7-11-06,
House Passed Bill 317-93
Referred to Senate
Calendar No. 519
109th CONGRESS
2d Session
H. R. 4411
IN THE SENATE OF THE UNITED STATES
July 13, 2006
Read the second time and placed on the calendar
AN ACT
To prevent the use of certain payment instruments, credit cards,
and fund transfers for unlawful Internet gambling, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title- This Act may be cited as the `Internet Gambling Prohibition
and Enforcement Act'.
(b) Table of Contents- The table of contents is as follows:
Sec. 1. Short title and table of contents.
TITLE I--MODERNIZATION OF THE WIRE ACT OF 1961
Sec. 102. Modification of existing prohibition.
Sec. 103. Authorization of civil enforcement.
Sec. 104. Authorization of appropriations.
Sec. 105. Rules of construction.
Sec. 106. Sense of Congress.
TITLE II--POLICIES AND PROCEDURES REQUIRED TO PREVENT PAYMENTS FOR UNLAWFUL
GAMBLING
Sec. 201. Policies and procedures required to prevent payments for unlawful
gambling.
Sec. 202. Technical and conforming amendment.
TITLE III--INTERNET GAMBLING IN OR THROUGH FOREIGN JURISDICTIONS
Sec. 301. Internet gambling in or through foreign jurisdictions.
TITLE I--MODERNIZATION OF THE WIRE ACT OF 1961
SEC. 101. DEFINITIONS.
Section 1081 of title 18, United States Code, is amended--
(1) by designating the five undesignated paragraphs that begin with `The
term' as paragraphs (1) through (5), respectively;
(2) by amending paragraph (5), as so designated, to read as follows:
`(5) The term `communication facility' means any and all instrumentalities,
personnel, and services (among other things, the receipt, forwarding,
or delivery of communications) used or useful in the transmission of writings,
signs, pictures, and sounds of all kinds 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
(3) by adding at the end the following:
`(6) The term `bets or wagers'--
`(A) means the staking or risking by any person of something of value
upon the outcome of a contest of others, a sporting event, or a game
predominantly subject to chance, upon an agreement or understanding
that the person or another person will receive something of value in
the event of a certain outcome;
`(B) includes the purchase of a chance or opportunity to win a lottery
or other prize (which opportunity to win is predominantly subject to
chance);
`(C) includes any scheme of a type described in section 3702 of title
28; and
`(i) any activity governed by the securities laws (as that term is
defined in section 3(a)(47) of the Securities Exchange Act of 1934)
for the purchase or sale of securities (as that term is defined in
section 3(a)(10) of that Act);
`(ii) any transaction conducted on or subject to the rules of a registered
entity or exempt board of trade under the Commodity Exchange Act;
`(iii) any over-the-counter derivative instrument;
`(iv) any other transaction that--
`(I) is excluded or exempt from regulation under the Commodity Exchange
Act; or
`(II) is exempt from State gaming or bucket shop laws under section
12(e) of the Commodity Exchange Act or section 28(a) of the Securities
Exchange Act of 1934;
`(v) any contract of indemnity or guarantee;
`(vi) any contract for insurance;
`(vii) any deposit or other transaction with an insured depository
institution;
`(viii) participation in any game or contest in which participants
do not stake or risk anything of value other than--
`(I) personal efforts of the participants in playing the game or
contest or obtaining access to the Internet; or
`(II) points or credits that the sponsor of the game or contest
provides to participants free of charge and that can be used or
redeemed only for participation in games or contests offered by
the sponsor; or
`(ix) participation in any fantasy or simulation sports game or educational
game or contest in which (if the game or contest involves a team or
teams) no fantasy or simulation sports team is based on the current
membership of an actual team that is a member of an amateur or professional
sports organization (as those terms are defined in section 3701 of
title 28) and that meets the following conditions:
`(I) All prizes and awards offered to winning participants are established
and made known to the participants in advance of the game or contest
and their value is not determined by the number of participants
or the amount of any fees paid by those participants.
`(II) All winning outcomes reflect the relative knowledge and skill
of the participants and are determined predominantly by accumulated
statistical results of the performance of individuals (athletes
in the case of sports events) in multiple real-world sporting or
other events.
`(III) No winning outcome is based--
`(aa) on the score, point-spread, or any performance or performances
of any single real-world team or any combination of such teams; or
`(bb) solely on any single performance of an individual athlete
in any single real-world sporting or other event.
`(7) The terms `credit', `creditor', `credit card', and `card issuer'
have the same meanings as in section 103 of the Truth in Lending Act.
`(8) The term `electronic fund transfer'--
`(A) has the same meaning as in section 903 of the Electronic Fund Transfer
Act, except that such term includes transfers that would otherwise be
excluded under section 903(6)(E) of that Act; and
`(B) includes any fund transfer covered by Article 4A of the Uniform
Commercial Code, as in effect in any State.
`(9) The term `financial institution' has the same meaning as in section
903 of the Electronic Fund Transfer Act, except that such term does not
include a casino, sports book, or other business at or through which bets
or wagers may be placed or received.
`(10) The term `financial transaction provider' has the same meaning as
in section 5361 of title 31 (as added by title II of this Act).
`(11) The term `foreign jurisdiction' means a jurisdiction of a foreign
country or political subdivision thereof.
`(12) The term `gambling business' means a business of betting or wagering.
`(13) The term `information assisting in the placing of bets or wagers'
means information knowingly transmitted by an individual in a gambling
business that enables or facilitates a bet or wager and does not include--
`(A) any posting or reporting of any educational information on how
to make a legal bet or wager or the nature of betting or wagering, as
long as such posting or reporting does not solicit or provide information
for the purpose of facilitating or enabling the placing or receipt of
bets or wagers in a jurisdiction where such betting is illegal; or
`(B) advertising relating to betting or wagering in a jurisdiction where
such betting or wagering is legal, as long as such advertising does
not solicit or provide information for the purpose of facilitating or
enabling the placing or receipt of bets or wagers in a jurisdiction
where such betting is illegal.
`(14) The term `insured depository institution'--
`(A) has the same meaning as in section 3 of the Federal Deposit Insurance
Act; and
`(B) includes an insured credit union (as defined in section 101 of
the Federal Credit Union Act).
`(15) The term `interactive computer service' has the same meaning as
in section 230(f) of the Communications Act of 1934.
`(16) The terms `money transmitting business' and `money transmitting
service' have the same meanings as in section 5330(d) (determined without
regard to any regulations prescribed by the Secretary thereunder).
`(17) The terms `own or control' and to be `owned or controlled' include
circumstances within the meaning of section 2(a)(2) of the Bank Holding
Company Act of 1956.
`(18) The term `person' includes a government (including any governmental
entity (as defined in section 3701(2) of title 28)).
`(19) The term `State' means a State of the United States, the District
of Columbia, or a commonwealth, territory, or possession of the United
States.
`(20) The term `tribe' or `tribal' means an Indian tribe, as defined under
section 4(5) of the Indian Gaming Regulatory Act of 1988).
`(21) For purposes of Section 1085(b), 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.'.
SEC. 102. MODIFICATION OF EXISTING PROHIBITION.
Section 1084 of title 18, United States Code, is amended to read as follows:
`Sec. 1084. Use of a communication facility to transmit bets or wagers;
criminal penalties
`(a) Except as otherwise provided in this section, whoever, being engaged
in a gambling business, knowingly--
`(1) uses 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 nation with respect to any transmission to or from the United States,
of--
`(B) information assisting in the placing of bets or wagers; or
`(C) 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; or
`(2) accepts, in connection with the transmission of a communication 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 nation with respect to any transmission to or from
the United States of bets or wagers or information assisting in the placing
of bets or wagers--
`(A) credit, or the proceeds of credit, extended to or on behalf of
another (including credit extended through the use of a credit card);
`(B) an electronic fund transfer or funds transmitted by or through
a money transmitting business, or the proceeds of an electronic fund
transfer or money transmitting service, from or on behalf of the other
person;
`(C) any check, draft, or similar instrument which is drawn by or on
behalf of the other person and is drawn on or payable through any financial
institution; or
`(D) the proceeds of any other form of financial transaction as the
Secretary of the Treasury and the Board of Governors of the Federal
Reserve System may prescribe by regulation which involves a financial
institution as a payor or financial intermediary on behalf of or for
the benefit of the other person,
shall be fined under this title or imprisoned not more than five years,
or both.
`(b) Nothing in this section prohibits--
`(1) 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 in a jurisdiction where such betting
is illegal;
`(2) the transmission of information assisting in the placing of bets
or wagers from a State or foreign country where such betting or wagering
is permitted under Federal, State, tribal, or local law into a State or
foreign country in which such betting on the same event is permitted under
Federal, State, tribal, or local law; or
`(3) 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.
`(c) Nothing in this section prohibits the use of a communication facility
for the transmission of bets or wagers or information assisting in the placing
of bets or wagers, if--
`(1) at the time the transmission occurs, the individual or entity placing
the bets or wagers or information assisting in the placing of bets or
wagers, the gambling business, and, subject to section 1084(b)(3), any
individual or entity acting in concert with a gambling business to process
the bets or wagers are physically located in the same State, and for class
II or class III gaming under the Indian Gaming Regulatory Act, are physically
located on Indian lands within that State;
`(2) the State or tribe has explicitly authorized such bets and wagers,
the State or tribal law requires a secure and effective location and age
verification system to assure compliance with age and location requirements,
and the gambling business and any individual or entity acting in concert
with a gambling business to process the bets or wagers complies with such
law;
`(3) the State has explicitly authorized and licensed the operation of
the gambling business and any individual or entity acting in concert with
a gambling business to process the bets and wagers within its borders
or the tribe has explicitly authorized and licensed the operation of the
gambling business and any individual or entity acting in concert with
a gambling business to process the bets and wagers, on Indian lands within
its jurisdiction;
`(4) with respect to class II or class III gaming, the game and gambling
business complies with the requirements of the Indian Gaming Regulatory
Act; and
`(5) with respect to class III gaming under the Indian Gaming Regulatory
Act, the game is authorized under, and is conducted in accordance with,
the respective Tribal-State compact of the Tribe having jurisdiction over
the Indian lands where the individual or entity placing the bets or wagers
or information assisting in the placing of bets or wagers, the gambling
business, and any individual or entity acting in concert with a gambling
business to process those bets or wagers are physically located, and such
Tribal-State compact expressly provides that the game may be conducted
using a communication facility to transmit bets or wagers or information
assisting in the placing of bets or wagers.
For purposes of this subsection, the intermediate routing of electronic
data constituting or containing all or part of a bet or wager, or all or
part of information assisting in the placing of bets or wagers, shall not
determine the location or locations in which a bet or wager is transmitted,
initiated, received or otherwise made; or from or to which a bet or wager,
or information assisting in the placing of bets or wagers, is transmitted.
`(d) Nothing in this section creates immunity from criminal prosecution
under any laws of any State or tribe.
`(e) Nothing in this section authorizes activity that is prohibited under
chapter 178 of title 28, United States Code.
`(f) When any common carrier, 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 its jurisdiction, that any
communication facility furnished by it is being used or will be used by
its subscriber 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 nation with respect to any transmission to or from the United States
in violation of Federal, State, tribal, or local law, it shall discontinue
or refuse, the leasing, furnishing, or maintaining of such facility, after
reasonable notice to the subscriber, but no damages, penalty or forfeiture,
civil or criminal, shall be found against any common carrier for any act
done in compliance with any notice received from a law enforcement agency.
Nothing in this section shall be deemed to prejudice the right of any person
affected thereby 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.'.
SEC. 103. AUTHORIZATION OF CIVIL ENFORCEMENT.
Chapter 50 of title 18, United States Code, is amended by adding at the
end the following new section:
`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.
`(1) The United States may institute proceedings under this section--
`(A) to obtain injunctive or declarative relief, including but not limited
to a temporary restraining order and a preliminary injunction, against
any person (other than a financial transaction provider) 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 subparagraph (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.
`(C) The limitation in subparagraph (A) shall not apply if the financial
transaction provider is a gambling business within the meaning of section
1081(12), in which case such financial transaction provider shall be
subject to the enforcement provisions under subparagraph (A).
`(2) 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. Upon application of the attorney
general (or other appropriate State official) of an affected State under
this paragraph, 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.
`(3) Notwithstanding paragraphs (1) and (2), 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)--
`(A) the United States shall have the enforcement authority provided
under paragraph (1);
`(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.
No provision of this section shall be construed as altering, superseding,
or otherwise affecting the application of the Indian Gaming Regulatory
Act.
`(4) Notwithstanding paragraph (3), no relief shall be granted under this
section against a financial transaction provider except as provided in
paragraph (1).
`(c) 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.
`(d) Relief granted under this section against an interactive computer service
(as defined in section 230(f) of the Communications Act of 1934) shall--
`(1) be limited to the removal of, or disabling of access to, an online
site violating section 1084, or a hypertext link to an online site violating
such section, that resides on a computer server that such service controls
or operates; except this limitation shall not apply if the service is
violating section 1084 or is in active concert with a person who is violating
section 1084 and receives actual notice of the relief;
`(2) be available only after notice to the interactive computer service
and an opportunity for the service to appear are provided;
`(3) not impose any obligation on an interactive computer service to monitor
its service or to affirmatively seek facts indicating activity violating
section 1084;
`(4) specify the interactive computer service to which it applies; and
`(5) specifically identify the location of the online site or hypertext
link to be removed or access to which is to be disabled.'.
SEC. 104. AUTHORIZATION OF APPROPRIATIONS.
In addition to any other sums authorized to be appropriated for this purpose,
there are authorized to be appropriated to the Department of Justice for
each of fiscal years 2007 through 2010 $10,000,000 for investigations and
prosecutions of violations of section 1084 of title 18, United States Code.
SEC. 105. RULES OF CONSTRUCTION.
(a) Nothing in this Act may be construed to prohibit any activity that is
allowed under Public Law 95-515 as amended (15 U.S.C. 3001 et seq.).
(b) Nothing in this Act may be construed to preempt State law prohibiting
gambling.
SEC. 106. SENSE OF CONGRESS.
It is the sense of Congress that this Act does not change which activities
related to horse racing may or may not be allowed under Federal law. Section
105 is intended to address concerns that this Act could have the effect
of changing the existing relationship between the Interstate Horseracing
Act (15 U.S.C. 3001 et seq.), and other Federal statutes that were in effect
at the time of this Act's consideration; this Act is not intended to change
that relationship; and this Act is not intended to resolve any existing
disagreements over how to interpret the relationship between the Interstate
Horseracing Act and other Federal statutes.
TITLE II--POLICIES AND PROCEDURES REQUIRED TO PREVENT PAYMENTS FOR UNLAWFUL
GAMBLING
SEC. 201. POLICIES AND PROCEDURES REQUIRED TO PREVENT PAYMENTS FOR UNLAWFUL
GAMBLING.
Chapter 53 of title 31, United States Code, is amended by adding at the
end the following new subchapter:
`SUBCHAPTER IV--POLICIES AND PROCEDURES REQUIRED TO PREVENT PAYMENTS FOR
UNLAWFUL GAMBLING
`Sec. 5361. Definitions
`For purposes of this subchapter, the following definitions shall apply:
`(1) CREDIT; CREDITOR; CREDIT CARD; AND CARD ISSUER- The terms `credit',
`creditor', `credit card', and `card issuer' have the same meanings as
in section 103 of the Truth in Lending Act.
`(2) DESIGNATED PAYMENT SYSTEM- The term `designated payment system' means
any system utilized by a financial transaction provider that the Secretary
and the Board of Governors of the Federal Reserve System, in consultation
with the Attorney General, jointly determine, by regulation or order,
could be utilized in connection with, or to facilitate, any restricted
transaction.
`(3) ELECTRONIC FUND TRANSFER- The term `electronic fund transfer'--
`(A) has the same meaning as in section 903 of the Electronic Fund Transfer
Act, except that such term includes transfers that would otherwise be
excluded under section 903(6)(E) of that Act; and
`(B) includes any fund transfer covered by Article 4A of the Uniform
Commercial Code, as in effect in any State.
`(4) FINANCIAL INSTITUTION- The term `financial institution' has the same
meaning as in section 903 of the Electronic Fund Transfer Act, except
that such term does not include a casino, sports book, or other business
at or through which bets or wagers may be placed or received.
`(5) FINANCIAL TRANSACTION PROVIDER- The term `financial transaction provider'
means a creditor, credit card issuer, financial institution, operator
of a terminal at which an electronic fund transfer may be initiated, money
transmitting business, or international, national, regional, or local
payment network utilized to effect a credit transaction, electronic fund
transfer, stored value product transaction, or money transmitting service,
or a participant in such network, or other participant in a designated
payment system.
`(6) INSURED DEPOSITORY INSTITUTION- The term `insured depository institution'--
`(A) has the same meaning as in section 3 of the Federal Deposit Insurance
Act; and
`(B) includes an insured credit union (as defined in section 101 of
the Federal Credit Union Act).
`(7) MONEY TRANSMITTING BUSINESS AND MONEY TRANSMITTING SERVICE- The terms
`money transmitting business' and `money transmitting service' have the
same meanings as in section 5330(d) (determined without regard to any
regulations prescribed by the Secretary thereunder).
`(8) RESTRICTED TRANSACTION- The term `restricted transaction' means any
transaction or transmittal involving any credit, funds, instrument, or
proceeds described in any paragraph of section 5362 which the recipient
is prohibited from accepting under such section.
`(9) SECRETARY- The term `Secretary' means the Secretary of the Treasury.
`(A) IN GENERAL- The term `unlawful gambling' means to place, receive,
or otherwise knowingly transmit a bet or wager by any means which involves
the use of a communication facility where such bet or wager is unlawful
under any applicable Federal or State law in the State or tribal lands
in which the bet or wager is initiated, received, or otherwise made.
`(B) EXCLUSION OF CERTAIN AUTHORIZED TRANSACTIONS- The term `unlawful
gambling' does not include any intrastate or intratribal transactions
authorized under section 1084(c) of title 18, United States Code.
`(C) INTERMEDIATE ROUTING- With respect to section 5362, the intermediate
routing of electronic data shall not determine the location or locations
in which a bet or wager is initiated, received, or otherwise made.
`(11) OTHER TERMS- The terms `bet or wager', `communication facility',
`gambling business', `own and control', `person', `State', and `tribal'
have the same meanings as in section 1081 of title 18.
`Sec. 5362. Prohibition on acceptance of any financial instrument for
unlawful gambling
`No person engaged in a gambling business may knowingly accept, in connection
with the participation of another person in unlawful gambling--
`(1) credit, or the proceeds of credit, extended to or on behalf of such
other person (including credit extended through the use of a credit card);
`(2) an electronic fund transfer, or funds transmitted by or through a
money transmitting business, or the proceeds of an electronic fund transfer
or money transmitting service, from or on behalf of such other person;
`(3) any check, draft, or similar instrument which is drawn by or on behalf
of such other person and is drawn on or payable at or through any financial
institution; or
`(4) the proceeds of any other form of financial transaction, as the Secretary
and the Board of Governors of the Federal Reserve System may jointly prescribe
by regulation, which involves a financial institution as a payor or financial
intermediary on behalf of or for the benefit of such other person.
`Sec. 5363. Policies and procedures to identify and prevent restricted
transactions
`(a) Regulations- Before the end of the 270-day period beginning on the
date of the enactment of this subchapter, the Secretary and the Board of
Governors of the Federal Reserve System, in consultation with the Attorney
General, shall prescribe regulations (which the Secretary and the Board
jointly determine to be appropriate) requiring each designated payment system,
and all participants therein, to identify and block or otherwise prevent
or prohibit restricted transactions through the establishment of policies
and procedures reasonably designed to identify and block or otherwise prevent
or prohibit the acceptance of restricted transactions in any of the following
ways:
`(1) The establishment of policies and procedures that--
`(A) allow the payment system and any person involved in the payment
system to identify restricted transactions by means of codes in authorization
messages or by other means; and
`(B) block restricted transactions identified as a result of the policies
and procedures developed pursuant to subparagraph (A).
`(2) The establishment of policies and procedures that prevent or prohibit
the acceptance of the products or services of the payment system in connection
with a restricted transaction.
`(b) Requirements for Policies and Procedures- In prescribing regulations
under subsection (a), the Secretary and the Board of Governors of the Federal
Reserve System shall--
`(1) identify types of policies and procedures, including nonexclusive
examples, which would be deemed, as applicable, to be reasonably designed
to identify and block or otherwise prevent or prohibit the acceptance
of the products or services with respect to each type of restricted transaction;
`(2) to the extent practical, permit any participant in a payment system
to choose among alternative means of identifying and blocking, or otherwise
preventing or prohibiting the acceptance of the products or services of
the payment system or participant in connection with, restricted transactions;
and
`(3) consider exempting certain restricted transactions or designated
payment systems from any requirement imposed under such regulations, if
the Secretary and the Board jointly find that it is not reasonably practical
to identify and block, or otherwise prevent or prohibit the acceptance
of, such transactions.
`(c) Compliance With Payment System Policies and Procedures- A financial
transaction provider shall be considered to be in compliance with the regulations
prescribed under subsection (a), if--
`(1) such person relies on and complies with the policies and procedures
of a designated payment system of which it is a member or participant
to--
`(A) identify and block restricted transactions; or
`(B) otherwise prevent or prohibit the acceptance of the products or
services of the payment system, member, or participant in connection
with restricted transactions; and
`(2) such policies and procedures of the designated payment system comply
with the requirements of regulations prescribed under subsection (a).
`(d) No Liability for Blocking or Refusing to Honor Restricted Transactions-
A person that identifies and blocks a transaction, prevents or prohibits
the acceptance of its products or services in connection with a transaction,
or otherwise refuses to honor a transaction--
`(1) that is a restricted transaction;
`(2) that such person reasonably believes to be a restricted transaction;
or
`(3) as a designated payment system or a member of a designated payment
system in reliance on the policies and procedures of the payment system,
in an effort to comply with regulations prescribed under subsection (a),
shall not be liable to any party for such action.
`(e) Regulatory Enforcement- The requirements of this subchapter shall be
enforced exclusively by--
`(1) the Federal functional regulators, with respect to the designated
payment systems and financial transaction providers subject to the respective
jurisdiction of such regulators under section 505(a) of the Gramm-Leach-Bliley
Act and section 5g of the Commodities Exchange Act; and
`(2) the Federal Trade Commission, with respect to designated payment
systems and financial transaction providers not otherwise subject to the
jurisdiction of any Federal functional regulators (including the Commission)
as described in paragraph (1).'.
SEC. 202. TECHNICAL AND CONFORMING AMENDMENT.
The table of sections for chapter 53 of title 31, United States Code, is
amended by adding at the end the following:
`SUBCHAPTER IV--POLICIES AND PROCEDURES REQUIRED TO PREVENT PAYMENTS FOR
UNLAWFUL GAMBLING
`5362. Prohibition on acceptance of any financial instrument for unlawful
gambling.
`5363. Policies and procedures to identify and prevent restricted transactions.'.
TITLE III--INTERNET GAMBLING IN OR THROUGH FOREIGN JURISDICTIONS
SEC. 301. INTERNET GAMBLING IN OR THROUGH FOREIGN JURISDICTIONS.
(a) In General- In deliberations between the United States Government and
any other country on money laundering, corruption, and crime issues, the
United States Government should--
(1) encourage cooperation by foreign governments and relevant international
fora in identifying whether Internet gambling operations are being used
for money laundering, corruption, or other crimes;
(2) advance policies that promote the cooperation of foreign governments,
through information sharing or other measures, in the enforcement of this
Act; and
(3) encourage the Financial Action Task Force on Money Laundering, in
its annual report on money laundering typologies, to study the extent
to which Internet gambling operations are being used for money laundering
purposes.
(b) Report Required- The Secretary of the Treasury shall submit an annual
report to the Congress on any deliberations between the United States and
other countries on issues relating to Internet gambling.
Passed the House of Representatives July 11, 2006.
Attest:
KAREN L. HAAS,
Clerk.
Calendar No. 519
109th CONGRESS
2d Session
H. R. 4411
AN ACT
To prevent the use of certain payment instruments, credit cards, and fund
transfers for unlawful Internet gambling, and for other purposes.
July 13, 2006
Read the second time and placed on the calendar
END
