[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 474 Reported in Senate (RS)]



                                                       Calendar No. 223

105th CONGRESS

  1st Session

                                 S. 474

Rule___________________________________________________________________

                                 A BILL



    To amend sections 1081 and 1084 of title 18, United States Code.

_______________________________________________________________________

                            October 23, 1997

                       Reported with an amendment






105th CONGRESS
  1st Session
                                 S. 474

    To amend sections 1081 and 1084 of title 18, United States Code.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 19, 1997

 Mr. Kyl (for himself, Mrs. Feinstein, Mr. Graham, Mr. Hutchinson, Mr. 
Grassley, Mr. Johnson, Mr. Lieberman, Mr. Gorton, Mr. Bryan, Mr. Reid, 
 Mr. Ashcroft, and Mr. Bond) introduced the following bill; which was 
       read twice and referred to the Committee on the Judiciary

                            October 23, 1997

                Reported by Mr. Hatch, with an amendment


_______________________________________________________________________


 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

                                 A BILL


 
    To amend sections 1081 and 1084 of title 18, United States Code.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

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

<DELETED>    This Act may be cited as the ``Internet Gambling 
Prohibition Act of 1997''.</DELETED>

<DELETED>SEC. 2. DEFINITIONS.</DELETED>

<DELETED>    Section 1081 of title 18, United States Code, is amended--
</DELETED>
        <DELETED>    (1) in the matter immediately following the colon, 
        by designating the first 5 undesignated paragraphs as 
        paragraphs (1) through (5), respectively, and indenting each 
        paragraph accordingly;</DELETED>
        <DELETED>    (2) in paragraph (5), as so designated--</DELETED>
                <DELETED>    (A) by striking ``wire communication'' and 
                inserting ``communication'';</DELETED>
                <DELETED>    (B) by striking ``transmission of 
                writings'' and inserting ``transmission or receipt of 
                data, writings''; and</DELETED>
                <DELETED>    (C) by striking ``or other like'' and all 
                that follows before the period and inserting ``radio, 
                electromagnetic, photo-optical, photoelectric, or other 
                similar facility''; and</DELETED>
        <DELETED>    (3) by adding at the end the following:</DELETED>
        <DELETED>    ``(6) Bets or wagers.--The term `bets or wagers'--
        </DELETED>
                <DELETED>    ``(A) means the staking or risking by any 
                person of something of value upon the outcome of a 
                contest of chance or a future contingent event not 
                under the control or influence of the person, upon an 
                agreement or understanding that the person or another 
                person will receive something of value in the event of 
                a certain outcome;</DELETED>
                <DELETED>    ``(B) includes the purchase of a chance or 
                opportunity to win a lottery or other prize; 
                and</DELETED>
                <DELETED>    ``(C) does not include--</DELETED>
                        <DELETED>    ``(i) a bona fide business 
                        transaction governed by the securities laws (as 
                        that term is defined in section 3(a)(47) of the 
                        Securities Exchange Act of 1934 (15 U.S.C. 
                        78c(a)(47))) for the purchase or sale at a 
                        future date of securities (as that term is 
                        defined in section 3(a)(10) of the Securities 
                        Exchange Act of 1934 (15 U.S.C. 
                        78c(a)(10)));</DELETED>
                        <DELETED>    ``(ii) a contract of indemnity or 
                        guarantee; or</DELETED>
                        <DELETED>    ``(iii) a contract for life, 
                        health, or accident insurance.''.</DELETED>

<DELETED>SEC. 3. TRANSMISSION OF WAGERING INFORMATION; 
              PENALTIES.</DELETED>

<DELETED>    Section 1084 of title 18, United States Code, is amended--
</DELETED>
        <DELETED>    (1) by striking subsections (a) and (b) and 
        inserting the following:</DELETED>
<DELETED>    ``(a) In General.--</DELETED>
        <DELETED>    ``(1) Persons engaged in the business of betting 
        or wagering.--Whoever, being engaged in the business of betting 
        or wagering knowingly uses a communication facility for the 
        transmission or receipt in interstate or foreign commerce of 
        bets or wagers, information assisting in the placing of bets or 
        wagers, or a communication that entitles the transmitter or 
        receiver to the opportunity to receive money or credit as a 
        result of bets or wagers, shall be fined not more than $10,000, 
        imprisoned not more than 2 years, or both.</DELETED>
        <DELETED>    ``(2) Other persons.--Whoever (other than a person 
        described in paragraph (1)) knowingly uses a communication 
        facility for the transmission or receipt in interstate or 
        foreign commerce of bets or wagers, information assisting in 
        the placing of bets or wagers, or a communication that entitles 
        the transmitter or receiver to the opportunity to receive money 
        or credit as a result of bets or wagers, shall be fined not 
        more than $5,000, imprisoned not more than 1 year, or 
        both.</DELETED>
<DELETED>    ``(b) Exceptions.--</DELETED>
        <DELETED>    ``(1) News reporting; legal bets and wagers.--
        Nothing in this section shall be construed to prohibit the 
        transmission or receipt in interstate or foreign commerce of 
        any information--</DELETED>
                <DELETED>    ``(A) for use in the news reporting of any 
                activity, event, or contest upon which bets or wagers 
                are based; or</DELETED>
                <DELETED>    ``(B) relating to the placing of bets or 
                wagers, if such betting or wagering--</DELETED>
                        <DELETED>    ``(i) is legal in the State or 
                        foreign country in which the transmission 
                        originates; and</DELETED>
                        <DELETED>    ``(ii) is legal in each State and 
                        each foreign country in which the transmission 
                        is received.</DELETED>
        <DELETED>    ``(2) State law.--Nothing in this section shall be 
        construed to preempt any State law.''; and</DELETED>
        <DELETED>    (2) in subsection (d)--</DELETED>
                <DELETED>    (A) by striking ``(d) When'' and inserting 
                the following:</DELETED>
<DELETED>    ``(d) Duties of Common Carriers and Interactive Computer 
Service Providers.--</DELETED>
        <DELETED>    ``(1) In general.--If'';</DELETED>
                <DELETED>    (B) by inserting ``or interactive computer 
                service provider'' after ``common carrier'' each place 
                that term appears;</DELETED>
                <DELETED>    (C) by striking ``Nothing'' and inserting 
                the following:</DELETED>
        <DELETED>    ``(3) Judicial action.--Nothing''; and</DELETED>
                <DELETED>    (D) by inserting after paragraph (1), as 
                so designated by subparagraph (A) of this paragraph, 
                the following:</DELETED>
        <DELETED>    ``(2) Injunctive relief.--Any Federal, State, or 
        local law enforcement agency acting within its jurisdiction, 
        shall have the authority, following the issuance of a notice 
        under paragraph (1), to seek an injunction or other appropriate 
        relief from a Federal or State court of competent jurisdiction 
        barring access to the communication facility at issue or 
        preventing the use of such facility for the purpose of 
        transmitting or receiving gambling information in interstate or 
        foreign commerce in violation of Federal, State, or local 
        law.''.</DELETED>

<DELETED>SEC. 4. SENSE OF THE SENATE.</DELETED>

<DELETED>    It is the sense of the Senate that the Federal Government 
should have extraterritorial jurisdiction over the transmission to or 
receipt from the United States of--</DELETED>
        <DELETED>    (1) bets or wagers (as that term is defined in 
        section 1081 of title 18, United States Code);</DELETED>
        <DELETED>    (2) information assisting in the placing of bets 
        or wagers; and</DELETED>
        <DELETED>    (3) any communication that entitles the 
        transmitter or recipient to the opportunity to receive money or 
        credit as a result of bets or wagers.</DELETED>

<DELETED>SEC. 5. REPORT.</DELETED>

<DELETED>    Not later than 360 days after the date of enactment of 
this Act, the Attorney General shall submit a report to Congress that 
includes--</DELETED>
        <DELETED>    (1) an analysis of the problems, if any, 
        associated with enforcing section 1084 of title 18, United 
        States Code, as amended by this Act;</DELETED>
        <DELETED>    (2) recommendations for the best use of the 
        resources of the Department of Justice to enforce that 
        section;</DELETED>
        <DELETED>    (3) recommendations for the best use of the 
        resources of the Federal Communications Commission to enforce 
        that section; and</DELETED>
        <DELETED>    (4) an estimate of the amount of activity and 
        money being used to gamble on the Internet (as that term is 
        defined in section 230(e)(1) of the Communications Act of 1934 
        (47 U.S.C. 230(e)(1)).</DELETED>

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Internet Gambling Prohibition Act of 
1997''.

SEC. 2. DEFINITIONS.

    Section 1081 of title 18, United States Code, is amended--
            (1) in the matter immediately following the colon, by 
        designating the first 5 undesignated paragraphs as paragraphs 
        (1) through (5), respectively, and indenting each paragraph 
        accordingly; and
            (2) by adding at the end the following:
            ``(6) Bets or wagers.--The term `bets or wagers'--
                    ``(A) means the staking or risking by any person of 
                something of value (other than a de minimis amount) 
                upon the outcome of a contest, sporting event, or game 
                of 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 
                and which purchase requires consideration in an amount 
                exceeding a de minimis amount); and
                    ``(C) does not include--
                            ``(i) a bona fide business transaction 
                        governed by the securities laws (as that term 
                        is defined in section 3(a)(47) of the 
                        Securities Exchange Act of 1934 (15 U.S.C. 
                        78c(a)(47))) for the purchase or sale at a 
                        future date of securities (as that term is 
                        defined in section 3(a)(10) of the Securities 
                        Exchange Act of 1934 (15 U.S.C. 78c(a)(10)));
                            ``(ii) a contract of indemnity or 
                        guarantee; or
                            ``(iii) a contract for life, health, or 
                        accident insurance.''.

SEC. 3. PROHIBITION ON INTERNET GAMBLING.

    (a) In General.--Chapter 50 of title 18, United States Code, is 
amended by adding at the end the following:
``Sec. 1085. Internet gambling
    ``(a) Definitions.--In this section--
            ``(1) the term `interactive computer service' means any 
        information service, system, or access software provider that 
        provides or enables computer access by multiple users to a 
        computer server, including specifically a service or system 
        that provides access to the Internet;
            ``(2) the term `Internet' means the international computer 
        network of both Federal and non-Federal interoperable packet 
        switched data networks; and
            ``(3) the term `State' means a State of the United States, 
        the District of Columbia, the Commonwealth of Puerto Rico, or a 
        commonwealth, territory, or possession of the United States.
    ``(b) Gambling.--
            ``(1) Prohibition.--It shall be unlawful for a person to 
        place, receive, or otherwise make a bet or wager, via the 
        Internet or any other interactive computer service in any 
        State.
            ``(2) Penalties.--A person who willfully violates paragraph 
        (1) shall be--
                    ``(A) fined in an amount that is not more than the 
                greater of--
                            ``(i) the amount that the person is found 
                        to have wagered via the Internet; or
                            ``(ii) $2,500;
                    ``(B) imprisoned not more than 6 months; or
                    ``(C) both.
    ``(c) Gambling Information.--
            ``(1) Prohibition.--It shall be unlawful for a person 
        engaged in the business of betting or wagering to engage in 
        that business through the Internet or through any other 
        interactive computer service in any State.
            ``(2) Penalties.--A person engaged in the business of 
        betting or wagering who violates paragraph (1) shall be--
                    ``(A) fined in an amount that is not more than the 
                greater of--
                            ``(i) the amount that such person is found 
                        to have received in bets or wagers as a result 
                        of engaging in that business in violation of 
                        this subsection; or
                            ``(ii) $20,000;
                    ``(B) imprisoned not more than 4 years; or
                    ``(C) both.''.
    (b) Technical Amendment.--The analysis for chapter 50 of title 18, 
United States Code, is amended by adding at the end the following:

``1085. Internet gambling.''.

SEC. 4. CIVIL REMEDIES.

    (a) The district courts of the United States shall have original 
and exclusive jurisdiction to prevent and restrain violations of 
section 1085 of title 18, United States Code, as added by this Act, by 
issuing appropriate orders.
    (b)(1) The Attorney General of the United States may institute 
proceedings under this section. Upon application of the Attorney 
General, the district court may enter a restraining order or an 
injunction, or may take any other action necessary to prevent a 
violation of section 1085 of title 18, United States Code, as added by 
this Act, if, prior to the filing of an indictment or information by 
the United States, the court determines that there is a substantial 
probability that such violation has occurred or will occur. Upon the 
filing of an indictment or information by the United States, the 
district court shall enter a preliminary injunction, or may take any 
other action necessary to prevent a violation of section 1085 of title 
18, United States Code, as added by this Act. Notwithstanding any other 
provisions of this paragraph the court may not enter an order affecting 
the transmission of bets, wagers, or related gambling information in, 
into, or through any State other than the State in which the court is 
situated.
    (2) The attorney general of a State (or other appropriate State 
official) in which a violation of section 1085 of title 18, United 
States Code, as added by this Act, is alleged to have occurred, after 
providing written notice to the Attorney General of the United States, 
may institute proceedings under this section. Upon application of the 
attorney general of the affected State, the district court may enter a 
temporary restraining order or an injunction, or may take any other 
action necessary to prevent a violation of section 1085 of title 18, 
United States Code, as added by this Act, if, prior to the filing of an 
indictment or information by the United States or the State, the court 
determines that there is a substantial probability that the United 
States will prevail at trial. Notwithstanding any other provisions of 
this paragraph the court may not enter an order affecting the 
transmission of bets, wages, or related gambling information in, into, 
or through any State other than the State in which the court is 
situated.
    (3) Any temporary restraining order or a preliminary injunction 
entered pursuant to this subsection shall expire if, and as soon as the 
Attorney General of the United States, and the attorney general (or 
other appropriate State official) of the State at issue, each notify 
the court that issued the order or injunction that the United States or 
the State, as applicable, will not seek a permanent injunction.
    (c)(1) A district court may enter a temporary restraining order 
under this section upon application of the Attorney General of the 
United States under subsection (b)(1), or the attorney general (or 
other appropriate State official) of an affected State under subsection 
(b)(3), without notice and the opportunity for a hearing when an 
indictment or information has not yet been filed with respect to a 
transmission of bets, wagers, or related gambling information in, into, 
or through the State in which the court is situated if the United 
States demonstrates that there is probable cause to believe that the 
transmission violates section 1085 of title 18, United States Code, as 
added by this Act.
    (2) A temporary restraining order entered under this subsection 
shall expire only upon the grant or denial of a permanent injunction.
    (3) A hearing requested concerning an order entered under this 
subsection shall be held at the earliest practicable time.
    (d) The court may receive and consider at a hearing held pursuant 
to this section evidence and information that would be inadmissible 
under the Federal Rules of Evidence.
    (e) Upon conviction of a person under this section, the court may 
enter a permanent injunction enjoining the transmission of bets, 
wagers, or related gambling information in, into, or through the State 
in which the court is situated.

SEC. 5. MULTILATERAL NEGOTIATIONS.

    (a) In General.--Not later than 6 months after the date of 
enactment of this Act, the Secretary of State, in consultation with the 
Secretary of the Treasury, the Attorney General of the United States, 
and the Secretary of Commerce, shall commence negotiations with foreign 
countries in order to conclude international agreements that would 
enable the United States to enforce section 1085(c)(1) of title 18, 
United States Code, as added by this Act, with respect to persons 
described in that section who are engaging in violations of that 
section from outside the United States.
    (b) Report.--Not less frequently than every 6 months after the 
commencement of the negotiations under subsection (a), the Secretary of 
State shall report on the progress of the negotiations to the Majority 
and Minority Leaders of the Senate, the Speaker and Minority Leader of 
the House of Representatives, and the Chairmen and Ranking Members of 
the Committees on the Judiciary of the House of Representatives and the 
Senate.