[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3125 Reported in House (RH)]






                                                 Union Calendar No. 389
106th CONGRESS
  2d Session
                                H. R. 3125

                      [Report No. 106-655, Part I]

         To prohibit Internet gambling, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 21, 1999

 Mr. Goodlatte (for himself, Mr. LoBiondo, Mr. Wolf, Mr. Boucher, Mr. 
   Gibbons, and Mr. Goode) introduced the following bill; which was 
               referred to the Committee on the Judiciary

                              June 7, 2000

 Reported with an amendment and referred to the Committee on Commerce 
for a period ending not later than June 23, 2000, for consideration of 
     such provisions of the bill and amendment as fall within the 
     jurisdiction of that committee pursuant to clause 1(f), rule X
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

                             June 23, 2000

  Additional sponsors: Mr. Lucas of Kentucky, Mr. Smith of Texas, Mr. 
  Duncan, Mrs. Northup, Mr. Peterson of Minnesota, Mr. Traficant, Mr. 
Wamp, Mr. Coburn, Mr. LaFalce, Mr. Fletcher, Mr. Goodling, Mr. Hastings 
of Florida, Mr. Whitfield, Mr. Wexler, Mr. Martinez, Mr. George Miller 
of California, Mr. Shaw, Mr. Lewis of Kentucky, Mr. Rogers, Mr. Maloney 
 of Connecticut, Mrs. Thurman, Mr. Riley, Mrs. Fowler, Mr. Gilchrest, 
     Mr. Shadegg, Mr. Stump, Mr. English, Mr. Salmon, and Mr. Cook

                             June 23, 2000

  Committee on Commerce discharged; committed to the Committee of the 
    Whole House on the State of the Union and ordered to be printed
[For text of introduced bill, see copy of bill as introduced on October 
                               21, 1999]

_______________________________________________________________________

                                 A BILL


 
         To prohibit 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.

    This Act may be cited as the ``Internet Gambling Prohibition Act of 
2000''.

SEC. 2. 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 the following definitions 
apply:
            ``(1) Bets or wagers.--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 greater value than the amount staked or 
                risked 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
                    ``(D) 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 transaction on or subject to the 
                        rules of a contract market designated pursuant 
                        to section 5 of the Commodity Exchange Act (7 
                        U.S.C. 7);
                            ``(iii) a contract of indemnity or 
                        guarantee;
                            ``(iv) a contract for life, health, or 
                        accident insurance; or
                            ``(v) participation in a simulation sports 
                        game or an educational game or contest that--
                                    ``(I) is not dependent solely on 
                                the outcome of any single sporting 
                                event or nonparticipant's singular 
                                individual performance in any single 
                                sporting event;
                                    ``(II) has an outcome that reflects 
                                the relative knowledge and skill of the 
                                participants with such outcome 
                                determined predominantly by accumulated 
                                statistical results of sporting events 
                                and nonparticipants accumulated 
                                individual performances therein; and
                                    ``(III) offers a prize or award to 
                                a participant that is established in 
                                advance of the game or contest and is 
                                not determined by the number of 
                                participants or the amount of any fees 
                                paid by those participants.
            ``(2) Closed-loop subscriber-based service.--The term 
        `closed-loop subscriber-based service' means any information 
        service or system that uses--
                    ``(A) a device or combination of devices--
                            ``(i) expressly authorized and operated in 
                        accordance with the laws of a State, 
                        exclusively for placing, receiving, or 
                        otherwise making a bet or wager described in 
                        subsection (f)(1)(B); and
                            ``(ii) by which a person located within any 
                        State must subscribe and be registered with the 
                        provider of the wagering service by name, 
                        address, and appropriate billing information to 
                        be authorized to place, receive, or otherwise 
                        make a bet or wager, and must be physically 
                        located within that State in order to be 
                        authorized to do so;
                    ``(B) an effective customer verification and age 
                verification system, expressly authorized and operated 
                in accordance with the laws of the State in which it is 
                located, to ensure that all applicable Federal and 
                State legal and regulatory requirements for lawful 
                gambling are met; and
                    ``(C) appropriate data security standards to 
                prevent unauthorized access by any person who has not 
                subscribed or who is a minor.
            ``(3) Foreign jurisdiction.--The term `foreign 
        jurisdiction' means a jurisdiction of a foreign country or 
        political subdivision thereof.
            ``(4) Gambling business.--The term `gambling business' 
        means--
                    ``(A) a business that is conducted at a gambling 
                establishment, or that--
                            ``(i) involves--
                                    ``(I) the placing, receiving, or 
                                otherwise making of bets or wagers; or
                                    ``(II) the offering to engage in 
                                the placing, receiving, or otherwise 
                                making of bets or wagers;
                            ``(ii) involves 1 or more persons who 
                        conduct, finance, manage, supervise, direct, or 
                        own all or part of such business; and
                            ``(iii) has been or remains in 
                        substantially continuous operation for a period 
                        in excess of 10 days or has a gross revenue of 
                        $2,000 or more from such business during any 
                        24-hour period; and
                    ``(B) any soliciting agent of a business described 
                in subparagraph (A).
            ``(5) Information assisting in the placing of a bet or 
        wager.--The term `information assisting in the placing of a bet 
        or wager'--
                    ``(A) means information that is intended by the 
                sender or recipient to be used by a person engaged in 
                the business of betting or wagering to place, receive, 
                or otherwise make a bet or wager; and
                    ``(B) does not include--
                            ``(i) information concerning parimutuel 
                        pools that is exchanged exclusively between or 
                        among 1 or more racetracks or other parimutuel 
                        wagering facilities licensed by the State or 
                        approved by the foreign jurisdiction in which 
                        the facility is located, and 1 or more 
                        parimutuel wagering facilities licensed by the 
                        State or approved by the foreign jurisdiction 
                        in which the facility is located, if that 
                        information is used only to conduct common pool 
                        parimutuel pooling under applicable law;
                            ``(ii) information exchanged exclusively 
                        between or among 1 or more racetracks or other 
                        parimutuel wagering facilities licensed by the 
                        State or approved by the foreign jurisdiction 
                        in which the facility is located, and a support 
                        service located in another State or foreign 
                        jurisdiction, if the information is used only 
                        for processing bets or wagers made with that 
                        facility under applicable law;
                            ``(iii) information exchanged exclusively 
                        between or among 1 or more wagering facilities 
                        that are licensed and regulated by the State in 
                        which each facility is located, and any support 
                        service, wherever located, if the information 
                        is used only for the pooling or processing of 
                        bets or wagers made by or with the facility or 
                        facilities under each State's applicable law;
                            ``(iv) any news reporting or analysis of 
                        wagering activity, including odds, racing or 
                        event results, race and event schedules, or 
                        categories of wagering; or
                            ``(v) any posting or reporting of any 
                        educational information on how to make a bet or 
                        wager or the nature of betting or wagering.
            ``(6) Interactive computer service.--The term `interactive 
        computer service' means any information service, system, or 
        access software provider that operates in, or uses a channel or 
        instrumentality of, interstate or foreign commerce to provide 
        or enable access by multiple users to a computer server, which 
        includes the transmission, storage, retrieval, hosting, 
        linking, formatting, or translation of a communication made by 
        another person, and including specifically a service, system, 
        or access software provider that--
                    ``(A) provides access to the Internet; or
                    ``(B) is engaged in the business of providing an 
                information location tool (which means a service that 
                refers or links users to an online location, including 
                a directory, index, reference, pointer, or hypertext 
                link).
            ``(7) Interactive computer service provider.--The term 
        `interactive computer service provider' means any person that 
        provides an interactive computer service, to the extent that 
        such person offers or provides such service.
            ``(8) Internet.--The term `Internet' means the 
        international computer network of both Federal and non-Federal 
        interoperable packet switched data networks.
            ``(9) Person.--The term `person' means any individual, 
        association, partnership, joint venture, corporation (or any 
        affiliate of a corporation), State or political subdivision 
        thereof, department, agency, or instrumentality of a State or 
        political subdivision thereof, or any other government, 
        organization, or entity (including any governmental entity (as 
        defined in section 3701(2) of title 28)).
            ``(10) Private network.--The term `private network' means a 
        communications channel or channels, including voice or computer 
        data transmission facilities, that use either--
                    ``(A) private dedicated lines; or
                    ``(B) the public communications infrastructure, if 
                the infrastructure is secured by means of the 
                appropriate private communications technology to 
                prevent unauthorized access.
            ``(11) State.--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.
            ``(12) Subscriber.--The term `subscriber'--
                    ``(A) means any person with a business relationship 
                with the interactive computer service provider through 
                which such person receives access to the system, 
                service, or network of that provider, even if no formal 
                subscription agreement exists; and
                    ``(B) includes registrants, students who are 
                granted access to a university system or network, and 
                employees or contractors who are granted access to the 
                system or network of their employer.
            ``(13) Soliciting agent.--The term `soliciting agent' means 
        any agent who knowingly solicits for a gambling business 
        described in paragraph (4)(A) of this subsection.
    ``(b) Internet Gambling.--
            ``(1) Prohibition.--Subject to subsection (f), it shall be 
        unlawful for a person engaged in a gambling business knowingly 
        to use the Internet or any other interactive computer service--
                    ``(A) to place, receive, or otherwise make a bet or 
                wager; or
                    ``(B) to send, receive, or invite information 
                assisting in the placing of a bet or wager.
            ``(2) Penalties.--A person engaged in a gambling business 
        who violates this section shall be--
                    ``(A) fined in an amount equal to not more than the 
                greater of--
                            ``(i) the total amount that such person bet 
                        or wagered, or placed, received, or accepted in 
                        bets or wagers, as a result of engaging in that 
                        business in violation of this section; or
                            ``(ii) $20,000;
                    ``(B) imprisoned not more than 4 years; or
                    ``(C) both.
            ``(3) Permanent injunctions.--Upon conviction of a person 
        under this section, the court may enter a permanent injunction 
        enjoining such person from placing, receiving, or otherwise 
        making bets or wagers or sending, receiving, or inviting 
        information assisting in the placing of bets or wagers.
    ``(c) Civil Remedies.--
            ``(1) Jurisdiction.--The district courts of the United 
        States shall have original and exclusive jurisdiction to 
        prevent and restrain violations of this section by issuing 
        appropriate orders in accordance with this section, regardless 
        of whether a prosecution has been initiated under this section.
            ``(2) Proceedings.--
                    ``(A) Institution by federal government.--
                            ``(i) In general.--The United States may 
                        institute proceedings under this subsection to 
                        prevent or restrain a violation of this 
                        section.
                            ``(ii) Relief.--Upon application of the 
                        United States under this subparagraph, the 
                        district court may enter a temporary 
                        restraining order or an injunction against any 
                        person to prevent or restrain a violation of 
                        this section if the court determines, after 
                        notice and an opportunity for a hearing, that 
                        there is a substantial probability that such 
                        violation has occurred or will occur.
                    ``(B) Institution by state attorney general.--
                            ``(i) In general.--The attorney general of 
                        a State (or other appropriate State official) 
                        in which a violation of this section allegedly 
                        has occurred or will occur, after providing 
                        written notice to the United States, may 
                        institute proceedings under this subsection to 
                        prevent or restrain the violation.
                            ``(ii) Relief.--Upon application of the 
                        attorney general (or other appropriate State 
                        official) of an affected State under this 
                        subparagraph, the district court may enter a 
                        temporary restraining order or an injunction 
                        against any person to prevent or restrain a 
                        violation of this section if the court 
                        determines, after notice and an opportunity for 
                        a hearing, that there is a substantial 
                        probability that such violation has occurred or 
                        will occur.
                    ``(C) Indian lands.--Notwithstanding subparagraphs 
                (A) and (B), for a violation that is alleged to have 
                occurred, or may occur, on Indian lands (as that term 
                is defined in section 4 of the Indian Gaming Regulatory 
                Act (25 U.S.C. 2703))--
                            ``(i) the United States shall have the 
                        enforcement authority provided under 
                        subparagraph (A); and
                            ``(ii) 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.
                    ``(D) Expiration.--Any temporary restraining order 
                or preliminary injunction entered pursuant to 
                subparagraph (A) or (B) shall expire if, and as soon 
                as, the United States, or the attorney general (or 
                other appropriate State official) of the State, as 
                applicable, notifies the court that issued the order or 
                injunction that the United States or the State, as 
                applicable, will not seek a permanent injunction.
            ``(3) Expedited proceedings.--
                    ``(A) In general.--In addition to any proceeding 
                under paragraph (2), a district court may, in exigent 
                circumstances, enter a temporary restraining order 
                against a person alleged to be in violation of this 
                section upon application of the United States under 
                paragraph  (2)(A), or the attorney general (or other 
appropriate State official) of an affected State under paragraph 
(2)(B), without notice and the opportunity for a hearing as provided in 
rule 65(b) of the Federal Rules of Civil Procedure (except as provided 
in subsection (d)(3)), if the United States or the State, as 
applicable, demonstrates that there is probable cause to believe that 
the use of the Internet or other interactive computer service at issue 
violates this section.
                    ``(B) Hearings.--A hearing requested concerning an 
                order entered under this paragraph shall be held at the 
                earliest practicable time.
    ``(d) Interactive Computer Service Providers.--
            ``(1) Immunity from liability for use by another.--
                    ``(A) In general.--An interactive computer service 
                provider described in subparagraph (B) shall not be 
                liable, under this section or any other provision of 
                Federal or State law prohibiting or regulating gambling 
                or gambling-related activities, for the use of its 
                facilities or services by another person to engage in 
                Internet gambling activity or advertising or promotion 
                of Internet gambling activity that violates such law--
                            ``(i) arising out of any transmitting, 
                        routing, or providing of connections for 
                        gambling-related material or activity 
                        (including intermediate and temporary storage 
                        in the course of such transmitting, routing, or 
                        providing connections) by the provider, if--
                                    ``(I) the material or activity was 
                                initiated by or at the direction of a 
                                person other than the provider;
                                    ``(II) the transmitting, routing, 
                                or providing of connections is carried 
                                out through an automatic process 
                                without selection of the material or 
                                activity by the provider;
                                    ``(III) the provider does not 
                                select the recipients of the material 
                                or activity, except as an automatic 
                                response to the request of another 
                                person; and
                                    ``(IV) the material or activity is 
                                transmitted through the system or 
                                network of the provider without 
                                modification of its content; or
                            ``(ii) arising out of any gambling-related 
                        material or activity at an online site residing 
                        on a computer server owned, controlled, or 
                        operated by or for the provider, or arising out 
                        of referring or linking users to an online 
                        location containing such material or activity, 
                        if the material or activity was initiated by or 
                        at the direction of a person other than the 
                        provider, unless the provider fails to take 
                        expeditiously, with respect to the particular 
                        material or activity at issue, the actions 
                        described in paragraph (2)(A) following the 
                        receipt by the provider of a notice described 
                        in paragraph (2)(B).
                    ``(B) Eligibility.--An interactive computer service 
                provider is described in this subparagraph only if the 
                provider--
                            ``(i) maintains and implements a written or 
                        electronic policy that requires the provider to 
                        terminate the account of a subscriber of its 
                        system or network expeditiously following the 
                        receipt by the provider of a notice described 
                        in paragraph (2)(B) alleging that such 
                        subscriber has violated or is violating this 
                        section; and
                            ``(ii) with respect to the particular 
                        material or activity at issue, has not 
                        knowingly permitted its computer server to be 
                        used to engage in activity that the provider 
                        knows is prohibited by this section, with the 
                        specific intent that such server be used for 
                        such purpose.
            ``(2) Notice to interactive computer service providers.--
                    ``(A) In general.--If an interactive computer 
                service provider receives from a Federal or State law 
                enforcement agency, acting within its authority and 
                jurisdiction, a written or electronic notice described 
                in subparagraph (B), that a particular online site 
                residing on a computer server owned, controlled, or 
                operated by or for the provider is being used by 
                another person to violate this section, the provider 
                shall expeditiously--
                            ``(i) remove or disable access to the 
                        material or activity residing at that online 
                        site that allegedly violates this section; or
                            ``(ii) in any case in which the provider 
                        does not control the site at which the subject 
                        material or activity resides, the provider, 
                        through any agent of the provider designated in 
                        accordance with section 512(c)(2) of title 17, 
                        or other responsible identified employee or 
                        contractor--
                                    ``(I) notify the Federal or State 
                                law enforcement agency that the 
                                provider is not the proper recipient of 
                                such notice; and
                                    ``(II) upon receipt of a subpoena, 
                                cooperate with the Federal or State law 
                                enforcement agency in identifying the 
                                person or persons who control the site.
                    ``(B) Notice.--A notice is described in this 
                subparagraph only if it--
                            ``(i) identifies the material or activity 
                        that allegedly violates this section, and 
                        alleges that such material or activity violates 
                        this section;
                            ``(ii) provides information reasonably 
                        sufficient to permit the provider to locate 
                        (and, as appropriate, in a notice issued 
                        pursuant to paragraph (3)(A) to block access 
                        to) the material or activity;
                            ``(iii) is supplied to any agent of a 
                        provider designated in accordance with section 
                        512(c)(2) of title 17, if information regarding 
                        such designation is readily available to the 
                        public;
                            ``(iv) provides information that is 
                        reasonably sufficient to permit the provider to 
                        contact the law enforcement agency that issued 
                        the notice, including the name of the law 
                        enforcement agency, and the name and telephone 
                        number of an individual to contact at the law 
                        enforcement agency (and, if available, the 
                        electronic mail address of that individual); 
                        and
                            ``(v) declares under penalties of perjury 
                        that the person submitting the notice is an 
                        official of the law enforcement agency 
                        described in clause (iv).
            ``(3) Injunctive relief.--
                    ``(A) In general.--The United States, or a State 
                law enforcement agency acting within its authority and 
                jurisdiction, may, not less than 24 hours following the 
                issuance to an interactive computer service provider of 
                a notice described in paragraph (2)(B), in a civil 
                action, obtain a temporary restraining order, or an 
                injunction to  prevent the use of the interactive 
computer service by another person in violation of this section.
                    ``(B) Limitations.--Notwithstanding any other 
                provision of this section, in the case of any 
                application for a temporary restraining order or an 
                injunction against an interactive computer service 
                provider described in paragraph (1)(B) to prevent a 
                violation of this section--
                            ``(i) arising out of activity described in 
                        paragraph (1)(A)(i), the injunctive relief is 
                        limited to--
                                    ``(I) an order restraining the 
                                provider from providing access to an 
                                identified subscriber of the system or 
                                network of the interactive computer 
                                service provider, if the court 
                                determines that there is probable cause 
                                to believe that such subscriber is 
                                using that access to violate this 
                                section (or to engage with another 
                                person in a communication that violates 
                                this section), by terminating the 
                                specified account of that subscriber; 
                                and
                                    ``(II) an order restraining the 
                                provider from providing access, by 
                                taking reasonable steps specified in 
                                the order to block access, to a 
                                specific, identified, foreign online 
                                location;
                            ``(ii) arising out of activity described in 
                        paragraph (1)(A)(ii), the injunctive relief is 
                        limited to--
                                    ``(I) the orders described in 
                                clause (i)(I);
                                    ``(II) an order restraining the 
                                provider from providing access to the 
                                material or activity that violates this 
                                section at a particular online site 
                                residing on a computer server operated 
                                or controlled by the provider; and
                                    ``(III) such other injunctive 
                                remedies as the court considers 
                                necessary to prevent or restrain access 
                                to specified material or activity that 
                                is prohibited by this section at a 
                                particular online location residing on 
                                a computer server operated or 
                                controlled by the provider, that are 
                                the least burdensome to the provider 
                                among the forms of relief that are 
                                comparably effective for that purpose.
                    ``(C) Considerations.--The court, in determining 
                appropriate injunctive relief under this paragraph, 
                shall consider--
                            ``(i) whether such an injunction, either 
                        alone or in combination with other such 
                        injunctions issued, and currently operative, 
                        against the same provider would significantly 
                        (and, in the case of relief under subparagraph 
                        (B)(ii), taking into account, among other 
                        factors, the conduct of the provider, 
                        unreasonably) burden either the provider or the 
                        operation of the system or network of the 
                        provider;
                            ``(ii) whether implementation of such an 
                        injunction would be technically feasible and 
                        effective, and would not materially interfere 
                        with access to lawful material at other online 
                        locations;
                            ``(iii) whether other less burdensome and 
                        comparably effective means of preventing or 
                        restraining access to the illegal material or 
                        activity are available; and
                            ``(iv) the magnitude of the harm likely to 
                        be suffered by the community if the injunction 
                        is not granted.
                    ``(D) Notice and ex parte orders.--Injunctive 
                relief under this paragraph shall not be available 
                without notice to the service provider and an 
                opportunity for such provider to appear before the 
                court, except for orders ensuring the preservation of 
                evidence or other orders having no material adverse 
                effect on the operation of the communications network 
                of the service provider.
            ``(4) Advertising or promotion of non-internet gambling.--
                    ``(A) Definitions.--In this paragraph:
                            ``(i) Conducted.--With respect to a 
                        gambling activity, that activity is `conducted' 
                        in a State if the State is the State in which 
                        the gambling establishment (as defined in 
                        section 1081) that offers the gambling activity 
                        being advertised or promoted is physically 
                        located.
                            ``(ii) Non-internet gambling activity.--The 
                        term `non-Internet gambling activity' means--
                                    ``(I) a gambling activity in which 
                                the placing of the bet or wager is not 
                                conducted by the Internet; or
                                    ``(II) a gambling activity to which 
                                the prohibitions of this section do not 
                                apply.
                    ``(B) Immunity from liability for use by another.--
                            ``(i) In general.--An interactive computer 
                        service provider described in clause (ii) shall 
                        not be liable, under any provision of Federal 
                        or State law prohibiting or regulating gambling 
                        or gambling-related activities, or under any 
                        State law prohibiting or regulating advertising 
                        and promotional activities, for--
                                    ``(I) content, provided by another 
                                person, that advertises or promotes 
                                non-Internet gambling activity that 
                                violates such law (unless the provider 
                                is engaged in the business of such 
                                gambling), arising out of any of the 
                                activities described in paragraph 
                                (1)(A) (i) or (ii); or
                                    ``(II) content, provided by another 
                                person, that advertises or promotes 
                                non-Internet gambling activity that is 
                                lawful under Federal law and the law  
of the State in which such gambling activity is conducted.
                            ``(ii) Eligibility.--An interactive 
                        computer service is described in this clause 
                        only if the provider--
                                    ``(I) maintains and implements a 
                                written or electronic policy that 
                                requires the provider to terminate the 
                                account of a subscriber of its system 
                                or network expeditiously following the 
                                receipt by the provider of a notice 
                                described in paragraph (2)(B) alleging 
                                that such subscriber maintains a 
                                website on a computer server controlled 
                                or operated by the provider for the 
                                purpose of engaging in advertising or 
                                promotion of non-Internet gambling 
                                activity prohibited by a Federal law or 
                                a law of the State in which such 
                                activity is conducted;
                                    ``(II) with respect to the 
                                particular material or activity at 
                                issue, has not knowingly permitted its 
                                computer server to be used to engage in 
                                the advertising or promotion of non-
                                Internet gambling activity that the 
                                provider knows is prohibited by a 
                                Federal law or a law of the State in 
                                which the activity is conducted, with 
                                the specific intent that such server be 
                                used for such purpose; and
                                    ``(III) at reasonable cost, offers 
                                residential customers of the provider's 
                                Internet access service, if the 
                                provider provides Internet access 
                                service to such customers, computer 
                                software, or another filtering or 
                                blocking system that includes the 
                                capability of filtering or blocking 
                                access by minors to online Internet 
                                gambling sites that violate this 
                                section.
                    ``(C) Notice to interactive computer service 
                providers.--
                            ``(i) Notice from federal law enforcement 
                        agency.--If an interactive computer service 
                        provider receives from a Federal law 
                        enforcement agency, acting within its authority 
                        and jurisdiction, a written or electronic 
                        notice described in paragraph (2)(B), that a 
                        particular online site residing on a computer 
                        server owned, controlled, or operated by or for 
                        the provider is being used by another person to 
                        advertise or promote non-Internet gambling 
                        activity that violates a Federal law 
                        prohibiting or regulating gambling or gambling-
                        related activities, the provider shall 
                        expeditiously take the actions described in 
                        paragraph (2)(A) (i) or (ii) with respect to 
                        the advertising or promotion identified in the 
                        notice.
                            ``(ii) Notice from state law enforcement 
                        agency.--If an interactive computer service 
                        provider receives from a State law enforcement 
                        agency, acting within its authority and 
                        jurisdiction, a written or electronic notice 
                        described in paragraph (2)(B), that a 
                        particular online site residing on a computer 
                        server owned, controlled, or operated by or for 
                        the provider is being used by another person to 
                        advertise or promote non-Internet gambling 
                        activity that is conducted in that State and 
                        that violates a law of that State prohibiting 
                        or regulating gambling or gambling-related 
                        activities, the provider shall expeditiously 
                        take the actions described in paragraph (2)(A) 
                        (i) or (ii) with respect to the advertising or 
                        promotion identified in the notice.
                    ``(D) Injunctive relief.--The United States, or a 
                State law enforcement agency, acting within its 
                authority and jurisdiction, may, not less than 24 hours 
                following the issuance to an interactive computer 
                service provider of a notice described in paragraph 
                (2)(B), in a civil action, obtain a temporary 
                restraining order, or an injunction, to prevent the use 
                of the interactive computer service by another person 
                to advertise or promote non-Internet gambling activity 
                that violates a Federal law, or a law of the State in 
                which such activity is conducted that prohibits or 
                regulates gambling or gambling-related activities, as 
                applicable. The procedures described in paragraph 
                (3)(D) shall apply to actions brought under this 
                subparagraph, and the relief in such actions shall be 
                limited to--
                            ``(i) an order requiring the provider to 
                        remove or disable access to the advertising or 
                        promotion of non-Internet gambling activity 
                        that violates Federal law, or the law of the 
                        State in which such activity is conducted, as 
                        applicable, at a particular online site 
                        residing on a computer server controlled or 
                        operated by the provider;
                            ``(ii) an order restraining the provider 
                        from providing access to an identified 
                        subscriber of the system or network of the 
                        provider, if the court determines that such 
                        subscriber maintains a website on a computer 
                        server controlled or operated by the provider 
                        that the subscriber is knowingly using or 
                        knowingly permitting to be used to advertise or 
                        promote non-Internet gambling activity that 
                        violates Federal law or the law of the State in 
                        which such activity is conducted; and
                            ``(iii) an order restraining the provider 
                        of the content of the advertising or promotion 
                        of such illegal gambling activity from 
                        disseminating such advertising or promotion on 
                        the computer server controlled or operated by 
                        the provider of such interactive computer 
                        service.
                    ``(E) Applicability.--The provisions of 
                subparagraphs (C) and (D) do not apply to the content 
                described in subparagraph (B)(i)(II).
            ``(5) Effect on other law.--
                    ``(A) Immunity from liability for compliance.--An 
                interactive computer service provider shall not be 
                liable for any damages, penalty, or forfeiture, civil 
                or criminal, under Federal or State law for taking in 
                good faith any action described in paragraphs (2)(A), 
                (4)(B)(ii)(I), or (4)(C) to comply with a notice 
                described in paragraph (2)(B), or complying with any 
                court order issued under paragraph (3) or (4)(D).
                    ``(B) Disclaimer of obligations.--Nothing in this 
                section may be construed to impose or authorize an 
                obligation on an interactive computer service provider 
                described in paragraph (1)(B)--
                            ``(i) to monitor material or use of its 
                        service; or
                            ``(ii) except as required by a notice or an 
                        order of a court under this subsection, to gain 
                        access to, to remove, or to disable access to 
                        material.
                    ``(C) Rights of subscribers.--Nothing in this 
                section may be construed to prejudice the right of a 
                subscriber to secure an appropriate determination, as 
                otherwise provided by law, in a Federal court or in a 
                State or local tribunal or agency, that the account of 
                such subscriber should not be terminated pursuant to 
                this subsection, or should be restored.
    ``(e) Availability of Relief.--The availability of relief under 
subsections (c) and (d) shall not depend on, or be affected by, the 
initiation or resolution of any action under subsection (b), or under 
any other provision of Federal or State law.
    ``(f) Applicability.--
            ``(1) In general.--Subject to paragraph (2), the 
        prohibition in this section does not apply to--
                    ``(A) any otherwise lawful bet or wager that is 
                placed and received, or otherwise made wholly 
                intrastate for a State lottery, or for a multi-State 
                lottery operated jointly between 2 or more States in 
                conjunction with State lotteries if--
                            ``(i) each such lottery is expressly 
                        authorized, and licensed or regulated, under 
                        applicable State law;
                            ``(ii) the bet or wager is placed on an 
                        interactive computer service that uses a 
                        private network or a closed-loop subscriber 
                        based service regulated and operated by the 
                        State lottery or its expressly designated agent 
                        for such activity;
                            ``(iii) each person placing or otherwise 
                        making that bet or wager is physically located 
                        when such bet or wager is placed at a facility 
                        that is open to the general public; and
                            ``(iv) each such lottery complies with 
                        sections 1301 through 1304, and other 
                        applicable provisions of Federal law;
                    ``(B) any otherwise lawful bet or wager that is 
                placed, received, or otherwise made on an interstate or 
                intrastate basis on a live horse or a live dog race or 
                on jai alai, or the sending, receiving, or inviting of 
                information assisting in the placing of such a bet or 
                wager, if such bet or wager, or the transmission of 
                such information, as applicable, is--
                            ``(i) expressly authorized, and licensed or 
                        regulated by the State in which such bet or 
                        wager is received, under applicable Federal and 
                        such State's laws;
                            ``(ii) placed on a closed-loop subscriber-
                        based service;
                            ``(iii) initiated from a State in which 
                        betting or wagering on that same type of live 
                        horse or live dog racing or on jai alai is 
                        lawful and received in a State in which such 
                        betting or wagering is lawful;
                            ``(iv) subject to the regulatory oversight 
                        of the State in which the bet or wager is 
                        received and subject by such State to minimum 
                        control standards for the accounting, 
                        regulatory inspection, and auditing of all such 
                        bets or wagers transmitted from 1 State to 
                        another; and
                            ``(v) in the case of--
                                    ``(I) live horse racing, made in 
                                accordance with the Interstate Horse 
                                Racing Act of 1978 (15 U.S.C. 3001 et 
                                seq.) and the requirements, if any, 
                                established by an appropriate 
                                legislative or regulatory body of the 
                                State in which the bet or wager 
                                originates;
                                    ``(II) live dog racing, subject to 
                                regulatory consent agreements that are 
                                comparable to those required by the 
                                Interstate Horse Racing Act of 1978, 
                                and the requirements, if any, 
                                established by an appropriate 
                                legislative or regulatory body of the 
                                State in which the bet or wager 
                                originates; or
                                    ``(III) live jai alai, subject to 
                                regulatory consent agreements that are 
                                comparable to those required by the 
                                Interstate Horse Racing Act of 1978, 
                                and the requirements, if any, 
                                established by an appropriate 
                                legislative or regulatory body of the 
                                State in which the bet or wager 
                                originates;
                    ``(C) any otherwise lawful bet or wager that is 
                placed, received, or otherwise made wholly intrastate, 
                or the sending, receiving, or inviting of information 
                assisting in the placing of such a bet or wager, if 
                such bet or wager, or the transmission of such 
                information, as applicable is--
                            ``(i) expressly authorized, and licensed or 
                        regulated by the State in which such bet or 
                        wager is initiated and received, under  
applicable Federal and such State's laws; and
                            ``(ii) placed on a closed-loop subscriber 
                        based service; or
                    ``(D) any otherwise lawful bet or wager that is--
                            ``(i) placed on a closed-loop subscriber 
                        based service or a private network; and
                            ``(ii) is lawfully received by a federally 
                        recognized Indian tribe, or the sending, 
                        receiving, or inviting of information assisting 
                        in the placing of any such bet or wager, if the 
                        game is permitted under and conducted in 
                        accordance with the Indian Gaming Regulatory 
                        Act, so long as each person placing, receiving, 
                        or otherwise making such a bet or wager, or 
                        transmitting such information, is physically 
                        located on Indian lands (as that term is 
                        defined in section 4 of the Indian Gaming 
                        Regulatory Act) when such person places, 
                        receives, or otherwise makes the bet or wager.
            ``(2) Bets or wagers made by agents or proxies.--
                    ``(A) In general.--Paragraph (1) does not apply in 
                any case in which a bet or wager is placed, received, 
                or otherwise made by the use of an agent or proxy using 
                the Internet or an interactive computer service.
                    ``(B) Qualification.--Nothing in this paragraph may 
                be construed to prohibit the owner operator of a 
                parimutuel wagering facility that is licensed by a 
                State from employing an agent in the operation of the 
                account wagering system owned or operated by the 
                parimutuel facility.
            ``(3) Advertising and promotion.--The prohibition of 
        subsection (b)(1)(B) does not apply to advertising, promotion, 
        or other communication by, or authorized by, anyone licensed to 
        operate a gambling business in a State.
    ``(g) Rule of Construction.--Nothing in this section may be 
construed to affect any prohibition or remedy applicable to a person 
engaged in a gambling business under any other provision of Federal or 
State law.''.
    (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. 3. REPORT ON ENFORCEMENT.

    Not later than 3 years after the date of enactment of this Act, the 
Attorney General shall submit to Congress a report, which shall 
include--
            (1) an analysis of the problems, if any, associated with 
        enforcing section 1085 of title 18, United States Code, as 
        added by section 2 of this Act;
            (2) recommendations for the best use of the resources of 
        the Department of Justice to enforce that section; and
            (3) an estimate of the amount of activity and money being 
        used to gamble on the Internet.

SEC. 4. SEVERABILITY.

    If any provision of this Act, an amendment made by this Act, or the 
application of such provision or amendment to any person or 
circumstance is held to be unconstitutional, the remainder of this Act, 
the amendments made by this Act, and the application of this Act and 
the provisions of such amendments to any other person or circumstance 
shall not be affected thereby.




                                                 Union Calendar No. 389

106th CONGRESS

  2d Session

                               H. R. 3125

                      [Report No. 106-655, Part I]

_______________________________________________________________________

                                 A BILL

         To prohibit Internet gambling, and for other purposes.

_______________________________________________________________________

                             June 23, 2000

  Committee on Commerce discharged; committed to the Committee of the 
    Whole House on the State of the Union and ordered to be printed