Internet Gambling Regulation, Enforcement, and Consumer Protection Act of 2013 - Prohibits operation of an Internet gambling facility that offers services to persons in the United States, except as authorized under this Act. Provides exceptions with respect to licensed race tracks, operators offering lottery transactions or services relating to bets or wagers by a state or Indian tribe, and persons engaged outside the United States in bet or wager activities that are initiated, received, or made solely by individuals outside the United States.
Establishes within the Treasury the Office of Internet Gambling Oversight, headed by an Executive Director. Outlines requirements for the designation of entities for the regulation and oversight of authorized Internet gambling facilities. Authorizes the Secretary of the Treasury to withdraw such designation in appropriate circumstances. Includes the Office as such an entity.
Directs the Secretary to establish and carry out an application and licensing program for such facilities, including suitability qualifications and disqualification standards. Provides for disciplinary procedures and civil penalties against licensee violators.
Requires each designated entity, before issuing a facility license, to provide for the development of a compulsive gaming, responsible gaming, and self-exclusion program, to be implemented by each licensee.
Allows gambling at such facilities only with respect to bets or wagers from individuals located in states and Indian lands that have opted-in for participation in such gaming. Provides for opt-in and opt-out elections.
Prohibits this Act from being construed to authorize a licensee to accept a wager on any sporting event in violation of a federal or state law.
Makes it a violation of this Act to operate a place of public accommodation in which computer terminals or similar devices are made available principally for accessing such facilities.
Prohibits Internet gambling cheating and the use of cheating devices and provides enforcement authority.
Authorizes designated entities to issue initial licenses before the authorized date of first issuance under this Act (270 days after enactment).
Requires annual reports from the Secretary to Congress on the licensing and regulation of such facilities and on practices to protect consumers with respect to such gambling.
Directs the Secretary to require the independent testing of hardware, software, communications equipment, and other necessary devices for such facilities to ensure their integrity, accountability, randomness of play, and network security.
Amends the Public Health Service Act to require the Secretary of Health and Human Services (HHS) to establish and implement programs for the identification, prevention, and treatment of pathological and other problem gambling.
Directs the Treasury Secretary to compile and make publicly available datasets on player gambling behavior.
Provides for enforcement of provisions of this Act through the federal criminal code and federal financial transaction requirements.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2282 Introduced in House (IH)]
113th CONGRESS
1st Session
H. R. 2282
To regulate Internet gambling, to provide consumer protections, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 6, 2013
Mr. King of New York introduced the following bill; which was referred
to the Committee on Energy and Commerce, and in addition to the
Committees on Financial Services and the Judiciary, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
_______________________________________________________________________
A BILL
To regulate Internet gambling, to provide consumer protections, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Internet Gambling
Regulation, Enforcement, and Consumer Protection Act of 2013''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--INTERNET GAMBLING REGULATION AND CONSUMER PROTECTION
Sec. 101. Findings.
Sec. 102. Definitions.
Sec. 103. Prohibition on operation of internet gambling facilities.
Sec. 104. Office of Internet Gambling Oversight.
Sec. 105. Qualified bodies.
Sec. 106. Establishment of licensing program for internet gambling.
Sec. 107. Compulsive gaming, responsible gaming, and self-exclusion
program requirements.
Sec. 108. Prohibition on use of licenses in certain States and Indian
lands.
Sec. 109. Prohibition on bets or wagers on sporting events.
Sec. 110. Public internet gambling and internet gambling parlors
prohibited.
Sec. 111. Safe harbor.
Sec. 112. Cheating and other fraud.
Sec. 113. Construction and relation to other law.
Sec. 114. Orderly transition.
Sec. 115. Annual reports.
Sec. 116. Independent testing of licensed operator equipment.
Sec. 117. Inclusion of authority to address gambling addiction in
samhsa authorities.
Sec. 118. Compilation of datasets on player behavior.
Sec. 119. Effective date.
TITLE II--ENFORCEMENT UNDER TITLES 18 AND 31, UNITED STATES CODE
Sec. 201. Financial service providers.
Sec. 202. Amendments relating to illegal gambling businesses.
Sec. 203. Further amendments to subchapter IV of chapter 53 of title
31, United States Code.
Sec. 204. Bettor forfeiture.
Sec. 205. Regulations.
Sec. 206. Conforming amendment.
TITLE III--OTHER MATTERS
Sec. 301 Severability.
TITLE I--INTERNET GAMBLING REGULATION AND CONSUMER PROTECTION
SEC. 101. FINDINGS.
(a) Findings.--Congress makes the following findings:
(1) Since the development of the Internet, Internet sites
offering Internet gambling have raised consumer protection and
enforcement concerns for Federal and State governments as such
Internet sites are often run by unknown operators located in
many different countries, subject to little or no oversight,
and have sought to attract customers from the United States.
(2) Subchapter IV of chapter 53 of title 31, United States
Code, which was added by the enactment of the Unlawful Internet
Gambling Enforcement Act of 2006 (title VIII of Public Law 109-
347; 120 Stat. 1952), makes it a Federal crime for gambling
businesses to knowingly accept most forms of payment in
connection with the participation of another person in unlawful
Internet gambling. Since the enactment of the Unlawful Internet
Gambling Enforcement Act of 2006, such subchapter IV has helped
aid enforcement efforts against unlawful Internet gambling
operators and to limit unlawful Internet gaming involving
United States persons.
(3) In 2006, Congress enacted the Unlawful Internet
Gambling Enforcement Act, which prohibited the acceptance or
processing of financial instruments for the purpose of unlawful
Internet gambling, but which did not clarify which bets or
wagers are prohibited by law. Groups such as the National
District Attorneys Association and the Fraternal Order of
Police have expressed support for a law that clearly prohibits
all unlicensed Internet gambling. Enacting such a law will aid
law enforcement, prosecutors and courts in their efforts to
curtail unlawful Internet gambling.
(4) On December 23, 2011, the Department of Justice
released a memorandum opinion of the Office of Legal Counsel
dated September 20, 2011, that construed section 1084 of title
18, United States Code (referred to as the ``Wire Act''), to
apply only to sports-related gambling activities in interstate
and foreign commerce, with the result that non-sports related
Internet gambling in the United States has been found not to be
prohibited under Federal law if it is lawful under State law.
(5) A growing number of States and Indian tribes have
legalized or are considering legalizing and promoting Internet
gambling to generate revenue. Absent Federal limitations and
enforcement, State regulation of Internet gambling, including
consumer safeguards, could vary widely from State to State, and
States could have difficulty enforcing Internet gambling
restrictions within their borders, especially against out-of-
State operators.
(6) A number of States have authorized or are considering
authorizing Internet purchases of lottery subscriptions or
other lottery games to generate revenue, which should not be
prevented by Federal law.
(7) Federal law needs to be updated to make clear its
relationship to Internet gambling to strengthen enforcement and
to ensure an effective Internet gambling enforcement structure
that protects consumers and the ability of States to enforce
State laws relating to Internet gambling.
(8) Since the passage of the Professional and Amateur
Sports Protection Act (Public Law 102-559) in 1992, which added
chapter 178 to title 28, United States Code, such chapter has
played an important and effective role in implementing
longstanding Federal policy against gambling on professional,
scholastic, and amateur sporting events.
(9) Additional tools to assist law enforcement, banks and
financial transaction providers, and Internet service providers
in the prevention of unlawful Internet gambling activities
would be important and beneficial. Maintenance of a list of
licensed Internet gambling operators would provide a level of
certainty as to permitted transactions and law enforcement
efforts.
(10) Internet gambling, like much other Internet commerce,
traverses State boundaries. Any particular transaction may
cross a number of State boundaries from origin to destination,
and communications between the same parties at different times
may travel along markedly different routes, based on factors
such as traffic, load capacity, and other technical
considerations outside the control of sender and recipient. For
that reason, among others, the Federal courts consistently have
ruled that the Internet is an instrumentality and channel of
interstate commerce and, as such, is subject to Congress's
plenary authority. For these same reasons, Internet gambling by
its very nature implicates Federal concerns, and is different
in kind and effect from traditional gambling activity.
(11) A Federal regime to regulate Internet gambling and to
protect consumers should include an effective framework--
(A) to prevent underage wagering and otherwise to
protect vulnerable individuals;
(B) to ensure the games are fair and are conducted
honestly;
(C) to ensure that States and Indian tribes that
wish to prohibit Internet gambling may do so;
(D) to promote the ability of State and Tribal
lotteries to generate revenue for the jurisdictions
that license them; and
(E) to facilitate the enforcement of Federal,
State, and tribal laws against unauthorized Internet
gambling.
(12) To avoid uneven treatment of Internet gambling and
land-based gambling and the risk of discrimination against
existing land-based gambling operations and States that have
authorized gambling, a Federal regime to regulate Internet
gambling should contain revenue measures sufficient to ensure
that Internet gambling activities generate at least equivalent
revenues for the Federal Government and the States combined as
they would generate if the gambling was carried out at land-
based operations.
(13) Federal regulation of Internet gambling should be
designed and implemented to foster a level-playing field among
all forms of traditional gambling and all types of Internet
gambling operators, including casinos, Indian tribes offering
gambling services, State-licensed lotteries, horseracing, and
any other form of gambling that is not sports-related, as well
as among Internet companies with relevant expertise in e-
commerce who meet the same qualifications as traditional
casinos for integrity and for the capacity to carry out
Internet gambling operations that meet applicable Federal and
State standards.
SEC. 102. DEFINITIONS.
In this title:
(1) Applicant.--The term ``applicant'' means any person who
has applied for a license under this title.
(2) Bet or wager.--
(A) In general.--Except as provided in subparagraph
(B), the term ``bet or wager'' has the meaning given
the term in section 5362 of title 31, United States
Code.
(B) Exception.--The term ``bet or wager'' does not
include the following:
(i) A bet or wager that is permissible
under the Interstate horseracing Act of 1978
(15 U.S.C. 3001 et seq.).
(ii) A qualifying intrastate lottery
transaction.
(3) Casino gaming.--
(A) In general.--Except as provided in subparagraph
(B), the term ``casino gaming'' means the full range of
casino gaming activity licensed by regulatory bodies of
States or Indian tribes that would be qualified as
class III gaming under section 4 of the Indian Gaming
Regulatory Act (25 U.S.C. 2703) if that Act were
applicable to the gaming.
(B) Exception.--The term ``casino gaming'' does not
include lotteries of States or Indian tribes in
compliance with the law of that State or Indian tribe,
as applicable, and which solely provide lottery tickets
to participants wholly within the boundaries of such
State or the Indian lands of such Indian tribe.
(4) Gaming device.--
(A) In general.--Except as provided in subparagraph
(B), the term ``gaming device'' means any computer-
based gambling machine, including slot machines and
video lottery terminals that have been approved by a
gaming regulatory authority of a State or Indian tribe.
(B) Exception.--The term ``gaming device'' does not
include machines that process bets or wagers for pari-
mutuel betting pools.
(5) Indian lands and indian tribe.--The terms ``Indian
lands'' and ``Indian tribe'' have the meaning given the terms
in section 4 of the Indian Gaming Regulatory Act (25 U.S.C.
2703).
(6) Internet.--The term ``Internet'' has the meaning given
the term in section 5362 of title 31, United States Code.
(7) Internet gambling facility.--The term ``Internet
gambling facility'' means an Internet website, or similar
communications facility in which transmissions may cross State
boundaries, through which a bet or wager is initiated,
received, or otherwise made, whether transmitted by telephone,
Internet, satellite, or other wire or wireless communication
facility, service, or medium, including an Internet gambling
facility not operating under a license in good standing issued
under this title, including any facility that facilitates
qualifying intrastate lottery transactions to the degree that
such facility facilitates such transactions.
(8) Licensee.--The term ``licensee'' means a person who
operates an Internet gambling facility under a license issued
by a qualified body pursuant to this title.
(9) Live racing.--The term ``live racing'' means, with
respect to a physical race track, the conduct of live
thoroughbred horse races at such race track and does not
include any races simulcasted from a separate race track.
(10) Operate an internet gambling facility.--The term
``operate an Internet gambling facility'' means to conduct,
direct, manage, own, supervise, or control an Internet gambling
facility.
(11) Person.--The term ``person'' means a natural person,
corporation, casino gambling facility, or race track, an
Internet gambling facility, an Internet poker facility, a State
or State agency, or an Indian tribe or corporation, agency, or
instrumentality of an Indian tribe.
(12) Qualified body.--The term ``qualified body'' means the
following:
(A) The Office of Internet Gambling Oversight
established under section 104(a) and designated under
section 105(a)(2).
(B) Any State agency or regulatory body of an
Indian tribe that has been designated as a qualified
body under paragraph (1) or (3) of section 105(a).
(13) Qualified race track.--The term ``qualified race
track'' means a race track that has been licensed by a
regulatory authority of a State or Indian tribe.
(14) Qualifying intrastate lottery.--The term ``qualifying
intrastate lottery'' means a lottery or other prize, through
the purchase of a chance or opportunity to win, that is offered
by a State or Indian tribe--
(A) that is operating lawfully under the laws of
that State or Indian tribe, as the case may be;
(B) that is not related to a sporting event;
(C) in which the opportunity to win is
predominately subject to chance; and
(D) that provides the chances or opportunity to win
for purchase to participants only within the boundaries
of that State or the Indian lands of that Indian tribe,
as the case may be.
(15) Qualifying lottery transaction.--The term ``qualifying
lottery transaction'' means the purchase of a chance or
opportunity to win a lottery or other prize offered by a State
lottery, operating lawfully under the laws of a State or Indian
tribe, that is not sports-related and--
(A) which opportunity to win is predominantly
subject to chance; and
(B) which is authorized by a State or Indian tribe.
(16) Remote gaming equipment.--
(A) In general.--Except as provided in subparagraph
(B), the term ``remote gaming equipment'' means
electronic or other equipment principally used by or on
behalf of an operator of an Internet gambling facility,
including by any significant vendor to such operator,
to--
(i) register a person's participation in
Internet gambling and to store information
relating thereto;
(ii) present to persons who are
participating or who may participate in
Internet gambling the game that is to be
played;
(iii) determine all or part of, or the
effect of, a result relevant to Internet
gambling and to store information relating
thereto;
(iv) accept payment with respect to
Internet gambling from the player; or
(v) authorize payment of any winnings in
respect of Internet gambling.
(B) Exception.--The term ``remote gaming
equipment'' does not include the following:
(i) Equipment used for business continuity,
back-up, excess capacity, or other secondary
use.
(ii) A computer which is used by a person
to participate in Internet gambling unless the
computer is provided by or on behalf of the
person who is conducting or providing the
facilities for the game.
(iii) Equipment operated in the ordinary
course of providing banking,
telecommunications, or payment processing
services.
(iv) Such other equipment that provides
ancillary services as the Secretary considers
appropriate.
(17) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
(18) Significant vendor.--The term ``significant vendor''
means a person who--
(A) on behalf of a licensee, knowingly manages,
administers, or controls bets or wagers that are
initiated, received, or otherwise made within the
United States;
(B) on behalf of a licensee, knowingly manages,
administers, or controls the games with which such bets
or wagers are associated;
(C) on behalf of a licensee, develops, maintains,
or operates the software or other system programs or
hardware on which the games or the bets or wagers are
managed, administered, or controlled;
(D) provides the trademarks, tradenames, service
marks, or similar intellectual property under which a
licensee identifies its Internet gambling facility to
its customers in the United States;
(E) sells, licenses, or otherwise receives
compensation for selling or licensing information on
individuals in the United States that made bets or
wagers with an Internet gambling facility not licensed
under this title via a database or customer lists;
(F) provides any products, services, or assets to a
licensee and is paid a percentage of gaming revenue or
commission fees by the licensee (not including fees to
financial institutions and payment providers for
facilitating a deposit by a customer); or
(G) with respect to an applicant, proposes to
provide any of the activities, services, or items
identified in subparagraphs (A) through (F).
(19) Sporting event.--
(A) In general.--Except as provided in subparagraph
(B), the term ``sporting event'' means any athletic
competition, whether professional, scholastic, or
amateur or any performance of any athlete in such
competitions.
(B) Exception.--The term ``sporting event'' does
not include any activity described in section
3704(a)(4) of title 28, United States Code.
(20) State.--The term ``State'' means each of the several
States of the United States, the District of Columbia, and any
commonwealth, territory, or possession of the United States.
SEC. 103. PROHIBITION ON OPERATION OF INTERNET GAMBLING FACILITIES.
(a) Prohibition.--
(1) In general.--It shall be unlawful for a person to
operate an Internet gambling facility that offers services to
persons in the United States, except as authorized under this
Act.
(2) Exception.--Paragraph (1) shall not apply to the
operation of an Internet gambling facility by a person located
inside the United States who is a licensed operator under this
Act; to any qualified race track; to any operator offering
qualifying lottery transactions; to any operator authorized and
licensed to provide services relating to bets or wagers by a
State or Indian tribe in compliance with the law of that State
or Indian tribe, as applicable, and which solely provides
services to participants wholly within the boundaries of such
State or the Indian lands of such Indian tribe; or to any
person engaged outside the United States in which bets or
wagers are initiated, received, or otherwise made solely by
individuals located outside the United States.
(b) Criminal Penalties.--Any person who violates this section shall
be fined under title 18, United States Code, imprisoned for not more
than 10 years, or both.
SEC. 104. OFFICE OF INTERNET GAMBLING OVERSIGHT.
(a) Establishment.--
(1) In general.--Not later than 180 days after the date of
the enactment of this Act, the Secretary shall establish within
the Department of the Treasury an office to exercise the
functions of the Secretary under this title.
(2) Designation.--The office established under paragraph
(1) shall be known as the ``Office of Internet Gambling
Oversight'' (in this section referred to as the ``Office'').
(b) Executive Director.--
(1) In general.--The Secretary shall appoint as the head of
the Office an executive director.
(2) Experience and expertise.--The executive director of
the Office shall be appointed by the Secretary from among
individuals who demonstrate the following:
(A) Skill and experience in gaming regulation and
enforcement.
(B) Experience in criminal investigations and law
enforcement generally.
(C) A reputation for good character, honesty, and
integrity.
(3) Background investigation.--Before appointing an
individual as executive director under paragraph (1), the
Secretary shall conduct a background investigation into the
financial stability, integrity, and responsibility of the
individual.
(4) Limitations.--The Secretary may not appoint under
paragraph (1) an individual who--
(A) has been convicted of a felony; or
(B) maintains any ownership or equity interest or
any ongoing business relationship with--
(i) an operator of a casino gaming
facility, Internet gambling facility, race
track, lottery, or other regulated gambling
entity; or
(ii) A significant vendor.
(c) Delegation of Authority.--
(1) In general.--The Secretary may delegate to the
executive director of the Office any authority, duty, or
responsibility conferred upon the Secretary by this title.
(2) Regulatory authority of executive director.--The
executive director of the office may prescribe such regulations
and take such actions as may be necessary to carry out such
authorities, duties, or responsibilities delegated to the
executive director by the Secretary paragraph (1).
(d) Regulations and Standards.--
(1) Regulations and standards necessary to function as
qualified body.--With respect to the application of this title
to the functions of the Office as a qualified body under
section 105(a)(2), the Secretary shall, not later than 270 days
after the date of the enactment of this Act, prescribe
regulations and standards to implement the requirements set out
in subsections (d) and (g) of section 106 and section 107.
(2) Manner of prescription.--Regulations prescribed under
paragraph (1) shall be prescribed in accordance with section
553 of title 5, United States Code.
(e) Publication of Information to Facilitate Submittal of
Applications for Initial Designation as Qualified Bodies.--Not later
than 150 days after the date of the enactment of this Act, the
Secretary shall publish in the Federal Register such information as may
be necessary for an applicant to submit a complete application under
section 105(a)(1)(B).
(f) Detail of Government Employees.--Any Federal Government
employee may be detailed to the office without reimbursement, and such
detail shall be without interruption or loss of civil service status or
privilege.
SEC. 105. QUALIFIED BODIES.
(a) Designation of Qualified Bodies.--
(1) Initial designation of qualified bodies.--
(A) Designation.--
(i) In general.--Not later than 270 days
after the date of the enactment of this Act,
the Secretary shall designate as qualified
bodies all State agencies, and regulatory
bodies of Indian tribes, that submit
applications under subparagraph (B) and satisfy
the criteria set forth under subparagraph (C).
(ii) Subsequent designations.--After the
initial designations--
(I) the Secretary may at any time
designate additional State agencies or
regulatory bodies of Indian tribes as
qualified bodies as deemed appropriate
to carry out the goals of this Act, so
long as they meet the criteria set
forth under subparagraph (C); and
(II) notify each such agency or
regulatory body of the determinations
and designations made under subclause
(I).
(B) Application.--Each State agency or regulatory
body of an Indian tribe seeking to be designated as a
qualified body under subparagraph (A) shall submit to
the Secretary an application therefor in such form and
containing such information as the Secretary may
require, which shall be submitted not later than 180
days after the date of the enactment of this Act for
any such agency or body that seeks to be among those
designated under subparagraph (A)(i).
(C) Standards for qualified bodies.--The Secretary
shall prescribe strict threshold requirements for the
designation of agencies or regulatory bodies as
qualified bodies under this paragraph, including
standards relating to the following:
(i) The size and qualification of staff of
the qualified body to ensure the qualified body
employs sufficient number of enforcement agents
with experience in gaming regulatory
enforcement areas to discharge its intended
functions and has the sophistication and
resources necessary to evaluate issues unique
to the Internet environment.
(ii) The length of time the qualified body
has regulated other forms of gaming or e-
commerce to ensure designations of only those
regulatory bodies that have a history of
demonstrated regulatory enforcement and
oversight commensurate with the
responsibilities imposed under this title.
(iii) The qualified body's experience and
willingness to work with Federal authorities,
including the Financial Crimes Enforcement
Network.
(iv) The capacity and experience of the
qualified body in conducting rigorous
suitability reviews under section 106.
(v) The adequacy of enforcement and
regulatory authorities for the qualified body
under the law of the applicable State or Indian
tribe, including, at a minimum, requirements
and authorities on the following:
(I) To investigate the suitability
of each person required to be found
suitable in connection with an
application or license under this
title.
(II) To require licensees to
maintain appropriate procedures to
ensure the compliance of licensees with
the provisions of this title and the
regulations prescribed thereunder.
(III) To examine any licensee and
any books, papers, records, or other
data of licensees and significant
vendors relevant to any recordkeeping
or reporting requirements imposed by
the agency or regulatory body under
this title.
(IV) To summon a licensee, an
applicant, a significant vendor, an
officer or employee of a licensee,
applicant, or significant vendor
(including a former officer or
employee), or any person having
possession, custody, or care of the
reports and records required by the
agency or regulatory body as a
qualified body under this title to
appear before the agency or regulatory
body at such time and place named in
the summons, to produce such books,
papers, records, or other data, and to
give such testimony, under oath, as may
be relevant or material to any
investigation in connection with the
enforcement o this title or any
application for a license under this
title.
(V) To enforce or direct
enforcement of a summons in State or
tribal court, as the case may be.
(VI) To investigate any violation
of a provision of this title, any
applicable regulation prescribed under
this title, and any other violation of
applicable State or tribal law relating
to the operation of an Internet
gambling facility.
(VII) To conduct continuing reviews
of applicants, licensees, and
significant vendors and the operation
of Internet gambling facilities by use
of technological means, on-site
observation of facilities, including
servers, or other reasonable means to
assure compliance with the provisions
of this title and any applicable
regulation prescribed thereunder.
(VIII) To impose civil penalties
for violations of this title and any
applicable regulation prescribed
thereunder or applicable order issued
thereunder, including State or tribal
law described under this subsection.
(IX) To ensure that the hardware,
software, and communications equipment,
randomness, configuration, and network
security of the Internet gambling
facility are tested by an independent
testing laboratory.
(X) To resolve disputes between
licensees and the individuals
participating in Internet gambling via
the Internet gambling facilities of the
licensees.
(vi) Such other standards as the Secretary
considers relevant to the ability of an agency
or regulatory body to serve as an effective
qualified body.
(2) Designation of office of internet gambling oversight.--
(A) In general.--Not later than 270 days after the
date of the enactment of this Act, the Secretary shall
designate the Office of Internet Gambling Oversight
established under section 104(a) as a qualified body
that may issue licenses to Internet gambling facility
applicants and regulate the operation of Internet
gambling facilities by any applicant who seeks to
operate a licensed Internet gambling facility in the
United States.
(B) Construction.--Subparagraph (A) shall not be
construed to require any applicant seeking a license
under this title and submitting an application under
section 106(c)(1) to submit such application directly
to the Office of Internet Gambling Oversight, rather
than submitting such application to a State agency or
regulatory body of an Indian tribe that has been
designated by the Office of Internet Gambling Oversight
as a qualified body.
(3) Nonqualifying state and tribal regulatory authorities
due to limited experience or conflicts.--
(A) In general.--The Secretary may not approve an
application from a State agency or regulatory body of
an Indian tribe under paragraph (1) if--
(i) the agency or regulatory body is
located in a State or Indian lands that--
(I) has not opted in under section
108 and has not demonstrated an intent
to opt in under such section; or
(II) has not opted in under such
section and has demonstrated an intent
to opt in under such section but has
failed to opt in under such section
during the 1-year period beginning on
the date of the agency's or regulatory
body's application; or
(ii) the members of the agency or
regulatory body are selected or controlled,
directly or indirectly, by a person that has
any ownership interest in an applicant,
licensee, or significant vendor under this
title or an Internet gambling facility,
unless--
(I) such applicant or licensee is
licensed by the Secretary; or
(II) such significant vendor is
certified as suitable by the Secretary
(and remains so certified at all times
while providing services as a
significant vendor to any licensee
under this title).
(B) Non-controlling investment.--A non-controlling
investment of a State, Indian tribe, or local
government pension, retirement, annuity, or endowment
fund shall not be considered an ownership interest for
purposes of subparagraph (A)(ii).
(4) Withdrawal of designation.--
(A) In general.--Beginning on the date that is 1
year after the date on which the Secretary prescribes
final regulations under this title, the Secretary may,
after providing at least 60 days notice to a qualified
body of the Secretary's intent to do so, withdraw the
designation of a qualified body under this section if
the Secretary determines that--
(i) the qualified body is not in compliance
with the requirements of this title or
regulations prescribed thereunder; or
(ii) the qualified body is not in
compliance with the conditions under which the
qualified body was designated.
(B) Opportunity to comply.--
(i) In general.--The Secretary may provide
a qualified body who receives notice under
subparagraph (A) with an opportunity to come
into compliance as specified in that notice for
a period of not more than 90 days.
(ii) Extension.--The Secretary may extend
the period in clause (i) by not more than 180
additional days if the qualified body has made
substantial progress toward compliance as of
the expiration of the first 90 day period.
(C) Effect of notice.--The Secretary may prohibit a
qualified body that receives notice under subparagraph
(A) from issuing new licenses under this title until
the Secretary determines that the qualified body is in
compliance with the requirements of this title and
regulations prescribed thereunder.
(D) Right to appeal.--A State agency or regulatory
body of an Indian tribe that has had its designation as
a qualified body withdrawn under subparagraph (A) or
(B) may seek judicial review of such withdrawal under
chapter 7 of title 5, United States Code.
(5) Action upon withdrawal of designation.--
(A) In general.--Not later than 30 days after the
date on which the Secretary withdraws a designation of
a State agency or regulatory body of an Indian tribe
under paragraph (5), each person with a license issued
by the agency or regulatory body shall--
(i)(I) cease offering, accepting, and
providing services with respect to bets or
wagers from persons located in the United
States under such license; and
(II) return all customer deposits of United
States customers, or place those sums the
return of which to United States customers is
not feasible due to change in customer address,
bank details, or similar difficulty in escrow
in an account with a financial institution in
the United States for safekeeping and orderly
disposition by the Secretary; or
(ii) apply for a new license from a
different qualified body.
(B) Interim operation.--If a person applies for a
new license under clause (ii) of subparagraph (A), the
person may continue the activities described in clause
(i)(I) of such subparagraph until final action is taken
on the license application by the qualified body.
(C) Interim regulatory oversight.--
(i) In general.--Until final action is
taken under subparagraph (B) with respect to a
person, the Secretary shall have enforcement
and regulatory authority over the licensed
activities of such person.
(ii) Delegation.--The Secretary may
delegate enforcement and regulatory authority
under clause (i) to such qualified body as the
Secretary considers appropriate, with the
consent of the qualified body.
(b) Oversight of Qualified Bodies.--The Secretary may investigate
and take such action as the Secretary considers appropriate with
respect to any qualified body that appears, based upon the Secretary's
own inquiry or based upon credible information provided by other
qualified bodies, applicants, licensees, or law enforcement officials,
to be deficient or substantially less rigorous than other qualified
bodies in the discharge of its responsibilities under this title.
SEC. 106. ESTABLISHMENT OF LICENSING PROGRAM FOR INTERNET GAMBLING.
(a) Treasury Responsibilities and Powers.--The Secretary shall have
responsibility and authority for the following activities:
(1) Reviewing and qualifying applicants to become Internet
gambling facilities under section 105(a)(2).
(2) Reviewing and qualifying agencies and regulatory bodies
under section 105(a)(2).
(3) Exercising oversight over qualified bodies to ensure
that qualified bodies--
(A) comply with the requirements of this title; and
(B) carry out their regulatory and enforcement
functions under this title with appropriate diligence.
(4) Investigating and taking appropriate remedial action
with respect to any qualified body under section 105.
(5) Prescribing such regulations as may be necessary to
administer and enforce the provisions of this title, including
issuing regulations establishing rules and procedures for
dealing with sums placed in escrow under subsection (l)(7),
section 105(a)(6)(A)(i)(II), and section 114(b)(1)(E).
(6) Employing enforcement agents with sufficient training
and experience to administer the requirements of this title and
the regulations prescribed thereunder.
(7) Enforcing the requirements of this title by all
appropriate means provided under this title and other
provisions of law.
(b) Internet Gambling Facility Licensing Program.--
(1) Authority to issue licenses limited to non-sports
related internet gambling.--A qualified body may issue licenses
under this title only for the operation of non-sports related
Internet gambling facilities.
(2) Authority to operate internet gambling facility under
valid license.--
(A) In general.--Notwithstanding any other
provision of law and subject to the provisions of this
title, a licensee may accept a bet or wager with
respect to Internet gambling from an individual located
in the United States and may offer related services so
long as the license of the licensee issued under this
title remains in good standing.
(B) Only one license required.--Nothing in this
title may be construed to require a person to obtain a
license from more than one qualified body in order to
operate an Internet gambling facility under this title.
(C) Significant vendors.--
(i) In general.--Except as provided in
clause (ii), if a person seeks a certificate of
suitability from a qualified body to provide
services to a licensee or applicant as a
significant vendor with respect to an Internet
gambling facility, such person shall not be
required to obtain a license under this title
to provide such services with respect to that
Internet gambling facility.
(ii) Exception.--If a qualified body
determines that requiring a person described in
clause (i) to seek a license is necessary to
prevent evasion of any provision of this title,
and requiring so would otherwise be consistent
with the provisions of this title, such
qualified body may require such person to seek
a license under this title instead of a
certificate of suitability.
(3) Operation outside the united states.--
(A) Limitation.--A licensee or an affiliate of a
licensee may not operate an Internet gambling facility
that accepts a bet or wager from an individual located
outside of the United States unless the transaction is
lawful under this Act and is not unlawful in the
jurisdiction in which the individual is located.
(B) Construction.--Nothing in this title shall be
construed to authorize a licensee or a foreign
affiliate thereof to accept a bet or wager from an
individual located in any jurisdiction outside the
United States that prohibits the licensee or a foreign
affiliate from accepting such bet or wager.
(c) Application for License.--
(1) Application.--A person seeking to operate an Internet
gambling facility under this title shall submit to the Office
of Internet Gambling Oversight or any other qualified body an
application for a license therefor at such time, in such form,
and in such manner as the qualified body receiving the
application considers appropriate.
(2) Elements.--Each application submitted under paragraph
(1) shall include such information as the qualified body
receiving the application considers appropriate, including at a
minimum the following:
(A) Complete financial information about the
applicant.
(B) Documentation showing the organization of the
applicant and all related businesses and affiliates.
(C) The criminal and financial history of--
(i) the applicant;
(ii) each of the senior executives and
directors of the applicant;
(iii) any other person who is in control of
the applicant; and
(iv) such other persons as the qualified
body considers appropriate.
(D) Such other information as may be necessary for
the suitability analysis required under subsection (d).
(E) Disclosure of all other applications for
licenses previously or simultaneously submitted under
paragraph (1) to other qualified bodies and whether
those applications are pending, were granted, or were
denied.
(F) A detailed description of the applicant's plan
for complying with all applicable requirements and
regulations prescribed pursuant to this title, with
particular emphasis on the applicant's ability to
comply with the regulations prescribed under subsection
(g).
(G) A certification by the applicant that the
applicant consents to personal jurisdiction over the
applicant by Federal courts and in the courts of the
State or Indian tribe of the qualified body to which
the applicant has applied with respect to a civil
action relating to the operation of an Internet
gambling facility.
(3) Reports.--
(A) In general.--Each qualified body shall report
all applicants for licensure and the dispositions of
their applications to the Secretary promptly upon
disposition of each application or in such intervals as
the Secretary may prescribe.
(B) Contents.--Each report under subparagraph (A)
shall include such information or documentation as the
Secretary may require.
(d) Standards for License Issuance; Suitability Qualifications and
Disqualification Standards.--
(1) Suitability for licensing.--
(A) In general.--No applicant shall be eligible to
obtain a license under this title unless a qualified
body, with whom the applicant has filed an application
for a license, has determined, upon completion of a
background check and investigation, that the applicant,
any person considered to be in control of the
applicant, all significant vendors of the applicant,
and any other person determined by the qualified body
as having significant influence on the applicant are
suitable for licensing.
(B) Application as request for determination of
suitability.--An application for a license submitted to
a qualified body under this title constitutes a request
for a determination of the general character,
integrity, and ability to participate or engage in or
be associated with an Internet gambling facility, as
appropriate, of the applicant, any person considered to
be in control of the applicant, all significant vendors
of the applicant, and all other persons determined by
the qualified body as having significant influence on
the applicant.
(C) Associates.--
(i) In general.--If an entity undergoing a
determination of suitability under this
paragraph is a corporation, partnership, or
other business entity, a background check and
investigation shall be carried out by the
applicable qualified body with respect to the
president or other chief executive of the
corporation, partnership, or business entity
and such other partners or senior executives
and directors or shareholders of the
corporation, partnership, or entity as the
qualified body considers appropriate.
(ii) Minimum determination.--In carrying
out clause (i), the qualified body shall, at a
minimum, carry out a suitability review of the
5 individuals receiving the most compensation
(whether in the form of salary, bonus,
dividends, distributions, disbursement of
profits, or otherwise) from the entity, any
person that controls the entity, and such other
individuals or entities as the qualified body
considers appropriate.
(D) Parity of investigation and analysis.--
(i) Diligence with respect to significant
vendors and affiliates.--Each investigation and
analysis of the suitability of a person with
respect to an application for a license under
this title, other than the applicant for such
license, shall be carried out with the same
degree of diligence as the investigation and
analysis of the suitability of the applicant.
(ii) Stringency with respect to casino
gaming facilities.--Each qualified body that
also issues licenses to casino gaming
facilities shall ensure that each investigation
and analysis of the suitability of a person
carried out by the qualified body under this
subsection is no less stringent than a
suitability review carried out by the qualified
body for the licensing of casino gaming
facilities.
(2) Suitability standards.--For purposes of this title, an
applicant and any other person subject to a determination of
suitability under paragraph (1) may only be considered suitable
under this title if the applicant or person demonstrates to the
applicable qualified body by clear and convincing evidence that
the applicant or person--
(A) is a person of good character, honesty, and
integrity;
(B) is a person whose prior activities, criminal
record, if any, reputation, habits, and associations do
not--
(i) pose a threat to the public interest or
to the effective regulation and control of
Internet gambling facilities; or
(ii) create or enhance the dangers of
unsuitable, unfair, or illegal practices,
methods, and activities in the conduct of
Internet gambling facilities or the carrying on
of the business and financial arrangements
incidental to such facilities;
(C) is capable of and likely to conduct the
activities for which the applicant is licensed or
receives a certificate of suitability in accordance
with the provisions of this title, any regulations
prescribed under this title, and all other applicable
laws;
(D) in the case of an applicant, has or guarantees
acquisition of adequate business competence and
experience in the operation of casino gaming
facilities, Internet gambling facilities, or Internet
gambling facilities;
(E) in the case of an applicant, has or will obtain
sufficient financing for the nature of the proposed
operation and from a suitable source; and
(F) has disclosed to the qualified body all known
affiliations or relationships, whether direct or
indirect, with persons and assets of persons described
by section 114(b)(2).
(3) Unsuitable.--An applicant or any other person may not
be determined to be suitable under this subsection if the
applicant or such person--
(A) has failed to provide information and
documentation material to a determination of
suitability for licensing under paragraph (1);
(B) has supplied information which is untrue or
misleading as to a material fact pertaining to any such
determination;
(C) has been convicted of an offense that is
punishable by imprisonment of more than 1 year;
(D) is delinquent in the payment of any applicable
Federal or State tax, tax penalty, addition to tax, or
interest owed to a jurisdiction in which the applicant
or person operates or does business, unless such
payment has been extended or is the subject of a
pending judicial or administrative dispute;
(E) has not certified in writing, pursuant to
subsection (c)(2)(G), that the person submits to
personal jurisdiction in the United States;
(F) knowingly accepts or knowingly has accepted
bets or wagers on sporting events from persons located
in the United States in violation of a provision of
Federal or State law;
(G) has affiliated with any person that knowingly
accepts or knowingly has accepted bets or wagers on
sporting events from persons located in the United
States in violation of a provision of Federal or State
law; or
(H) fails to comply with such other standard as the
applicable qualified body considers appropriate.
(4) Ongoing requirement.--A licensee (and any other person
who is required to be determined to be suitable for licensing
in connection with such licensee) shall meet the standards
necessary to be suitable for licensing or to receive a
certificate of suitability, as the case may be, throughout the
term of the license.
(5) Certificate of suitability for significant vendors.--
(A) In general.--If a qualifying body determines
under paragraph (1) that a significant vendor of an
applicant is suitable under such paragraph, the
qualifying body shall issue a certificate to such
vendor that certifies the suitability of such vendor.
(B) Revocation of certificate.--A qualified body
that issues a certificate to a significant vendor under
subparagraph (A) shall revoke the certificate if at any
time the significant vendor no longer meets the
standards necessary for a determination of suitability.
(C) Reliance on certificate.--A qualified body may,
but need not, rely upon a certificate issued under
subparagraph (A) to a significant vendor with respect
to one application in the review of the same
significant vendor in other license applications.
(D) Certificates issued by other qualified
bodies.--A qualified body may, but need not, accept a
certificate issued to a significant vendor by another
qualified body as evidence of the suitability of the
significant vendor.
(6) Other vendors.--
(A) Notice.--A licensee shall promptly notify the
qualified body that issued the license to the licensee
of all persons that are not significant vendors that--
(i) direct, provide, or solicit customers
to or for the licensee's Internet gambling
facility, or materially assist in any of those
tasks, in return for a commission or other fee;
(ii) hold themselves out to the public as
offering bets or wagers on the licensee's
behalf;
(iii) offer bets or wagers under their own
names or brands but using and relying on the
licensee's Internet gambling facilities;
(iv) license trademarks, trade names,
service marks, or other similar intellectual
property to the licensee; or
(v) own a substantial interest in or
control a person described in clause (i), (ii),
(iii), or (iv).
(B) Suitability of other vendors and persons.--A
qualified body that reviews an application of an
applicant for a license or issues a license to a
licensee may, at the sole discretion of the qualified
body and on a case-by-case basis, require as a
condition of such license that a person meet
suitability requirements under paragraph (1) if the
person--
(i) is described in subparagraph (A) with
respect to the applicant or licensee;
(ii) provides services to an applicant or
licensee and the qualified body determines
that, with respect to such services, there is a
substantial risk of circumvention of the
suitability requirements applicable to
significant vendors; or
(iii) is associated with the applicant or
licensee or one of the significant vendors of
the applicant or licensee and the qualified
body determines such person may pose a threat
to the integrity of Internet gambling
facilities operated by the applicant or
licensee.
(C) Information.--A qualified body may require such
information from an applicant, licensee, significant
vendor or other person identified in this paragraph as
the qualified body considers necessary to carry out
this paragraph.
(7) Enforcement actions.--
(A) In general.--If the Secretary or the qualified
body that issued a license to a licensee finds that the
licensee, or any other person that is subject to a
required determination of suitability in connection
with such licensee, ceases to meet the suitability
requirements of this subsection at any time during the
tenure of the license, the Secretary or the qualified
body may take action to protect the public interest,
including, if the Secretary or qualified body considers
necessary, the suspension or termination of the
license.
(B) Imposition of conditions including removal of
parties.--Notwithstanding a determination under
subparagraph (A), the Secretary or the qualified body
that issued a license to a licensee may allow the
licensee to continue engaging in licensed activities by
imposing conditions on the person to which subparagraph
(A) is applicable under penalty of revocation or
suspension of a license or certificate of suitability,
including--
(i) the identification of any person
determined to be unsuitable; and
(ii) the establishment of appropriate
safeguards to ensure such person is excluded
from any management or involvement in operation
of the licensed activities.
(C) Special rule for enforcement of prohibition on
unlawful sports wagering.--If the Secretary or a
qualified body finds that a licensee is no longer
suitable under this subsection because such licensee
has accepted bets or wagers as described in paragraph
(3)(F) or has affiliated as described in paragraph
(3)(G), the Secretary or the qualified body, as the
case may be, shall revoke the license of such licensee
in addition to the imposition of such other penalties
as the Secretary or qualified body considers
appropriate under this title.
(8) Administrative provisions.--
(A) Background check and investigation.--Each
qualified body shall establish standards and procedures
for conducting background checks and investigations for
purposes of this subsection.
(B) Non-admissibility of statements for purposes of
defamation actions.--Any written or oral statement made
in the course of an official proceeding of the
Secretary or a qualified body, by any member thereof,
or any witness testifying under oath which is relevant
to the purpose of the proceeding and relates to the
review of an application for a license under this title
shall not be admissible in any Federal or State court
in a civil action to prove defamation.
(C) Preservation of privilege recognized under
other provisions of law.--Any privilege recognized
under any other provision of Federal, State, or tribal
law, including attorney-client, physician-patient, and
accountant-client privileges, shall not be waived or
lost because a document or communication otherwise
protected by the privilege is disclosed to the
Secretary or a qualified body under this title.
(D) Confidentiality.--
(i) Except as set forth in provision (ii)
of this subsection, any communication or
document, except information that is already
public, shall be treated as confidential and
may not be disclosed, in whole or part, by the
Secretary or a qualified body without a lawful
court order or as otherwise required by law, if
the communication or document is--
(I) required by the Secretary or
qualified body to be disclosed by the
applicant, licensee, or significant
vendor, including applications,
financial or earnings information, and
criminal records, whether of the
applicant or licensee or of any
affiliate, employee, officer, director
or significant vendor thereof, or of
any other third-party;
(II) prepared or obtained by an
agent or employee of the Secretary or
qualified body that contains
information described in clause (i); or
(III) submitted by the applicant,
licensee, or significant vendor in
connection with a pending application
or existing license.
(ii) Nothing in this subsection shall limit
the disclosure of information provided by an
applicant, licensee, or significant vendor to
the Secretary or qualified body to any official
of the United States, or to any State
regulatory or enforcement agency, requesting
such information for any authorized purpose
under Federal or State law, including but not
limited to the administration or enforcement of
Federal or State laws concerning internet
gambling, U.S. tax laws, consumer protection,
data protection, financial regulation, or for
the purposes of any civil or criminal
investigation.
(e) Assessments for Administrative Expenses.--
(1) User fees.--
(A) In general.--The cost of administering this
title with respect to each applicant, licensee, and
significant vendor, including the cost of any review or
examination of a licensee or its significant vendors to
ensure compliance with the terms of the license and
this title, shall be assessed by the qualified body
receiving an application or issuing a license against
the applicant, licensee, or significant vendor, as the
case may be, by written notice in an amount that the
qualified body determines is necessary to meet the
qualified body's expenses in carrying out such
administration, review, or examination.
(B) Expenses for review or examination.--Expenses
that are attributable to review or examination of a
particular applicant, licensee, or significant vendor
shall be assessed under subparagraph (A) against that
applicant, licensee, or significant vendor.
(C) Expenses for general administration.--Expenses
for general administration shall be assessed against
all licensees equally.
(D) User fees established by secretary.--
(i) In general.--The Secretary may
establish user fees to be paid by applicants,
licensees, and significant vendors in amounts
the Secretary determines necessary to meet the
Secretary's cost of administering this title.
(ii) Collection by qualified bodies.--
Qualified bodies shall collect user fees
established under clause (i) from applicants,
licensees, and significant vendors and turn
them over promptly to the Secretary.
(iii) Disposition of user fees.--Amounts
assessed by the Secretary as user fees under
clause (i) shall--
(I) be available to the Secretary
to cover expenses incurred by the
Secretary in carrying out the
provisions of this title; and
(II) not be construed to be
Government funds or appropriated
monies, or subject to apportionment for
the purposes of any other provision of
law.
(E) Disposition of user fees.--Except as provided
in subparagraph (D), amounts assessed by a qualified
body as user fees under this paragraph shall--
(i) be available to the qualified body to
cover expenses incurred by the qualified body
in carrying out the provisions of this title;
and
(ii) except in the case of the Office of
Internet Gambling Oversight established under
section 104, not be construed to be Government
funds or appropriated monies, or subject to
apportionment for the purposes of any other
provision of law.
(F) Collection.--If a licensee or significant
vendor fails to pay a user fee to a qualified body
under this paragraph after the assessment of the fee
has become final--
(i) the qualified body may recover the
amount assessed by action in a court of the
State or Indian tribe of the qualified body or
in the United States district court in the
State in which such qualified body is located,
along with any costs of collection and attorney
fees; and
(ii) such failure may be grounds for denial
of an application for a license under this
title or revocation of a license or certificate
of suitability under this title.
(G) Payment of significant vendor user fees by
applicants and licensees.--A user fee assessed against
a significant vendor may be paid by an applicant or
licensee on behalf of the significant vendor.
(2) Direct and exclusive obligation of licensee.--With
respect to a licensee, a user fee shall be the direct and
exclusive obligation of the licensee and may not be deducted
from amounts available as deposits to any person placing a bet
or wager with the licensee.
(f) Approval of License.--
(1) In general.--Except as provided in paragraph (2), a
qualified body may issue to an applicant a license under this
title for the operation of an Internet gambling facility if the
applicant meets the criteria established by the qualified body
under this title.
(2) Authority of secretary to revoke licenses.--
(A) In general.--Notwithstanding any license or
certificate of suitability issued by a qualified body,
the Secretary may suspend or revoke such license or
certificate if the Secretary has reason to believe that
the recipient does not meet the suitability
requirements established under subsection (d) or, as
applicable, any other requirement imposed on a licensee
under this title.
(B) No authority to overturn denials and
terminations.--The Secretary may not overturn a
decision by a qualified body (other than the Office of
Internet Gambling Oversight) to deny or to terminate a
license or to deny or revoke a certificate of
suitability.
(3) Conflicts between qualified bodies.--If a qualified
body denies a license, terminates a license, denies a
certificate of suitability, or revokes a certificate of
suitability to a person and within 1 year of such denial,
termination, or revocation another qualified body grants such
person a license or certificate of suitability, the Secretary
shall--
(A) commence a review of such license or
certificate of suitability; and
(B) not later than 90 days after such commencement,
determine whether to act under paragraph (2).
(4) Control defined.--In this subsection, the term
``control'', with respect to a person, means the possession,
directly or indirectly, of the power to direct or influence the
direction of the management or policies of the person, whether
through the ownership of voting securities, through a
management, executive officer, or board position, by
shareholders or similar agreement, or otherwise.
(g) Safeguards Required of Licensee.--
(1) In general.--No qualified body shall issue a license
under this title unless the qualified body--
(A) prescribes regulations that prohibit a person
from receiving or retaining a license under this title
unless the person maintains or requires mechanisms so
that the requirements described in paragraph (2) are
met with respect to the operation of an Internet
gambling facility; and
(B) reviews the applicant's ability to comply with
the requirements of this subsection, including by
testing the applicant's systems and software, or by
mandating such testing by an independent, qualified
entity.
(2) Safeguards.--The requirements described in this
paragraph are as follows:
(A) Prohibition on underage gaming.--Appropriate
safeguards to ensure, to a reasonable degree of
certainty, that the individual placing a bet or wager
is not younger than 21 years of age, at the time of
registration and all log ons.
(B) Prohibited locations.--Appropriate safeguards
to ensure, to a reasonable degree of certainty, that
the individual placing a bet or wager is physically
located in a jurisdiction that has opted in under
section 108 at the time the bet or wager is placed, at
the time of registration and all log ons.
(C) Collection or reporting of customer taxes.--
Appropriate mechanisms to ensure, to a reasonable
degree of certainty, that all taxes relating to
Internet gambling from persons engaged in bets or
wagers relating to such Internet gambling are collected
or reported, as required by law, at the time of any
payment of proceeds of such bets or wagers.
(D) Collection or reporting of taxes of licensee.--
Appropriate mechanisms to ensure that all taxes
relating to the operation of an Internet gambling
facility from any licensee are collected as required by
law and that adequate records to enable later audit or
verification are maintained.
(E) Reporting of fees of licensee.--Appropriate
mechanisms to ensure that adequate records are
maintained to enable later audit or verification that
the licensee has paid all fees required under this
title.
(F) Safeguards against financial crime.--
Appropriate safeguards to prevent, to a reasonable
degree of certainty, fraud, money laundering, tax
evasion, and terrorist financing.
(G) Safeguards against compulsive play.--
Appropriate safeguards to ensure, to a reasonable
degree of certainty, compliance with the requirements
of section 107(b).
(H) Privacy safeguards.--Appropriate safeguards to
protect, to a reasonable degree of certainty, the
privacy and Internet security of any person engaged in
bets or wagers with the licensee's Internet gambling
facility.
(I) Payment of assessments.--Appropriate mechanisms
to ensure that any user fee required under subsection
(e) is paid to the qualified body.
(J) Honest games.--Appropriate safeguards to
ensure, to a reasonable degree of certainty, that
Internet gambling games are fair and honest, and to
prevent, to a reasonable degree of certainty, cheating,
including collusion, and use of cheating devices,
including use of software programs (sometimes referred
to as ``bots'') that make bets or wagers according to
algorithms.
(K) Segregation of player funds.--Appropriate
safeguards to ensure player funds are held in accounts
segregated from the funds of licensees and are
otherwise protected from corporate insolvency,
financial risk, or criminal or civil actions against
the licensee.
(L) Other requirements.--Such other mechanisms and
safeguards as the qualified body may establish by
regulation.
(h) Location of Remote Gaming Equipment.--
(1) Within the united states.--A licensee shall maintain
its remote gaming equipment within the territory of the United
States throughout the term of its license.
(2) Within territory of qualified body.--A qualified body
may require a licensee of the qualified body to locate the
remote gaming equipment of the licensee within the territory of
the State or Indian tribe of the qualified body if the
qualified body determines that such requirement will advance
the regulatory interests of this title.
(i) License Is a Privilege Not a Right.--
(1) In general.--A decision by a qualified body not to
grant a person a license or certificate of suitability, or to
terminate a license or revoke a certificate of suitability, is
not reviewable under the law of any jurisdiction other than the
jurisdiction of the qualified body.
(2) Appeal.--With respect to a decision described in
paragraph (1) of a qualified body, the State or Indian tribe of
the jurisdiction of the qualified body may, but need not,
provide an opportunity to appeal such decision.
(j) Term, Renewal, and Transfer of License.--
(1) Term.--Any license issued under this title shall be
issued for a 5-year term beginning on the date of issuance.
(2) Renewal.--A license may be renewed in accordance with
requirements prescribed by the qualified body that issued the
license under this title.
(3) Transfer.--A transfer of a license, change of control
of a licensee, or change in significant vendor shall require
prior approval by the qualified body that issued the license.
The qualified body shall at a minimum ensure the suitability
requirements of subsection (d) continue to be satisfied before
approving any such transfer or change.
(k) Administrative Provisions.--
(1) Determination of internet gambling.--
(A) Initial determination by qualified body.--A
determination whether a game, hand, tournament, or
other contest of a licensee is authorized Internet
gambling under this Act, and not prohibited sports-
related Internet gambling, shall be made in the first
instance by the qualified body that issued the license
to such licensee under this title.
(B) Challenges.--
(i) In general.--A licensee or qualified
body may challenge whether a game, hand,
tournament, or other contest of another
licensee is sports-related Internet gambling.
(ii) Challenge made with secretary.--A
challenge made under clause (i) shall be made
with the Secretary.
(iii) Determination made by secretary
within 30 days.--If a challenge is made under
clause (i), the Secretary shall make a
determination whether the game, hand,
tournament, or other contest is sports-related
Internet gambling not later than 30 days after
the date on which the challenge is made.
(iv) Operation until determination.--A
licensee that offers a game, hand, tournament,
or other contest that is challenged under
clause (i) may continue to offer such game,
hand, tournament, or other contest until the
Secretary makes a determination under clause
(iii).
(C) Appeals.--
(i) In general.--Not later than 30 days
after the date on which the Secretary makes a
determination under subparagraph (B)(iii), a
licensee or a qualified body may appeal such
determination under chapter 7 of title 5,
United States Code.
(ii) Operation pending appeal.--During the
period in which a game, hand, tournament, or
other contest is being challenged through an
appeal under clause (i), the United States
District Court for the District of Columbia may
allow a licensee to continue offering the game,
hand, tournament, or other contest in full
compliance with the terms of its existing
license and any other conditions the court
considers necessary, if the court determines
that--
(I) the licensee has a reasonable
likelihood of success on the merits;
and
(II) allowing the licensee to
continue offering the challenged game,
hand, tournament, or other contest
while the appeal is pending will not
threaten the public interest.
(2) Challenges under state law.--Except as provided in
paragraph (1) and unless otherwise specifically provided in
this title, actions taken by a qualified body other than the
Office of Internet Gambling Oversight may be challenged by
applicants and licensees only as permitted under the law of the
State or Indian tribe in which the qualified body is located.
(3) Summons.--
(A) In general.--The Secretary may issue a summons
with respect to an applicant or licensee necessary to
carry out the provisions of this title.
(B) Production at designated site.--A summons
issued by the Secretary pursuant to this paragraph may
require that books, papers, records, or other data
stored or maintained at any place be produced at any--
(i) business location of a licensee or
applicant for a license;
(ii) designated location in the State or
Indian lands of the applicable qualified body;
or
(iii) designated location in the District
of Columbia.
(C) No liability for expenses.--The Secretary shall
not be liable for any expense incurred in connection
with the production of books, papers, records, or other
data under this paragraph.
(D) Service of summons.--Service of a summons
issued under this subsection may be by registered mail
or in such other manner calculated to give actual
notice as determined by the Secretary.
(E) Authorization to invoke aid of courts.--The
Secretary may invoke the aid of any court of the United
States to compel compliance with the summons within the
jurisdiction of which--
(i) the investigation which gave rise to
the summons or the examination is being or has
been carried on;
(ii) the person summoned is an inhabitant;
or
(iii) the person summoned carries on
business or may be found.
(F) Power of courts to compel appearance.--The
court may issue an order requiring the person summoned
to appear before the Secretary--
(i) to produce books, papers, records, and
other data;
(ii) to give testimony as may be necessary
to explain how such material was compiled and
maintained;
(iii) to allow the Secretary to examine the
business of a licensee; and
(iv) to pay the costs of the proceeding.
(G) Contumacy or refusal.--Any failure to obey the
order of the court under this paragraph may be punished
by the court as a contempt thereof. All process in any
case under this subsection may be served in any
judicial district in which such person may be found.
(l) Disciplinary Action.--
(1) In general.--A licensee may be subject to disciplinary
action, including the imposition of civil penalties or
suspension or revocation of its license, by a qualified body
that issued a license to the licensee or by the Secretary if
the licensee fails to comply with any provision of this title,
any regulation prescribed thereunder, or any other applicable
provision of State or tribal law.
(2) Initiating agency.--Only the Secretary or the qualified
body which granted the license to a licensee may initiate
disciplinary action under this title against the licensee.
(3) Savings provision.--Nothing in this subsection shall be
construed to limit or alter the application of any law other
than this title to a licensee or affiliated person, or to
effect the enforcement of such law by the appropriate law
enforcement administrative, or regulatory entity.
(4) Disciplinary procedures.--
(A) In general.--A qualified body shall commence
disciplinary action under this subsection against a
licensee upon service of a formal written complaint
upon the licensee, with a copy forwarded to the
Secretary, that sets forth the grounds for the
disciplinary action and the proposed penalty that is
being sought, which may include any or all of the
imposition of a fine as provided pursuant to subsection
(m)(1) or limitation, condition, suspension or
revocation of the license.
(B) In accordance with law of jurisdiction of
qualified body.--The process for disciplinary action
under this subsection shall proceed according to the
law of the jurisdiction of the applicable qualified
body.
(5) Finality of action and appeals.--
(A) Finality.--Any disciplinary action under this
subsection shall be treated as a final action.
(B) Action by qualified bodies.--A licensee
aggrieved by disciplinary action under this subsection
by a qualified body may file an appeal in the
jurisdiction where the qualified body taking such
action is located only to the extent permitted by the
law of such jurisdiction, or in Federal court as
authorized by Federal law.
(6) Pending appeal.--During the period in which a
suspension or revocation of an existing license is being
challenged through a pending judicial proceeding, the court
handling the challenge may allow the licensee to continue
offering bets and wagers in full compliance with the terms of
its existing license and any other conditions the court
considers necessary, if the court determines that--
(A) the appellant has a reasonable likelihood of
success on the merits; and
(B) allowing the appellant to continue offering
bets and wagers while the appeal is pending will not
threaten the public interest.
(7) Return of customer funds.--If a licensee's license is
revoked and no appeal pursuant to paragraph (5) is pending, the
licensee shall--
(A) to the degree feasible, return all customer
funds to United States customers in an orderly manner
not later than 30 days after the date of the revocation
of the license; and
(B) place in escrow those sums return of which to
United States customers is not feasible due to change
in customer address, bank details, or similar
difficulty in an account with a financial institution
in the United States for safekeeping and orderly
disposition by the Secretary.
(8) Referral to attorney general.--If, in the course of
carrying out the provisions of this title, the Secretary or a
qualified body finds a substantial basis to believe that a
person has violated section 103(a), the Secretary or qualified
body shall refer such matter to the Attorney General.
(m) Civil Monetary Penalties.--
(1) In general.--
(A) Penalties assessed by qualified bodies.--A
qualified body may assess upon any licensee or other
person subject to the requirements of this title for
each violation of this title or any regulation
prescribed or order issued under this title, a civil
penalty of not more than the greater of--
(i) the amount involved in the violation,
if any;
(ii) $250,000 for an individual and
$750,000 for a corporation; or
(iii) such other amount as provided under
the applicable State or tribal law of the
qualified body.
(B) Penalties assessed by secretary.--The Secretary
may assess upon any licensee or other person subject to
the requirements of this title for each violation of
this title or any regulation prescribed or order issued
under this title, a civil penalty of not more than the
greater of--
(i) the amount involved in the violation,
if any; or
(ii) $250,000 for an individual and
$750,000 for a corporation.
(C) Not cumulative.--
(i) In general.--The penalties authorized
under subparagraphs (A) and (B) shall not be
cumulative and only one such penalty may be
assessed per violation.
(ii) Construction.--Clause (i) shall not be
construed to limit the authority of a
qualifying body or the Secretary, as the case
may be, to pursue a civil penalty for each
violation of a related series of violations.
(D) Failure to obtain a license.--Notwithstanding
any other provision of law, the Secretary shall assess
upon a person that is required to maintain a license
under this title, but fails to maintain a license under
this title, a civil penalty of not more than the
greater of--
(i) the amount of bets or wagers taken by
the person from players in the United States
during the period that a license was needed but
not held by the person; or
(ii) $1,000,000 per day that the person
accepts bets or wagers from players in the
United States during the period that a license
was needed but not held by the person.
(E) Construction.--Nothing in this paragraph shall
be construed to affect the ability of a law enforcement
official to seek criminal penalties against a person.
(2) Assessment.--
(A) Enforcement by qualified bodies.--Qualified
bodies and such other entities as are authorized by
applicable State or tribal law shall enforce the
provisions of this title under the law of the
applicable State or Indian tribe, and penalties shall
be determined, reviewable, collectable, and disposed of
as provided under such law.
(B) Enforcement by secretary.--
(i) Written notice.--Any penalty imposed
under paragraph (1)(B) shall be assessed and
collected by the Secretary by written notice.
(ii) Finality of assessment.--If, with
respect to any assessment under paragraph
(1)(B), a hearing is not requested pursuant to
clause (v) within the period of time allowed
under such clause, the assessment shall
constitute a final agency order.
(iii) Authority to modify or remit
penalty.--The Secretary may compromise, modify,
or remit any penalty which the Secretary may
assess or has already assessed under paragraph
(1)(B).
(iv) Mitigating factors.--In determining
the amount of any penalty imposed under
paragraph (1)(B), the Secretary shall take into
account the appropriateness of the penalty with
respect to the following:
(I) The size of the financial
resources and the good faith of the
person against whom the penalty is
assessed.
(II) The gravity of the violation.
(III) The history of previous
violations.
(IV) Such other matters as justice
may require.
(v) Hearing.--The person against whom any
penalty is assessed under paragraph (1)(B)
shall be afforded a hearing by the Secretary if
such person submits to the Secretary a request
for such hearing not later than 20 days after
the date of the issuance of the notice of
assessment.
(vi) Collection.--
(I) Referral.--If any person fails
to pay an assessment after any penalty
assessed under this subparagraph has
become final, the Secretary shall
recover the amount assessed by action
in the appropriate United States
district court.
(II) Scope of review.--In any civil
action under subclause (I), the
validity and appropriateness of the
penalty shall be subject to review for
abuse of agency discretion.
(vii) Disbursement.--All penalties
collected under authority of paragraph (1)(B)
shall be deposited into the Treasury of the
United States.
(3) Condition for licensure.--Payment by a licensee of any
civil penalty assessed under this subsection that has become
final shall be a requirement for the retention of its license.
(n) List of Licensed Internet Gambling Facilities.--The Secretary
shall establish and maintain a list of all Internet gambling facilities
licensed under this section. The Secretary shall update such list
regularly and make such list publicly available on an Internet website.
SEC. 107. COMPULSIVE GAMING, RESPONSIBLE GAMING, AND SELF-EXCLUSION
PROGRAM REQUIREMENTS.
(a) Regulations Required.--
(1) In general.--Each qualified body shall, before issuing
any licenses under this title, prescribe regulations for the
development of a Compulsive Gaming, Responsible Gaming, and
Self-Exclusion Program that each licensee of that qualified
body shall implement as a condition of licensure.
(2) Outreach.--The regulations required by paragraph (1)
shall also provide for the establishment of a program to alert
the public to the existence, consequences, and availability of
the self-exclusion list established under subsection (c).
(b) Minimum Requirements.--Under each program under subsection (a),
a licensee shall, under the scope of the license issued the licensee
under this title, at a minimum--
(1) provide informational materials written in plain
language about responsible gaming, including information about
the self-exclusion list established under subsection (c) and
how a player may request placement on the list, each time a
player signs in to make a bet or wager, which materials shall
be provided via a prominently displayed hyperlink or comparable
mechanism;
(2) provide informational materials about responsible
gaming to any player that requests such materials;
(3) make continuously available individualized responsible
gaming options that any customer may choose, including allowing
customers to self-limit deposits amounts, frequency of play,
and losses, as well as their access to the issuance of credit,
check cashing, or direct mail marketing by the licensee, in
each case as and to the extent that the qualified body may
consider appropriate;
(4) ensure to a reasonable degree of certainty that persons
on the list of self-excluded persons established pursuant to
subsection (c) are prevented from initiating any bets or wagers
within the scope of this title; and
(5) ensure that the information required under this
subsection is clearly and prominently made available by the
licensee in each language in which services of the Internet
gambling facility of the licensee are offered.
(c) List of Persons Self-Excluded.--
(1) Establishment.--
(A) Lists maintained by qualified bodies.--
(i) In general.--Each qualified body shall
establish and maintain a list of persons self-
excluded from playing Internet gambling through
Internet gambling facilities licensed by the
qualified body.
(ii) Submittal to secretary.--At the end of
each day, each qualified body shall submit to
the Secretary a current copy of the list
established and maintained by the qualified
body under clause (i).
(B) Master list maintained by secretary.--
(i) In general.--The Secretary shall
establish and maintain a master list of all
persons self-excluded from playing Internet
gambling through Internet gambling facilities
licensed under this title. Such list shall
consist of all persons submitted under
subparagraph (A)(ii).
(ii) Availability.--The Secretary shall
make the master list established and maintained
under clause (i) available to all qualified
bodies and licensees on an ongoing basis and
licensees shall ensure to a reasonable degree
of certainty that persons on the master list of
self-excluded persons are prevented from
initiating any bets or wagers within the scope
of this title.
(iii) Sharing of information.--(I)
Notwithstanding any other provision of law,
qualified bodies and licensees may share
information relating to persons on the master
list among one another and with other
regulators, whether Federal, State, tribal,
local, or foreign, for the purpose of
facilitating the prevention of self-excluded
persons from initiating any bets or wagers
within the scope of this title.
(II) The Secretary shall establish
appropriate safeguards for the purpose of
protecting the confidentiality of any personal
information shared pursuant to this clause, to
prevent the disclosure of such information to
unauthorized persons or for any purpose other
than facilitating the prevention of self-
excluded persons from initiating any bets or
wagers within the scope of this title.
(C) Placement request.--Any person may request
placement on the list of self- excluded persons by--
(i) acknowledging in a manner to be
established by each qualified body with respect
to its licensees that the person wishes to be
denied gaming privileges within the scope of
this title; and
(ii) agreeing that, during any period of
voluntary exclusion, the person may not
participate in Internet gambling or collect any
winnings or recover any losses resulting from
any gaming activity at any Internet gambling
facility of a licensee.
(2) Limitation on liability.--
(A) In general.--Except as provided in subparagraph
(B), the United States, the Secretary, a qualified
body, the State or Indian tribe in which that qualified
body is located, an enforcement agent, licensee, or any
employee or agent thereof, shall not be liable to any
self-excluded person or to any other party in any
judicial or administrative proceeding for any harm,
monetary or otherwise, which may arise as a result of--
(i) any failure to withhold gaming
privileges from, or to restore gaming
privileges to, a self-excluded person;
(ii) otherwise permitting a self-excluded
person to engage in gaming activity while on
the list of self-excluded persons; or
(iii) disclosure to licensees, significant
vendors, or employees or agents of licensees or
significant vendors of the fact that an
individual has been placed on the list of self-
excluded persons and of other information that
is reasonably necessary to identify that
individual in order to carry out this
subsection, including the address, date of
birth, and taxpayer identification number of
the individual.
(B) Licensees.--A licensee or employee or agent
thereof may be liable to a self- excluded person in a
judicial or administrative proceeding for a harm
described in subparagraph (A) to the extent provided
under the law of the State or Indian tribe of the
qualified body that issued the license.
(C) Rule of construction.--Nothing in this
paragraph shall be construed to prevent the Secretary
or a qualified body from assessing a regulatory
sanction against a licensee or person for failing to
comply with a provision of this section or a regulation
prescribed thereunder or for misuse of any list of
self-excluded persons for purposes not authorized under
this section.
(3) Disclosure provisions.--
(A) In general.--Notwithstanding any other
provision of Federal, State, or tribal law, the list of
self-excluded persons shall not be open to public
inspection.
(B) Affiliate disclosure.--If necessary to
effectuate the self-exclusion purposes of this
subsection, any licensee may disclose the identities of
persons on the self- excluded list to any significant
vendor, service provider, or affiliated company to the
extent that the significant vendor, service provider,
or affiliated company maintains such information under
confidentiality provisions comparable to those in this
subsection.
(d) Gaming by Prohibited Persons.--
(1) Prohibition on benefitting from prohibited gaming
activity.--A person who is prohibited from gaming with a
licensee by law, or by order of the Secretary, a qualified
body, or any court of competent jurisdiction, including any
person on the self-exclusion list under subsection (c), shall
not collect, in any manner or proceeding, any winnings or
recover any losses arising as a result of prohibited gaming
activity with a licensee.
(2) Forfeiture.--In addition to any other penalty provided
by law, any money or thing of value that has been obtained by,
or is owed to, any prohibited person by a licensee as a result
of bets or wagers made by a prohibited person while the
applicable prohibition is effective shall be subject to
forfeiture by order of the Secretary or a qualified body,
following notice to the prohibited person and opportunity to be
heard.
(3) Deposit of forfeited funds.--Any funds forfeited
pursuant to this subsection shall be deposited into the
Treasury of the United States, or, in the case of a forfeiture
to a qualified body, as provided by the applicable State or
tribal law.
(e) Administrative Provisions.--
(1) No duty to identify or exclude compulsive players not
on list.--No provision of this section shall be construed as
creating a legal duty in the Secretary, a qualified body, a
licensee, or any employee or agent thereof to identify or to
exclude compulsive players not on the list of self-excluded
persons.
(2) No cause of action.--The Secretary, a qualified body, a
licensee, and any employee or agent thereof, shall not be
liable to any person in any proceeding for losses or other
damages of any kind arising out of that person's gaming
activities based on a claim that the person was a compulsive,
problem, or pathological player.
(3) No private right of action.--Nothing in this section
shall be construed to create a private right of action.
SEC. 108. PROHIBITION ON USE OF LICENSES IN CERTAIN STATES AND INDIAN
LANDS.
(a) In General.--Internet gambling provided by Internet gambling
facilities licensed under this title shall be lawful in the United
States only with respect to the acceptance of bets or wagers from
individuals located in States and Indian lands that have opted-in under
this section.
(b) State Participation.--
(1) Opt-in election.--A State shall be considered to have
opted-in under this section if its Governor or any other person
authorized to make such notification under the laws of such
State has not notified the Secretary within 120 days of
enactment that--
(A) Internet gambling is prohibited in such State,
or
(B) the State declines to participate in Internet
gambling authorized under this Act.
(2) Opt-out election.--A State shall be considered not to
have opted-in under this section if--
(A) a majority of a quorum of each chamber of the
legislature of the State has approved a bill,
resolution, or similar measure that expresses that bets
or wagers authorized under this title should be
prohibited in such State; and
(B) such bill, resolution, or similar measure is
the most recent bill, resolution, or similar measure
approved by a majority of a quorum of each chamber of
the legislature of the State that expresses whether
bets or wagers authorized under this title should be
prohibited in such State.
(3) Limitation on state participation.--Notwithstanding any
other provision of law, for purposes of determining whether a
State has opted-in under this section, neither the Secretary
nor any provision of State law may require a State to undertake
any additional or different procedures than those specified in
paragraphs (1) and (2).
(4) Effective date of changes.--If a State changes its
election to participate or not to participate under paragraph
(1) or (2), such change shall apply, for purposes of this
title, beginning on the later of--
(A) 60 days after the date of the notification to
the Secretary by the Governor any other person
authorized under the laws of such State that the State
has changed its election to participate or not; or
(B) the effective date specified in any bill,
resolution, or similar measure determining the
participation of the State in Internet gambling under
the laws of such State.
(c) Indian Tribe Notice and Participation.--
(1) Opt-in election.--Except as provided in paragraphs (3)
and (4), an Indian tribe shall be considered to have opted-in
under this section if the principal chief or other chief
executive officer or designated authority of such Indian tribe
has not notified the Secretary within 120 days of enactment
that--
(A) Internet gambling is prohibited by such Indian
tribe, or
(B) the Indian tribe declines to participate in
Internet gambling authorized under this Act.
(2) Opt-out election.--Except as provided in paragraph (3)
and subsection (d), an Indian tribe shall be considered not to
have opted-in under this section if the principal chief or
other chief executive officer or designated authority of such
Indian tribe submits written notice to the Secretary that bets
or wagers otherwise authorized under this title should be
prohibited on the Indian lands of such Indian tribe.
(3) Subsequent change of election.--
(A) Notice of change.--Except as provided in
paragraph (4), in a case in which the principal chief
or other chief executive officer or designated
authority of an Indian tribe has submitted notice under
paragraph (1) or (2) to opt-in or opt-out,
respectively, such Indian tribe may change its election
at any time under this subsection if the principal
chief or other chief executive officer or designated
authority of such Indian tribe submits to the Secretary
a written notice indicating such change.
(B) Status.--An Indian tribe that submits notice
under subparagraph (A) shall be considered--
(i) to have opted-in under this section if
the most recent notice submitted under such
subparagraph indicates that bets or wagers
authorized under this title should not be
prohibited on the Indian lands of such Indian
tribe; and
(ii) not to have opted-in under this
section if such notice indicates that bets or
wagers authorized under this title should be
prohibited on the Indian lands of such Indian
tribe.
(C) Effective date.--A change in election under
this paragraph shall apply, for purposes of this title,
beginning on the later of--
(i) 60 days after the date the most recent
notice is submitted under subparagraph (A); or
(ii) the effective date specified in such
notice.
(4) Indian lands located in states that have opted-out.--
The decision of a State to opt-in or opt-out shall have no
effect on Internet gambling in the lands of an Indian tribe
located within a State, which shall be governed solely by
determinations made by the Indian tribe, as communicated to the
Secretary by the principal chief or other chief executive
officer or designated authority of an Indian tribe.
(d) Prohibition on Unlicensed Bets or Wagers.--
(1) In general.--Except as expressly authorized in this
title, no State or Indian tribe may authorize or operate a
facility that offers Internet gambling unless the Internet
gambling facility is authorized and licensed by that State or
Indian tribe in compliance with the law of that State or Indian
tribe, as applicable, and solely provides services to
participants wholly within the boundaries of such State or the
Indian lands of such Indian tribe..
(2) Limitation.--The prohibition set out in paragraph (1)
shall not apply to any bet or wager authorized pursuant to a
State or tribal law enacted or authorized by a license issued
pursuant to this title.
(e) Notification and Enforcement of State and Indian Tribe
Prohibitions.--
(1) In general.--The Secretary shall notify qualified
bodies, all licensees, and applicants of all States and Indian
tribes that are considered to have opted-in under this section,
promptly upon receipt of any notice received under subsection
(b) or (c) and not fewer than 30 days before the effective date
of such notice.
(2) Violations.--It shall be a violation of this title for
any licensee to accept a bet or wager initiated or otherwise
made by a person who the licensee knows is located at the time
of placing such bet or wager within any State or on the Indian
lands of any Indian tribe which is not considered to have
opted-in under this section.
(3) State attorney general enforcement.--In any case in
which the attorney general of a State or any State or local law
enforcement agency, authorized by the attorney general of the
State or by State statute to prosecute violations of consumer
protection law, has reason to believe that an interest of the
residents of that State has been or is threatened or adversely
affected by a violation by a licensee under paragraph (2), the
State, or the State or local law enforcement agency, may bring
a civil action on behalf of the residents of that State or
jurisdiction in a district court of the United States located
therein--
(A) to enjoin that practice; or
(B) to enforce compliance with this section.
(4) Indian tribe enforcement.--In any case in which the
chief law enforcement officer of an Indian tribe or tribal law
enforcement agency, authorized by the chief law enforcement
officer of the Indian tribe or by tribal law to prosecute
violations of consumer protection law, has reason to believe
that an interest of the residents of the Indian lands within
the tribe's jurisdiction has been or is threatened or adversely
affected by a violation by a licensee under paragraph (2), the
Indian tribe, or the tribal law enforcement agency, may bring a
civil action on behalf of the residents of those Indian lands
in a district court of the United States located nearest to
those Indian lands--
(A) to enjoin that practice; or
(B) otherwise to enforce compliance with this
section.
(f) No Impact on Indian Gaming Regulatory Act.--
(1) In general.--No provision of this title or decision or
action taken by an Indian tribe or State pursuant thereto shall
have any effect on non-Internet gaming activities within the
scope of section 11 of the Indian Gaming Regulatory Act (25
U.S.C. 2710) or any successor provisions or on any Tribal-State
compacts or authorities pursuant thereto.
(2) Tribal status or category not affected.--Tribal
operation of Internet gambling facilities under this title
shall not be considered class II or class III gaming under such
section, and an Indian tribe's status, category, or class under
such section shall not impact its status or ability to offer
bets or wagers pursuant to this title.
(3) New negotiations not required.--
(A) Indian tribes.--The fact that an Indian tribe
is operating under a license issued under this title or
that a tribal regulatory body is acting as a qualified
body under this title shall not require an Indian tribe
to negotiate a new agreement, limitation, or other
provision of tribal-State compact, agreement, or other
understanding with respect to gaming or revenue-
sharing, with regard to any bet or wager occurring
pursuant to a license issued under this title.
(B) States.--The fact that a State has opted in
under this section or that a State regulatory body is
acting as a qualified body under this title shall not
require the State to negotiate a new agreement,
limitation, or other provision of tribal-State compact,
agreement, or other understanding with respect to
gaming or revenue-sharing, with regard to any bet or
wager occurring pursuant to a license issued under this
title.
(g) No Impact on Activities Carried Out Solely Within a State or
Within Tribal Lands.--No provision of this title shall have any effect
on Internet gaming activities that are authorized and licensed by that
State or Indian tribe (as the case may be) in compliance with the law
of that State or Indian tribe as of the date before the date of the
enactment of this Act, as applicable, and that solely provide services
to participants wholly within the boundaries of that State or the
Indian lands of that Indian tribe.
SEC. 109. PROHIBITION ON BETS OR WAGERS ON SPORTING EVENTS.
(a) In General.--No provision of this title shall be construed to
authorize any licensee to accept a bet or wager on any sporting event
in violation of any applicable provision of Federal or State law.
(b) Construction.--Nothing in this title shall be construed to
repeal or amend any provision of Federal or State law prohibiting,
restricting, or otherwise addressing bets or wagers on sporting events,
including provisions of Federal and State law that permit participation
in any fantasy or simulation sports games.
SEC. 110. PUBLIC INTERNET GAMBLING AND INTERNET GAMBLING PARLORS
PROHIBITED.
(a) In General.--It shall be considered a violation of this title
to operate a place of public accommodation, club (including a club or
association limited to dues-paying members or similar restricted
groups), or similar establishment in which computer terminals or
similar access devices are made available to be used principally for
the purpose of accessing Internet gambling facilities.
(b) Criminal Penalties.--Any person who violates subsection (a)
shall be fined under title 18, United States Code, imprisoned for not
more than 5 years, or both.
(c) Construction.--Nothing in this title shall be construed to
authorize or otherwise to permit the operation of places of public
accommodation, clubs (including clubs or associations limited to dues-
paying members or similar restricted groups) and similar establishments
that permit access to Internet gambling facilities.
(d) Relation to State, Local, and Tribal Law.--Places of public
accommodation, clubs, or similar establishments described in subsection
(c) shall be subject to all otherwise applicable State, local, and
tribal police, criminal, zoning, and other regulatory powers which are
not intended to be limited in any way by this title.
SEC. 111. SAFE HARBOR.
It shall be an affirmative defense to any prosecution or
enforcement action under any provision of Federal, State, or tribal law
that the activity forming the basis of such prosecution or enforcement
action is authorized under and has been carried out lawfully in
accordance with and under the terms of this title.
SEC. 112. CHEATING AND OTHER FRAUD.
(a) Cheating and Cheating Devices Prohibited.--
(1) Cheating prohibited.--No person initiating, receiving,
or otherwise making a bet or wager with a licensee, or sending,
receiving, or inviting information assisting with a bet or
wager with a licensee shall knowingly violate, attempt to
violate, or assist another in violating the rules of play
established by the licensee for the purpose of obtaining
prohibited or unfair advantage in any game authorized under
this title.
(2) Cheating devices.--Except as provided in paragraph (3),
no person initiating, receiving, or otherwise making a bet or
wager with a licensee, or sending, receiving, or inviting
information assisting with a bet or wager with a licensee shall
knowingly use, possess, or assist another in the use of, an
electronic, electrical, or mechanical device or software or
other program or tool which is designed, constructed, or
programmed specifically for use in obtaining an advantage in
any game authorized under this title, where such advantage is
prohibited or otherwise violates the rules of play established
by the licensee.
(3) Permissible uses.--It shall not be a violation of this
subsection for a licensee, its agents, a qualified body, or its
agents to use or possess a device described in the preceding
sentence if--
(A) such use or possession is solely for purposes
of testing an Internet gambling facility;
(B) such device is not used in live play involving
actual bets or wagers; and
(C) such device is registered with the qualified
body that issued the applicable license.
(4) Disclosure to public not required.--Notwithstanding any
other provision of law, a registration under paragraph (3)(C)
is not required to be made available to the public.
(b) Additional Offense.--
(1) In general.--Except as provided in paragraph (3), no
person initiating, receiving, or otherwise making a bet or
wager with a licensee, or sending, receiving, or inviting
information assisting with a bet or wager with a licensee,
shall knowingly use, possess, or assist another in the use of
any cheating device with intent to cheat or defraud any
licensee or other persons placing bets or wagers with such
licensee.
(2) Bots.--A software program that makes bets or wagers
according to an algorithm shall constitute a type of cheating
device under this subsection.
(3) Permissible uses.--It shall not be a violation of this
subsection for a licensee, its agents, a qualified body, or its
agent to use or possess a device described in paragraph (1) or
(2) if--
(A) such use or possession is solely for purposes
of testing an Internet gambling facility;
(B) such device is not used in live play involving
actual bets or wagers; and
(C) such device is registered with the qualified
body that issued the applicable license.
(4) Disclosure to public not required.--Notwithstanding any
other provision of law, a registration under paragraph (3)(C)
is not required to be made available to the public.
(c) Criminal Penalty.--Whoever violates subsection (a) or (b) shall
be fined under title 18, United States Code, imprisoned for not more
than 3 years, or both.
(d) Permanent Injunction.--Upon conviction of a person for
violation of this section, the court may enter a permanent injunction
enjoining such person from initiating, receiving, or otherwise making
bets or wagers or sending, receiving, or inviting information assisting
in the placing of bets or wagers.
(e) Report on Threats to Operation of Internet Gambling
Facilities.--
(1) In general.--Not later than 1 year after the date of
first issuance specified in section 114(a), the Director of the
National Institute of Standards and Technology shall submit to
Congress a report on threats to the integrity of Internet
gambling facilities operated by licensees.
(2) Elements.--The report required by paragraph (1) shall
include the following:
(A) Identification of threats to the integrity of
Internet gambling facilities operated by licensees.
(B) Identification of technologies that could be
used to hack computer networks, facilitate cheating, or
otherwise place consumers at risk of fraud or monetary
loss.
(C) An evaluation of steps taken by Internet
gambling facilities licensed under this title to
respond to the threats identified pursuant to
subparagraph (A).
(D) Recommendations for such measures as the
Director considers appropriate to deal with the threats
identified pursuant subparagraph (A).
SEC. 113. CONSTRUCTION AND RELATION TO OTHER LAW.
(a) No Impact on Existing Lawful Games.--
(1) In general.--If bets or wagers on certain games of
skill that are not Internet gambling are not regarded as
gambling or otherwise prohibited under all provisions of
Federal, applicable State, or tribal law--
(A) nothing in this title shall be construed to
require licensing under this title with respect to such
games; and
(B) fees paid to participate in such games shall
not be regarded as bets or wagers for purposes of this
title.
(2) Reliance.--Nothing in this title may be relied on as
support for the legality or permissibility of any games without
compliance with the licensing and other requirements of this
title.
(b) Preemption of State and Tribal Laws.--
(1) In general.--Except as otherwise expressly provided in
this title, the provisions of this title shall supersede any
provisions of the law of any State or Indian tribe expressly
relating to the permitting, prohibiting, licensing, or
regulating of Internet gambling facilities and the law of any
State or Indian tribe expressly relating to the authorization,
prohibiting, licensing, expansion, or regulation of gambling,
except to the extent such State or tribal laws are not
inconsistent with this title.
(2) Savings provision.--Nothing in this title may be
construed to limit the applicability or enforcement of any
State or tribal consumer protection law of general
applicability or preempt the applicability of State or tribal
trespass, contract, or tort law.
(c) Relation to Gambling Devices Transportation Act.--Equipment
used by a licensee or significant vendor in the furtherance of licensed
activities pursuant to this title (but not to the extent it is used for
other purposes) shall not be considered a gambling device within the
meaning of section 1 of the Act of January 2, 1951, prohibiting the
transportation of gambling devices in interstate and foreign commerce
(15 U.S.C. 1171).
(d) Exemptions From Subchapter Iv of Chapter 53 of Title 31, United
States Code.--Subchapter IV of chapter 53 of title 31, United States
Code, is amended by adding at the end the following:
``Sec. 5368. Inapplicability to certain gaming and wagers
``The provisions of this subchapter--
``(1) restricting acceptance of bets or wagers made by
individuals located in the United States or requiring the
blocking or other prevention of restricted transactions shall
not apply with respect to the placing, transmitting, or
receiving of interstate off-track wagers, as such term is
defined in section 3 of the Interstate horseracing Act of 1978
(15 U.S.C. 3002), that are permissible under such Act (15
U.S.C. 3001 et seq.), whether such off-track wager is made by
telephone, Internet, satellite, or other wire or wireless
communication facility, service, or medium; and
``(2) shall not apply to any bet or wager--
``(A) occurring pursuant to a license issued under
title I of the Internet Gambling Regulation,
Enforcement, and Consumer Protection Act of 2013,
subject to section 109 of that Act;
``(B) that is permissible under the Interstate
horseracing Act of 1978 (15 U.S.C. 3001 et seq.); or
``(C) is the purchase of a chance or opportunity to
win a lottery or other prize--
``(i) which opportunity to win is
predominantly subject to chance; and
``(ii) which is authorized by a State or
Indian tribe wholly within its borders.''.
(e) Inapplicability of Certain Provisions to Interstate Off-track
Wagers.--The provisions of this title requiring a license shall not
apply with respect to the placing, transmitting, or receiving of
interstate off-track wagers, as such term is defined in section 3 of
the Interstate horseracing Act of 1978 (15 U.S.C. 3002), that are
permissible under such Act (15 U.S.C. 3001 et seq.), whether such off-
track wager is made by telephone, Internet, satellite, or other wire or
wireless communication facility, service, or medium.
(f) Wire Act Amendments.--
(1) Definitions.--Section 1081 of title 18, United States
Code, is amended--
(A) by designating the five undesignated paragraphs
as paragraphs (1) through (5), respectively;
(B) in paragraph (2), as so designated by
subparagraph (A), by striking ``value.'' and inserting
``value, including any Internet gambling facility.'';
(C) by amending paragraph (5), as so designated by
subparagraph (A), to read as follows:
``(5) The term `communication facility' includes any
instrumentality, personnel, and services (including, the
receipt, forwarding, or delivery of communications) used in the
transmission of a writing, sign, picture, or sound of any kind
by aid of wire, cable, radio, or an electromagnetic,
photoelectronic, or photooptical system, or other like
connection (whether fixed or mobile) between the points of
origin and reception of such transmission.''; and
(D) by adding at the end the following:
``(6) The term `bet or wager' has the meaning given the
term in section 102 of the Internet Gambling Regulation,
Enforcement, and Consumer Protection Act of 2013.
``(7) The term `Internet' means the international computer
network of interoperable packet switched data networks.
``(8) The term `Internet gambling facility' has the same
meaning given the term in section 102 of the Internet Gambling
Regulation, Enforcement, and Consumer Protection Act of 2013.
``(9) The terms `financial transaction provider' and
`insured depository institution' have the meanings given those
terms in section 5362 of title 31, United States Code.
``(10) The term `gambling business' means a business of
betting or wagering.
``(11) The terms `own or control' and `owned or controlled'
include circumstances within the meaning of section 2(a)(2) of
the Bank Holding Company Act of 1956 (12 U.S.C. 1841(a)(2)).''.
(2) Modification of existing prohibition.--Section 1084 of
title 18, United States Code, is amended to read as follows:
``Sec. 1084. Transmission of wagering information; penalties
``(a) Offense.--Except as otherwise provided in this section or in
the Internet Gambling Regulation, Enforcement, and Consumer Protection
Act of 2013, it shall be unlawful for a person that is engaged in a
gambling business to knowingly use a communication facility for the
transmission in interstate or foreign commerce, within the special
maritime and territorial jurisdiction of the United States, or to or
from any place outside the jurisdiction of any country with respect to
any transmission to or from the United States, of--
``(1) bets or wagers;
``(2) information assisting in the placing of bets or
wagers; or
``(3) a communication, which entitles the recipient to
receive money or credit as a result of bets or wagers, or for
information assisting in the placing of bets or wagers.
``(b) Penalty.--Any person who violates subsection (a) shall be
fined under this title, imprisoned for not more than 5 years, or both.
``(c) Transmission in Interstate or Foreign Commerce.--Except as
otherwise provided in this section, the transmission of bets or wagers,
information assisting in the placing of bets or wagers, or a
communication which entitles the recipient to receive money or credit
as a result of bets or wagers, or for information assisting in the
placing of bets or wagers shall be considered a transmission in
interstate or foreign commerce subject to this section if such
transmission involved the use, in some part, of the Internet.
``(d) Rules of Construction.--Nothing in this section shall be
construed to--
``(1) prohibit--
``(A) the transmission of information assisting in
the placing of bets or wagers for use in news reporting
if such transmission does not solicit or provide
information for the purpose of facilitating or enabling
the placing or receipt of bets or wagers;
``(B) the interstate transmission of information
relating to a State-specific lottery between a State or
foreign country where such betting or wagering is
permitted under Federal, State, tribal, or local law
and an out-of-State data center for the purposes of
assisting in the operation of such State-specific
lottery; or
``(C) a qualifying intrastate lottery transaction
(as defined in section 102 of the Internet Gambling
Regulation, Enforcement, and Consumer Protection Act of
2013;
``(D) any authorized activity carried out in
connection with a license issued under the Internet
Gambling Regulation, Enforcement, and Consumer
Protection Act of 2013.
``(2) create immunity from criminal prosecution under any
laws of a State or tribe; or
``(3) authorize activity that is prohibited under chapter
178 of title 28.
``(e) Applicability.--This section shall not apply to any activity
that is permissible under the Interstate horseracing Act of 1978 (15
U.S.C. 3001 et seq.), or any activity that is permissible under title I
of the Internet Gambling Regulation, Enforcement, and Consumer
Protection Act of 2013.
``(f) Duty of Common Carrier.--
``(1) In general.--If a common carrier (as defined in
section 3 of the Communications Act of 1934 (47 U.S.C. 153)),
subject to the jurisdiction of the Federal Communications
Commission, is notified in writing by a Federal, State, tribal,
or local law enforcement agency, acting within the jurisdiction
of the law enforcement agency, that a communication facility
furnished by the common carrier is being used or will be used
by a subscriber of the common carrier for the purpose of
transmitting or receiving gambling information in interstate or
foreign commerce, within the special maritime and territorial
jurisdiction of the United States, or to or from any place
outside the jurisdiction of any country with respect to any
transmission to or from the United States in violation of
Federal, State, tribal, or local law, the common carrier shall
discontinue or refuse, the leasing, furnishing, or maintaining
of such facility, after reasonable notice to the subscriber.
``(2) Limitation on liability.--No damages, penalty, or
forfeiture, civil or criminal, shall be found against a common
carrier for any act done in compliance with any notice received
from a law enforcement agency.
``(3) Rule of construction.--Nothing in this subsection
shall be construed to prejudice the right of any person
affected to secure an appropriate determination, as otherwise
provided by law, in a Federal court or in a State, tribal, or
local tribunal or agency, that such facility should not be
discontinued or removed, or should be restored.
``(g) Exclusions.--This section, subchapter IV of chapter 53 of
title 31, and any other provision of Federal law that establishes
criminal penalties for any activity involved in placing, receiving or
otherwise transmitting a bet or wager shall not apply to any bet or
wager that--
``(1) is permissible under the Interstate horseracing Act
of 1978 (15 U.S.C. 3001 et seq.);
``(2) is an international off-track wager on horseracing,
or the combination of international horseracing pari-mutuel
wagering pools, that is lawful in the State or foreign
jurisdiction involved;
``(3) is permissible under the Prohibition of Internet
Gambling, Regulation, and Consumer Protection Act of 2013; or
``(4) is a qualifying intrastate lottery bet or wager as
defined in section 102 of the Act referred to in paragraph
(3).''.
(3) Authorization of civil enforcement.--
(A) In general.--Chapter 50 of title 18, United
States Code, is amended by adding at the end the
following:
``Sec. 1085. Civil remedies
``(a) Jurisdiction.--The district courts of the United States (in
addition to any other remedies under current law) shall have original
and exclusive jurisdiction to prevent and restrain violations of
section 1084 by issuing appropriate orders in accordance with this
section, regardless of whether a prosecution has been initiated under
section 1084.
``(b) Proceedings.--
``(1) Definition.--In this subsection, the term `account'
means--
``(A) the unpaid balance of money or its equivalent
received or held by an insured depository institution
in the usual course of business and for which it has
given or is obligated to give credit, either
conditionally or unconditionally, to an account,
including interest credited, or which is evidenced by
an instrument on which the depository institution is
primarily liable; and
``(B) money received or held by an insured
depository institution, or the credit given for money
or its equivalent received or held by the insured
depository institution in the usual course of business
for a special or specific purpose, regardless of the
legal relationships established thereby, including
escrow funds, funds held as security for securities
loaned by the depository institution, funds deposited
as advance payment on subscriptions to United States
Government securities, and funds held to meet its
acceptances.
``(2) Proceedings.--The United States may institute
proceedings under this section--
``(A) to obtain injunctive or declarative relief,
including a temporary restraining order and a
preliminary injunction, against any person (other than
a financial transaction provider, except as provided in
paragraph (3)) to prevent or restrain a violation or a
threatened violation of section 1084;
``(B) in the case of an insured depository
institution that is a financial transaction provider,
to--
``(i) restrain an account maintained at
such insured depository institution if such
account is--
``(I) owned or controlled by a
gambling business; and
``(II) includes proceeds of, or is
used to facilitate a violation of
section 1084; or
``(ii) seize funds in an account described
in clause (i) if such funds--
``(I) are owned or controlled by a
gambling business; and
``(II) constitute the proceeds of,
were derived from, or facilitated, a
violation of section 1084.
``(3) Financial transaction providers.--The limitation in
paragraph (2)(A) shall not apply if the financial transaction
provider is a gambling business, in which case, such financial
transaction provider shall be subject to the enforcement
provisions under paragraph (2).
``(4) Injunctive proceedings.--
``(A) In general.--The attorney general (or other
appropriate State official) of a State in which a
communication in violation of section 1084 allegedly
has been or will be initiated or received may institute
proceedings under this section to obtain injunctive or
declarative relief 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 subparagraph (A), the district
court may enter a temporary restraining order, a
preliminary injunction, an injunction, or declaratory
relief against any person (other than a financial
transaction provider) to prevent or restrain a
violation or threatened violation of section 1084, in
accordance with rule 65 of the Federal Rules of Civil
Procedure.
``(5) Enforcement authority.--Notwithstanding paragraphs
(2) and (4), for a communication in violation of section 1084
that allegedly has been or will be initiated or received on
Indian lands (as that term is defined in section 4 of the
Indian Gaming Regulatory Act (25 U.S.C. 2703))--
``(A) the United States shall have the enforcement
authority provided under paragraph (2);
``(B) the enforcement authorities specified in an
applicable Tribal-State compact negotiated under
section 11 of the Indian Gaming Regulatory Act (25
U.S.C. 2710) shall be carried out in accordance with
that compact; and
``(C) if there is no applicable Tribal-State
compact, an appropriate tribal official may institute
proceedings in the same manner as an attorney general
of a State.
``(6) Rule of construction.--Nothing in this subsection
shall be construed to alter, supersede, or otherwise affect the
application of the Indian Gaming Regulatory Act (25 U.S.C. 2701
et seq.).
``(7) Limitation on relief.--Notwithstanding paragraph (4),
no relief shall be granted under this section against a
financial transaction provider except as provided in paragraph
(3).
``(c) Limitation on Liability.--No damages, penalty, or forfeiture,
civil or criminal, shall be found against any person or entity for any
act done in compliance with any notice received from a law enforcement
agency.''.
(B) Clerical amendment.--The table of sections for
chapter 50 of title 18, United States Code, is amended
by inserting after the item relating to section 1084
the following:
``1085. Civil remedies.''.
(g) Systems Used in Support of Lawful Gambling.--
(1) In general.--This title, subchapter IV of chapter 53 of
title 31, United States Code, section 1084 of title 18, United
States Code, and any other provision of Federal law that
establishes criminal penalties for any activity involved in
placing, receiving, or otherwise transmitting a bet or wager,
information assisting in the placing of bets or wagers, or a
communication which entitles the recipient to receive money or
credit as a result of bets or wagers, shall not apply to gaming
devices, information, or communications, to the extent used to
support bets or wagers offered by a casino gaming facility
that--
(A) occur between participants who are located on
the premises of the same casino gaming facility; and
(B) are lawful in the State or on the Indian lands
in or on which the casino gaming facility is located.
(2) Definitions.--In this subsection:
(A) Casino gaming facility.--The term ``casino
gaming facility'' means any facility that provides
casino gaming on a riverboat, at a race track, or in
another facility, regardless of the number of gaming
devices in 1 physical location, pursuant to a duly
authorized license issued by a gaming regulatory
authority of a State of Indian tribe.
(B) Participants.--The term ``participants''
includes all persons who are party to the bet or wager,
including, in the case of banked games, the casino
gaming facility or operator itself.
(h) Preservation of Existing Lawful Gambling.--
(1) In general.--This title, subchapter IV of chapter 53 of
title 31, United States Code, section 1084 of title 18, United
States Code, and any other provision of Federal law that
establishes criminal penalties for any activity involved in
placing, receiving, or otherwise transmitting a bet or wager,
information assisting in the placing of bets or wagers, or a
communication which entitles the recipient to receive money or
credit as a result of bets or wagers, shall not apply to the
offering of a bet or wager or gambling game authorized,
licensed, and regulated by a State or Indian tribe on the day
before the date of enactment of this Act and otherwise lawful
activities in support of the offering of that bet or wager or
gambling game, or that is permissible under the Interstate
Horseracing Act of 1978 (15 U.S.C. 3001 et seq.); or that is
the purchase of a chance or opportunity to win a lottery or
other prize--
(A) which opportunity to win is predominantly
subject to chance; and
(B) which is authorized by a State or Indian tribe
wholly within its borders;
(2) Applicability.--Paragraph (1) shall not apply to--
(A) any expansion of or other change to any such
bet or wager or gambling game that otherwise would
violate any applicable provision of Federal law if a
change in State or tribal law is necessary in order to
permit such expansion or change;
(B) the offering of a bet or wager or gambling game
of the same type and character in a State or Indian
tribe in which that bet or wager or gambling game is
not permitted on the date of enactment of this Act; and
(C) qualifying intrastate lottery transactions.
(3) Casino gaming facility defined.--In this subsection,
the term ``casino gaming facility'' means any facility that
provides casino gaming on a riverboat, at a race track, or in
another facility, regardless of the number of gaming devices in
1 physical location, pursuant to a duly authorized license
issued by a gaming regulatory authority of a State of Indian
tribe.
SEC. 114. ORDERLY TRANSITION.
(a) Issuance of Initial Licenses.--
(1) In general.--Each qualified body designated under
section 105 before the date of first issuance specified in this
subsection, shall, to the extent practicable while meeting the
requirements and standards of this title, issue multiple
licenses under this title before such date in order to ensure a
robust and competitive market for consumers and to prevent the
first licensees from gaining an unfair competitive advantage.
(2) Effective date of initial licenses.--No license issued
under this title shall authorize a licensee to accept a bet or
wager under this title before the date of first issuance
specified in this subsection.
(3) Date of first issuance.--The date of first issuance
specified in this subsection is the date that is 270 days after
the date of the enactment of this Act.
(b) Orderly Cessation of Unlicensed Activity and Safekeeping of
Customer Funds.--
(1) In general.--Each person shall, with respect to an
Internet gambling facility not licensed under this Act and to
the extent applicable to the person--
(A) not later than 30 days after the date of the
enactment of this Act, cease offering, accepting, and
providing services with respect to bets or wagers from
individuals the person knows, or reasonably should
know, are located in the United States;
(B) provide to each individual located in the
United States who has outstanding sums on deposit with
such person notice to such individual that operations
will be ceasing pursuant to paragraph (1) with
instructions indicating the procedures the individual
should use to request the return of such sums--
(i) not later than 7 days after the date of
the enactment of this Act and not less
frequently than quarterly thereafter until such
sums have been returned, by e-mail;
(ii) not later than 30 days after the date
of the enactment of this Act and not less
frequently than semi-annually thereafter until
such sums have been returned, by mail; and
(iii) beginning not later than 14 days
after the date of the enactment of this Act and
ending on the date that such sums have been
returned, by promptly displaying notice each
time such individual signs into the Internet
gambling facility;
(C) promptly return all outstanding sums to
individuals located in the United States who have sums
on deposit with such person, upon the request of such
individuals;
(D) during the 2-year period beginning on the date
of the enactment of this Act, retain all outstanding
sums on deposit with such person that are owed to
individuals under subparagraph (C) the disposition of
which remains unresolved because of a lack of a request
by such individual under such subparagraph or other
reason; and
(E) on the date that is 2 years and 1 day after the
date of the enactment of this Act, place any remaining
sums on deposit with such person that are owed to
individuals under subparagraph (C) the disposition of
which remains unresolved in escrow with a financial
institution in the United States for safekeeping and
orderly disposition as the Secretary may direct.
(2) Applicability regardless of license application
status.--Paragraph (1) applies to any person who has operated
an Internet gambling facility not licensed under this Act
regardless of whether the person applies for a license or seeks
a certificate of suitability with respect to an application for
a license under this title.
(3) Criminal penalty.--Whoever violates paragraph (1) shall
be fined under title 18, United States Code, in an amount not
to exceed 3 times the amount of the funds subject to this
subsection or imprisoned under such title for not more than 2
years, or both.
(4) Regulations.--The Office of Internet Gambling Oversight
shall prescribe regulations to carry out this subsection.
(5) Judicial review.--An applicant may seek judicial review
of a determination under paragraph (1) or (2) only by the
United States district court for the District of Columbia in
accordance with chapter 7 of title 5, United States Code.
(c) No Effect on Existing Law.--Nothing in this section shall be
construed to repeal, to amend, or to affect the interpretation of any
provision of Federal or State law that was in effect before the date of
the enactment of this Act that--
(1) authorizes the provision of services relating to bets
or wagers by facilities authorized and licensed by that State
or Indian tribe in compliance with the law of that State or
Indian tribe, as applicable, and solely provides services to
participants wholly within the boundaries of such State or the
Indian lands of such Indian tribe;
(2) prohibits, restricts, or otherwise addresses bets or
wagers; or
(3) prohibits fraud, unfair or deceptive acts or practices,
or other criminal activity.
SEC. 115. ANNUAL REPORTS.
(a) Licensing and Regulation of Internet Gambling Facilities.--
(1) In general.--Not later than 1 year after the date of
first issuance specified in section 114(a) and not less
frequently than annually thereafter, the Secretary shall submit
to Congress a report on the licensing and regulation of
Internet gambling facilities under this title.
(2) Elements.--Each report submitted under paragraph (1)
shall include the following:
(A) A description of all notices received by the
Secretary under subsections (b) and (c) of section 108.
(B) The amount of assessments collected under
section 106(e) and, in cooperation with the Secretary
of the Treasury, an estimate of the amount of income
tax revenue that is attributable to the operation of
Internet gambling facilities during the period covered
by the report.
(C) A list of qualified bodies, the number of
licensees reviewed by the qualified bodies under this
title, and the outcomes of such reviews.
(D) A description of the efforts the Secretary has
undertaken to ensure that qualified bodies are properly
issuing licenses and regulating licensees under this
title.
(E) A detailed description of each type of game
offered by licensees and how each type is consistent
with the definition of ``poker'' under section 102.
(F) Such other information as the Secretary
considers appropriate.
(b) Consumer Protection.--
(1) In general.--Not later than 1 year after the date of
first issuance specified in section 114(a) and not less
frequently than annually thereafter, the Secretary shall submit
to the Committee on Banking, Housing and Urban Affairs of the
Senate and the Committee on Financial Services of the House of
Representatives a report on commercial and regulatory practices
carried out to protect consumers with respect to Internet
gambling, including the practices carried out pursuant to the
requirements of section 107 and the regulations prescribed
pursuant to such section.
(2) Elements.--Each report submitted under paragraph (1)
shall include the following:
(A) A detailed description of the efforts of each
qualifying body to protect consumers from unfair or
deceptive acts or practices, including deceptive
advertising and marketing to minors.
(B) A description of the practices that the
Secretary recommends qualifying bodies adopt to protect
consumers.
(C) Such recommendations as the Secretary may have
for legislative action as the Secretary considers
necessary to protect consumers with respect to Internet
gambling.
(D) Such other information as the Secretary
considers appropriate.
SEC. 116. INDEPENDENT TESTING OF LICENSED OPERATOR EQUIPMENT.
(a) Requirement.--The Secretary shall require independent testing
of hardware, software, communications equipment, and other necessary
devices for Internet gambling facilities to ensure the integrity,
accountability, and randomness of play and network security.
(b) Definition.--For purposes of this section, the term
``independent testing'' means testing conducted by a scientific
laboratory--
(1) that is accredited by an intentional accreditation body
approved by the Secretary;
(2) that is competent and qualified to scientifically test
and evaluate equipment, software, communications and
functionality relating to the operation of an Internet gambling
facility; and
(3) that is not be owned or controlled by an Internet
gambling facility, an electronic gaming equipment vendor,
manufacturer, or retailer, or an Internet gaming operator.
SEC. 117. INCLUSION OF AUTHORITY TO ADDRESS GAMBLING ADDICTION IN
SAMHSA AUTHORITIES.
Section 501(d) of the Public Health Service Act (42 U.S.C.
290aa(d)) is amended--
(1) by striking ``and'' at the end of paragraph (17);
(2) by striking the period at the end of paragraph (18) and
inserting ``; and''; and
(3) by adding at the end the following:
``(19) establish and implement programs for the
identification, prevention, and treatment of pathological and
other problem gambling.''.
SEC. 118. COMPILATION OF DATASETS ON PLAYER BEHAVIOR.
The Secretary shall compile and make available to the public, on
the Web site of the Department of the Treasury, datasets, with respect
to Internet gambling, on player behavior from customer tracking data
collected or generated by loyalty programs, player tracking software,
online gambling transactions, or any other information system. The
Secretary shall ensure that personally identifying information,
including player name, street address, and bank or credit information,
are automatically removed from the data. The data shall include
information on player characteristics including gender, age and region
of residence, player behavior including frequency of play, length of
play, speed of play, denomination of play, amounts wagered and, if
applicable, number of lines or hands played, and characteristics of
games played.
SEC. 119. EFFECTIVE DATE.
(a) In General.--Except as otherwise provided in this title, the
provisions of this title shall take effect on the date that is 30 days
after the date of the enactment of this Act.
(b) Regulations Required Before Issuing Licenses.--Notwithstanding
any other provision of this title, a qualified body may not issue a
license under this title until the qualified body has issued
regulations to meet its obligations as a qualified body.
TITLE II--ENFORCEMENT UNDER TITLES 18 AND 31, UNITED STATES CODE
SEC. 201. FINANCIAL SERVICE PROVIDERS.
Subchapter IV of chapter 53 of title 31, United States Code, is
amended--
(1) in section 5362--
(A) by redesignating paragraph (11) as paragraph
(12); and
(B) by inserting after paragraph (10) the
following:
``(11) List of licensed internet gambling facilities.--The
term `list of licensed Internet gambling facilities' means the
list established and maintained under section 106(n) of the
Internet Gambling Regulation, Enforcement, and Consumer
Protection Act of 2013.''; and
(2) in section 5364, by striking subsection (d) and
inserting the following:
``(d) Financial Transaction Providers.--
``(1) In general.--A financial transaction provider shall
prevent, prohibit, or suspend its service from completing
payment transactions involving customers within the United
States and a person or entity that is--
``(A) an Internet gambling facility not included on
the list of licensed Internet gambling facilities, or
that the financial transaction provider reasonably
believes is included on such list;
``(B) demonstrated to be, or that the financial
transaction provider reasonably believes to be, an
unlicensed Internet gambling enterprise, based on
information other than the list of licensed Internet
gambling facilities; or
``(C) acting on behalf of an Internet gambling
facility that is not included on the list of licensed
Internet gambling facilities, or that the financial
transaction provider reasonably believes is included on
such list, if the financial transaction provider has
knowledge that such person or entity is acting on
behalf of the unlicensed person or entity.
``(2) Safe harbor.--A financial transaction provider shall
not be held liable to any person--
``(A) for engaging in a financial activity or
transaction, including a payments processing activity,
in connection with a bet or wager that the provider
believes is permitted by the Internet Gambling
Regulation, Enforcement, and Consumer Protection Act of
2013 or the Internet horseracing Act of 1978 (15 U.S.C.
3001 et seq.), unless the financial transaction
provider has actual knowledge that the financial
activity or transaction was conducted in violation of
either such Act or any applicable provision of Federal
or State law; or
``(B) for taking any action pursuant to paragraph
(1).''.
SEC. 202. AMENDMENTS RELATING TO ILLEGAL GAMBLING BUSINESSES.
Section 1955(b)(1) of title 18, United States Code, is amended--
(1) in clause (i), by striking ``(i) is'' and inserting
``(A)(i) is'';
(2) in clause (iii), by striking the period at the end and
inserting ``; or''; and
(3) by adding at the end the following:
``(B) is an unlawful Internet gambling facility, as
defined in section 102 of the Internet Gambling
Regulation, Enforcement, and Consumer Protection Act of
2013.''.
SEC. 203. FURTHER AMENDMENTS TO SUBCHAPTER IV OF CHAPTER 53 OF TITLE
31, UNITED STATES CODE.
Section 5362(10) of title 31, United States Code, is amended--
(1) by striking subparagraphs (A) through (C) and inserting
the following:
``(A) In general.--The term `unlawful Internet
gambling' means to place, receive, or otherwise
knowingly transmit a bet or wager by or on behalf of a
person located in the United States by any means which
involves the use, at least in part, of the Internet,
unless such bet or wager is expressly permitted under
applicable Federal law.'';
(2) by redesignating subparagraph (D) as subparagraph (B);
(3) in subparagraph (B), as so redesignated, by striking
clause (iii); and
(4) by striking subparagraph (E) and inserting the
following:
``(C) Qualifying intrastate lottery transactions.--
The term `unlawful Internet gambling' does not include
the purchase of a chance or opportunity to win a
lottery or other prize that satisfies all of the
conditions and limitations set out in section 102(3)(B)
of the Internet Gambling Regulation, Enforcement, and
Consumer Protection Act of 2013.
``(D) Licensed internet gambling facilities.--The
term `unlawful Internet gambling' does not include an
activity carried out by an Internet gambling facility,
as such term is defined in section 102 of the Internet
Gambling Regulation, Enforcement, and Consumer
Protection Act of 2013, operated by a person under a
license provided under title I of that Act, in
accordance with the provisions of that title I.''.
SEC. 204. BETTOR FORFEITURE.
Section 981(a)(1) of title 18, United States Code, is amended by
adding at the end the following:
``(I) Any property, real or personal, involved in a
transaction or attempted transaction in violation of
section 103 of the Internet Gambling Regulation,
Enforcement, and Consumer Protection Act of 2013, or
any property traceable to such property.''.
SEC. 205. REGULATIONS.
(a) Regulations.--Not later than 180 days after the date of
enactment of this Act, the Secretary of the Treasury shall prescribe
such regulations as the Secretary of the Treasury considers necessary
to ensure compliance with the Bank Secrecy Act (12 U.S.C. 1951 et seq.;
31 U.S.C. 5311 et seq.), by licensees, significant vendors to such
licensees, and financial service providers to such licensees (as those
terms are defined in section 102).
(b) Revision of Regulations.--Not later than 180 days after the
date of enactment of this Act, the Secretary of the Treasury shall
revise part 233 of title 12, Code of Federal Regulations, and part 132
of title 31, Code of Federal Regulations, to conform with the
provisions of title I.
SEC. 206. CONFORMING AMENDMENT.
Section 310(b)(2)(I) of title 31, United States Code, is amended by
striking ``subchapter II'' and inserting ``subchapters II and IV''.
TITLE III--OTHER MATTERS
SEC. 301 SEVERABILITY.
If any provision of this Act is declared unconstitutional, or the
applicability thereof to any person or circumstances is held invalid,
the remainder of the Act shall remain in effect and will continue to
apply to other persons and circumstances.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Financial Services, and the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Financial Services, and the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Energy and Commerce, and in addition to the Committees on Financial Services, and the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Commerce, Manufacturing, and Trade.
Referred to the Subcommittee on Crime, Terrorism, Homeland Security, and Investigations.
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