considering
granting relief under this section 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, money transmitting business, or
international, national, regional, or local network utilized to effect
a credit transaction, electronic fund transfer, stored value product
transaction, or money transmitting service, or a participant in such
network, the court shall consider--
``(1) the extent to which the person extending credit or
transmitting funds knew or should have known that the
transaction was in connection with Internet gambling;
``(2) the history of such person in extending credit or
transmitting funds when such person knew or should have known
that the transaction is in connection with Internet gambling;
``(3) the extent to which such person has established and
is maintaining policies and procedures in compliance with rules
and regulations issued under this subchapter;
``(4) the extent to which it is feasible for any specific
remedy prescribed as part of such relief to be implemented by
such person without substantial deviation from normal business
practice; and
``(5) the costs and burdens that the specific remedy will
have on such person.
``(f) Notice to Regulators and Financial Institutions.--Before
initiating any proceeding under subsection (b) (or under subsection
(c), in the case of an insured institution or a broker or dealer or
investment company registered with the Securities and Exchange
Commission), with respect to a violation or potential violation of this
subchapter or the rules or regulations issued under this subchapter by
any creditor, 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
network utilized to effect a credit transaction, electronic fund
transfer, stored value product transaction, or money transmitting
service, or any participant in such network, the Attorney General of
the United States, an attorney general (or other appropriate State
official) of a State, or an agency authorized to initiate such
proceeding under this subchapter, shall--
``(1) notify such person, and the appropriate regulatory
agency (as determined in accordance with section 5362(f) for
such person) of such violation or potential violation and the
remedy to be sought in such proceeding; and
``(2) allow such person not longer than 60 days to
implement a remedy for the violation or potential violation,
consistent with the factors described in subsection (e), and in
conjunction with such action as the appropriate regulatory
agency may take, if such person takes reasonable steps within
that 60-day period to prevent the occurrence of such violation
or potential violation pending implementation of such remedy.
``Sec. 5365. Criminal penalties
``(a) In General.--Whoever violates any provision of this
subchapter or the rules or regulations issued under any provision of
this subchapter shall be fined under title 18, United States Code, or
imprisoned for not more than 5 years, or both.
``(b) Permanent Injunction.--Upon conviction of a person under this
section, the court may enter a permanent injunction enjoining such
person from placing, receiving, or otherwise making bets or wagers or
sending, receiving, or inviting information assisting in the placing of
bets or wagers.
``Sec. 5366. Circumventions prohibited
``Notwithstanding section 5361(2), a creditor, 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 network utilized to effect
a credit transaction, electronic fund transfer, stored value product
transaction, or money transmitting service, or any participant in such
network, or any interactive computer service or telecommunications
service, may be liable under this subchapter if such creditor, issuer,
institution, operator, business, network, or participant has actual
knowledge and control of bets and wagers, and--
``(1) operates, manages, supervises, or directs an Internet
website at which bets or wagers may be placed, received, or
otherwise made, or at which bets or wagers are offered to be
placed, received, or otherwise made; or
``(2) owns or controls, or is owned or controlled by, any
person who operates, manages, supervises, or directs an
Internet website at which bets or wagers may be placed,
received, or otherwise made, or at which bets or wagers are
offered to be placed, received, or otherwise made.
``Sec. 5367. Rule of construction
``No provision of this subchapter shall be construed as altering,
superseding, or otherwise affecting the application of the Indian
Gaming Regulatory Act.
``Sec. 5368. Authorization of appropriations
``There are authorized to be appropriated to the Secretary such
sums as may be necessary to carry out this subchapter.''.
(b) Clerical Amendment.--The table of sections for chapter 53 of
title 31, United States Code, is amended by adding at the end the
following:

``5361. Definitions.
``5362. Office of electronic funding oversight; policies and procedures
to identify and prevent restricted
transactions.
``5363. Prohibition on acceptance of any bank instrument for Internet
gambling.
``5364. Civil remedies.
``5365. Criminal penalties.
``5366. Circumventions prohibited.
``5367. Rule of construction.
``5368. Authorization of appropriations.''.

SEC. 4. INTERNET GAMBLING IN OR THROUGH FOREIGN JURISDICTIONS.

(a) In General.--In deliberations between the United States
Government and any other country on money laundering, corruption, and
crime issues, the United States Government shall--
(1) encourage cooperation by foreign governments and
relevant international fora in identifying whether Internet
gambling operations are being used for money laundering,
corruption, or other crimes;
(2) advance policies that promote the cooperation of
foreign governments, through information sharing or other
measures, in the enforcement of this Act and the amendments
made by this Act; and
(3) encourage the Financial Action Task Force on Money
Laundering, in its annual report on money laundering
typologies, to study the extent to which Internet gambling
operations are being used for money laundering purposes.
(b) Report Required.--The Secretary of the Treasury shall submit an
annual report to Congress on any deliberations between the United
States and other countries on issues relating to Internet gambling.

SEC. 5. AMENDMENTS TO CRIMINAL GAMBLING PROVISIONS.

(a) Amendment to Definition.--Section 1081 of title 18, United
States Code, is amended--
(1) by designating the 5 undesignated paragraphs that begin
with ``The term'' as paragraphs (1) through (5), respectively;
and
(2) in paragraph (5), as so designated--
(A) by striking ``wire communication'' and
inserting ``communication'';
(B) by inserting ``satellite, microwave,'' after
``cable,''; and
(C) by inserting ``(whether fixed or mobile)''
after ``connection''.
(b) Application of Section 1084(a) to All Communications and
Increase in Penalty for Transfers of Wagering Information.--Section
1084(a) of title 18, United States Code, is amended--
(1) by striking ``wire'' each place that term appears; and
(2) by striking ``two years'' and inserting ``5 years''.

Calendar No. 346

108th CONGRESS

1st Session

S. 627

[Report No. 108-173]

_______________________________________________________________________

A BILL

To prevent the use of certain payment instruments, credit cards, and
fund transfers for unlawful Internet gambling, and for other purposes.

_______________________________________________________________________

October 27, 2003

Reported with an amendment