[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 692 Reported in Senate (RS)]





                                                       Calendar No. 158

106th CONGRESS

  1st Session

                                 S. 692

_______________________________________________________________________

                                 A BILL

         To prohibit Internet gambling, and for other purposes.

_______________________________________________________________________

                             June 17, 1999

                       Reported with an amendment





                                                       Calendar No. 158
106th CONGRESS
  1st Session
                                 S. 692

         To prohibit Internet gambling, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 23, 1999

  Mr. Kyl (for himself, Mr. Bryan, Mr. Grassley, Mrs. Feinstein, Mr. 
 Gorton, Mr. Enzi, Mr. Nickles, Mr. Thurmond, Mr. Mack, Mr. Coverdell, 
Mr. Santorum, Mr. Reid, Mr. Smith of New Hampshire, Mr. Hutchinson, Mr. 
Allard, Mr. Bond, Mr. Lott, Mr. Johnson, Mr. Voinovich, Mr. DeWine, Mr. 
 Brownback, Mr. Bunning, and Mr. Torricelli) introduced the following 
    bill; which was read twice and referred to the Committee on the 
                               Judiciary

                             June 17, 1999

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

_______________________________________________________________________

                                 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,

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

<DELETED>    This Act may be cited as the ``Internet Gambling 
Prohibition Act of 1999''.</DELETED>

<DELETED>SEC. 2. PROHIBITION ON INTERNET GAMBLING.</DELETED>

<DELETED>    (a) In General.--Chapter 50 of title 18, United States 
Code, is amended by adding at the end the following:</DELETED>
<DELETED>``Sec. 1085. Internet gambling</DELETED>
<DELETED>    ``(a) Definitions.--In this section:</DELETED>
        <DELETED>    ``(1) 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 others, a sporting event, or a game of 
                chance, upon an agreement or understanding that the 
                person or another person will receive something of 
                value based on that outcome;</DELETED>
                <DELETED>    ``(B) includes the purchase of a chance or 
                opportunity to win a lottery or other prize (which 
                opportunity to win is predominantly subject to 
                chance);</DELETED>
                <DELETED>    ``(C) includes any scheme of a type 
                described in section 3702 of title 28, United States 
                Code; and</DELETED>
                <DELETED>    ``(D) 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 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);</DELETED>
                        <DELETED>    ``(iii) a contract of indemnity or 
                        guarantee; or</DELETED>
                        <DELETED>    ``(iv) a contract for life, 
                        health, or accident insurance.</DELETED>
        <DELETED>    ``(2) Closed-loop subscriber-based service.--The 
        term `closed-loop subscriber-based service' means any 
        information service or system that uses--</DELETED>
                <DELETED>    ``(A) a device or combination of devices--
                </DELETED>
                        <DELETED>    ``(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 (d)(1)(B); and</DELETED>
                        <DELETED>    ``(ii) by which a person located 
                        within any State must subscribe 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;</DELETED>
                <DELETED>    ``(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</DELETED>
                <DELETED>    ``(C) appropriate data security standards 
                to prevent unauthorized access by any person who has 
                not subscribed or who is a minor.</DELETED>
        <DELETED>    ``(3) Foreign jurisdiction.--The term `foreign 
        jurisdiction' means a jurisdiction of a foreign country or 
        political subdivision thereof.</DELETED>
        <DELETED>    ``(4) Gambling business.--The term `gambling 
        business' means a business that is conducted at a gambling 
        establishment, or that--</DELETED>
                <DELETED>    ``(A) involves--</DELETED>
                        <DELETED>    ``(i) the placing, receiving, or 
                        otherwise making of bets or wagers; 
                        or</DELETED>
                        <DELETED>    ``(ii) the offering to engage in 
                        the placing, receiving, or otherwise making of 
                        bets or wagers;</DELETED>
                <DELETED>    ``(B) involves 1 or more persons who 
                conduct, finance, manage, supervise, direct, or own all 
                or part of such business; and</DELETED>
                <DELETED>    ``(C) 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.</DELETED>
        <DELETED>    ``(5) Information assisting in the placing of a 
        bet or wager.--The term `information assisting in the placing 
        of a bet or wager'--</DELETED>
                <DELETED>    ``(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 
                accept or place a bet or wager; and</DELETED>
                <DELETED>    ``(B) does not include--</DELETED>
                        <DELETED>    ``(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;</DELETED>
                        <DELETED>    ``(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;</DELETED>
                        <DELETED>    ``(iii) information exchanged 
                        exclusively between or among 1 or more wagering 
                        facilities that are located within a single 
                        State and are licensed and regulated by that 
                        State, 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 applicable State law;</DELETED>
                        <DELETED>    ``(iv) any news reporting or 
                        analysis of wagering activity, including odds, 
                        racing or event results, race and event 
                        schedules, or categories of wagering; 
                        or</DELETED>
                        <DELETED>    ``(v) any posting or reporting of 
                        any educational information on how to make a 
                        bet or wager or the nature of betting or 
                        wagering.</DELETED>
        <DELETED>    ``(6) Interactive computer service.--The term 
        `interactive computer service' means any information service, 
        system, or access software provider that uses a public 
        communication infrastructure or operates in interstate or 
        foreign commerce to provide or enable computer access by 
        multiple users to a computer server, including specifically a 
        service or system that provides access to the 
        Internet.</DELETED>
        <DELETED>    ``(7) Internet.--The term `Internet' means the 
        international computer network of both Federal and non-Federal 
        interoperable packet switched data networks.</DELETED>
        <DELETED>    ``(8) Person.--The term `person' means any 
        individual, association, partnership, joint venture, 
        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, United States Code)).</DELETED>
        <DELETED>    ``(9) Private network.--The term `private network' 
        means a communications channel or channels, including voice or 
        computer data transmission facilities, that use either--
        </DELETED>
                <DELETED>    ``(A) private dedicated lines; 
                or</DELETED>
                <DELETED>    ``(B) the public communications 
                infrastructure, if the infrastructure is secured by 
                means of the appropriate private communications 
                technology to prevent unauthorized access.</DELETED>
        <DELETED>    ``(10) 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.</DELETED>
        <DELETED>    ``(11) Subscriber.--The term `subscriber'--
        </DELETED>
                <DELETED>    ``(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</DELETED>
                <DELETED>    ``(B) includes registrants, students who 
                are granted access to a university system or network, 
                and employees who are granted access to the system or 
                network of their employer.</DELETED>
<DELETED>    ``(b) Gambling Businesses.--</DELETED>
        <DELETED>    ``(1) Prohibition.--Subject to subsection (d), it 
        shall be unlawful for a person engaged in a gambling business 
        to use the Internet or any other interactive computer service--
        </DELETED>
                <DELETED>    ``(A) to place, receive, or otherwise make 
                a bet or wager; or</DELETED>
                <DELETED>    ``(B) to send, receive, or invite 
                information assisting in the placing of a bet or 
                wager.</DELETED>
        <DELETED>    ``(2) Penalties.--A person engaged in a gambling 
        business who violates paragraph (1) shall be--</DELETED>
                <DELETED>    ``(A) fined in an amount equal to not more 
                than the greater of--</DELETED>
                        <DELETED>    ``(i) the amount that such person 
                        received in bets or wagers as a result of 
                        engaging in that business in violation of this 
                        subsection; or</DELETED>
                        <DELETED>    ``(ii) $20,000;</DELETED>
                <DELETED>    ``(B) imprisoned not more than 4 years; 
                or</DELETED>
                <DELETED>    ``(C) both.</DELETED>
<DELETED>    ``(c) Permanent Injunctions.--Upon conviction of a person 
under this section, the court may, as an additional penalty, enter a 
permanent injunction enjoining the transmission of bets or wagers or 
information assisting in the placing of a bet or wager.</DELETED>
<DELETED>    ``(d) Applicability.--</DELETED>
        <DELETED>    ``(1) In general.--Subject to paragraph (2), the 
        prohibition in this section does not apply to--</DELETED>
                <DELETED>    ``(A) any otherwise lawful bet or wager 
                that is placed, 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--</DELETED>
                        <DELETED>    ``(i) each such lottery is 
                        expressly authorized, and licensed or 
                        regulated, under applicable State 
                        law;</DELETED>
                        <DELETED>    ``(ii) the bet or wager is placed 
                        on an interactive computer service that uses a 
                        private network;</DELETED>
                        <DELETED>    ``(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</DELETED>
                        <DELETED>    ``(iv) each such lottery complies 
                        with sections 1301 through 1304 of title 18, 
                        United States Code, and other applicable 
                        provisions of Federal law;</DELETED>
                <DELETED>    ``(B) any otherwise lawful bet or wager 
                that is placed, received, or otherwise made on an 
                interstate or intrastate basis on a live horse race, or 
                the sending, receiving, or inviting of information 
                assisting in the placing of such a bet or wager, if 
                such bet or wager, or the transmission of such 
                information, as applicable, is--</DELETED>
                        <DELETED>    ``(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;</DELETED>
                        <DELETED>    ``(ii) placed on a closed-loop 
                        subscriber-based service;</DELETED>
                        <DELETED>    ``(iii) initiated from a State in 
                        which betting or wagering on that same type of 
                        live horse racing is lawful and received in a 
                        State in which such betting or wagering is 
                        lawful;</DELETED>
                        <DELETED>    ``(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</DELETED>
                        <DELETED>    ``(v) made in accordance with the 
                        Interstate Horse Racing Act of 1978 (15 U.S.C. 
                        3001 et seq.); or</DELETED>
                <DELETED>    ``(C) any otherwise lawful bet or wager 
                that is placed, received, or otherwise made for a 
                fantasy sports league game or contest.</DELETED>
        <DELETED>    ``(2) Inapplicability to bets or wagers made by 
        agents or proxies.--</DELETED>
                <DELETED>    ``(A) In general.--Paragraph (1)(A) 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.</DELETED>
                <DELETED>    ``(B) Rule of construction.--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.''.</DELETED>
<DELETED>    (b) Technical Amendment.--The analysis for chapter 50 of 
title 18, United States Code, is amended by adding at the end the 
following:</DELETED>

<DELETED>``1085. Internet gambling.''.

<DELETED>SEC. 3. CIVIL REMEDIES.</DELETED>

<DELETED>    (a) In General.--</DELETED>
        <DELETED>    (1) Jurisdiction.--The district courts of the 
        United States shall have original, exclusive, and continuing 
        jurisdiction to prevent and restrain violations of section 1085 
        of title 18, United States Code, as added by section 2 of this 
        Act, by issuing appropriate orders in accordance with this 
        section, regardless of whether a prosecution has been initiated 
        under that section.</DELETED>
        <DELETED>    (2) Proceedings.--</DELETED>
                <DELETED>    (A) Institution by federal government.--
                </DELETED>
                        <DELETED>    (i) In general.--The United States 
                        may institute proceedings under this subsection 
                        to prevent or restrain a violation of section 
                        1085 of title 18, United States Code.</DELETED>
                        <DELETED>    (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 a violation of section 1085 
                        of title 18, United States Code, 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.</DELETED>
                <DELETED>    (B) Institution by state attorney 
                general.--</DELETED>
                        <DELETED>    (i) In general.--The attorney 
                        general of a State (or other appropriate State 
                        official) in which a violation of section 1085 
                        of title 18, United States Code, is alleged to 
                        have occurred, or may occur, after providing 
                        written notice to the United States, may 
                        institute proceedings under this subsection to 
                        prevent or restrain the violation, unless the 
                        United States has exclusive jurisdiction over 
                        the violation under Federal law.</DELETED>
                        <DELETED>    (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 a violation of 
                        section 1085 of title 18, United States Code, 
                        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.</DELETED>
                <DELETED>    (C) 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 
                injunction that the United States or the State, as 
                applicable, will not seek a permanent 
                injunction.</DELETED>
        <DELETED>    (3) Expedited proceedings.--</DELETED>
                <DELETED>    (A) In general.--In addition to any 
                proceeding under paragraph (2), a district court may 
                enter a temporary restraining order against a person 
                alleged to be in violation of section 1085 of title 18, 
                United States Code, upon application of the United 
                States under paragraph (2)(A) of this subsection, or 
                the attorney general (or other appropriate State 
                official) of an affected State under paragraph (2)(B) 
                of this subsection, without notice and the opportunity 
                for a hearing, 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 section 
                1085 of title 18, United States Code.</DELETED>
                <DELETED>    (B) Expiration.--A temporary restraining 
                order entered under this paragraph shall expire on the 
                earlier of--</DELETED>
                        <DELETED>    (i) the expiration of the 30-day 
                        period beginning on the date on which the order 
                        is entered; or</DELETED>
                        <DELETED>    (ii) the date on which a 
                        preliminary injunction is granted or 
                        denied.</DELETED>
                <DELETED>    (C) Hearings.--A hearing requested 
                concerning an order entered under this paragraph shall 
                be held at the earliest practicable time.</DELETED>
<DELETED>    (b) Interactive Computer Service Providers.--</DELETED>
        <DELETED>    (1) Eligibility.--For purposes of this subsection, 
        an interactive computer service provider is described in this 
        paragraph only if the provider has established and reasonably 
        implements a policy that provides for the termination of the 
        account of a subscriber of the service system or network of the 
        provider upon the receipt by the provider of a notice described 
        in paragraph (4)(B).</DELETED>
        <DELETED>    (2) Use of facilities or services.--Nothing in 
        section 1085 of title 18, United States Code, may be 
        constructed to impose, or to provide any basis for, liability 
        against an interactive computer service provider described in 
        paragraph (1) whose facilities or services are used by another 
        person to engage in an activity prohibited by that section--
        </DELETED>
                <DELETED>    (A) arising out of any transmitting, 
                routing, or providing of connections for the material 
                or activity (including intermediate and temporary 
                storage in the course of such transmitting, routing, or 
                providing connections) by the provider, if--</DELETED>
                        <DELETED>    (i) the material or activity was 
                        initiated by or at the direction of a person 
                        other than the provider;</DELETED>
                        <DELETED>    (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;</DELETED>
                        <DELETED>    (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</DELETED>
                        <DELETED>    (iv) the material or activity is 
                        transmitted through the system or network of 
                        the provider without modification of its 
                        content; or</DELETED>
                <DELETED>    (B) with respect to material or activity 
                at an online site residing on a computer server owned, 
                controlled, or operated by or for the provider, unless 
                the provider fails to comply within a reasonable time 
                with a notification under paragraph (4) with respect to 
                the particular material or activity at issue.</DELETED>
        <DELETED>    (3) Protection of privacy.--Nothing in this 
        section or in section 1085 of title 18, United States Code, may 
        be construed to impose or authorize an obligation on an 
        interactive computer service described in paragraph (1) to--
        </DELETED>
                <DELETED>    (A) monitor material or use of its 
                service; or</DELETED>
                <DELETED>    (B) except as required by an order of a 
                court, to gain access to, to remove, or to disable 
                access to material in any case in which such conduct is 
                prohibited by law.</DELETED>
        <DELETED>    (4) Notice to interactive computer service 
        providers.--</DELETED>
                <DELETED>    (A) In general.--If an interactive 
                computer service provider receives from a Federal or 
                State law enforcement agency, acting within its 
                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 to 
                violate section 1085 of title 18, United States Code, 
                the provider shall not be liable under any Federal or 
                State law if, in a reasonably expeditious manner--
                </DELETED>
                        <DELETED>    (i) the provider removes or 
                        disables access to the material or activity 
                        residing at that online site that allegedly 
                        violates that section; or</DELETED>
                        <DELETED>    (ii) if the provider does not own, 
                        operate, or control the site at which the 
                        subject material or activity resides, the 
                        provider notifies the Federal or State law 
                        enforcement agency that--</DELETED>
                                <DELETED>    (I) the provider is not 
                                the proper recipient of such notice; 
                                and</DELETED>
                                <DELETED>    (II) upon receipt of a 
                                subpoena, the provider will cooperate 
                                with the Federal or State law 
                                enforcement agency in identifying the 
                                person or persons who control the 
                                site.</DELETED>
                <DELETED>    (B) Notice.--A notice is described in this 
                subparagraph if it--</DELETED>
                        <DELETED>    (i) identifies the material or 
                        activity that allegedly violates section 1085 
                        of title 18, United States Code;</DELETED>
                        <DELETED>    (ii) provides information 
                        reasonably sufficient to permit the provider to 
                        locate the material or activity;</DELETED>
                        <DELETED>    (iii) is supplied to any agent of 
                        a provider designated under section 512 of 
                        title 17, United States Code, if information 
                        regarding such designation is readily available 
                        to the public; and</DELETED>
                        <DELETED>    (iv) provides information that is 
                        reasonably sufficient to permit the provider to 
                        contact the law enforcement agency that issued 
                        the notice, including--</DELETED>
                                <DELETED>    (I) the name of the law 
                                enforcement agency; and</DELETED>
                                <DELETED>    (II) 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.</DELETED>
        <DELETED>    (5) Injunctive relief.--</DELETED>
                <DELETED>    (A) In general.--Except as provided in 
                subparagraph (B), a Federal or State law enforcement 
                agency acting within its jurisdiction, may, following 
                the issuance of a notice to an interactive computer 
                service provider under paragraph (4), in a civil 
                action, obtain an injunction or other appropriate 
                relief to prevent the use of the interactive computer 
                service in violation of Federal or State law.</DELETED>
                <DELETED>    (B) Other limitations.--In the case of any 
                application for an injunction against an interactive 
                computer service provider to prevent a violation of 
                section 1085 of title 18, United States Code--
                </DELETED>
                        <DELETED>    (i) arising out of the 
                        transmitting, routing, or providing of 
                        connections by the provider for material or 
                        activity that is prohibited by section 1085 of 
                        title 18, United States Code, or performing the 
                        intermediate and temporary storage of such 
                        material or activity in the course of such 
                        transmitting, routing, or providing of 
                        connections, the injunctive relief is limited 
                        to--</DELETED>
                                <DELETED>    (I) an order restraining 
                                the provider from providing access to 
                                an identified subscriber of the system 
                                or network of the interactive computer 
                                service provider, who is using that 
                                access to violate section 1085 of title 
                                18, United States Code (or whose use of 
                                that access involves a violation of 
                                section 1085 of title 18, United States 
                                Code, by another person), by 
                                terminating the specified account of 
                                that subscriber; and</DELETED>
                                <DELETED>    (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;</DELETED>
                        <DELETED>    (ii) with respect to conduct other 
                        than that which qualifies for the limitation on 
                        remedies set forth in clause (i), the 
                        injunctive relief is limited to--</DELETED>
                                <DELETED>    (I) an order restraining 
                                the provider from providing access to a 
                                material or activity that violates 
                                section 1085 of title 18, United States 
                                Code, at a particular online site 
                                residing on a computer server, owned, 
                                operated, or controlled by the 
                                provider;</DELETED>
                                <DELETED>    (II) an order restraining 
                                the provider from providing access to a 
                                subscriber of the system or network of 
                                the interactive computer service, who 
                                is identified in the order and who is 
                                using such service in violation of 
                                section 1085 of title 18, United States 
                                Code, by terminating the specified 
                                account of that subscriber; 
                                or</DELETED>
                                <DELETED>    (III) such other 
                                injunctive remedies as the court 
                                considers necessary to prevent or 
                                restrain access to specified material 
                                or activity that is prohibited by 
                                section 1085 of title 18, United States 
                                Code, at a particular online location 
                                residing on a computer server owned, 
                                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.</DELETED>
                <DELETED>    (C) Considerations.--The court, in 
                determining appropriate injunctive relief under this 
                paragraph, shall consider--</DELETED>
                        <DELETED>    (i) whether such an injunction, 
                        either alone or in combination with other such 
                        injunctions issued against the same provider 
                        (under section 1085 of title 18, United States 
                        Code, or under this section) would 
                        significantly burden either the provider or the 
                        operation of the system or network of the 
                        provider;</DELETED>
                        <DELETED>    (ii) whether implementation of 
                        such an injunction would be technically 
                        feasible and effective, and would not 
                        unreasonably interfere with access to lawful 
                        material at other online locations;</DELETED>
                        <DELETED>    (iii) whether other less 
                        burdensome and comparably effective means of 
                        preventing or restraining access to the illegal 
                        material or activity are available; 
                        and</DELETED>
                        <DELETED>    (iv) the magnitude of the harm 
                        likely to be suffered by the community if the 
                        injunction is not granted.</DELETED>
                <DELETED>    (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.</DELETED>
        <DELETED>    (6) Effect on other law.--</DELETED>
                <DELETED>    (A) Preemption of state law.--An 
                interactive computer service provider described in 
                paragraph (1) shall not be liable under any State law 
                prohibiting or regulating gambling, or subject to any 
                injunctive relief under any such State law, in 
                connection with the use of the interactive computer 
                service of that provider by any person in interstate or 
                affecting commerce.</DELETED>
                <DELETED>    (B) Immunity from liability.--In the 
                absence of fraud or bad faith, an interactive computer 
                service provider described in paragraph (1) shall not 
                be liable for any damages, penalty, or forfeiture, 
                civil or criminal, under Federal or State law for--
                </DELETED>
                        <DELETED>    (i) taking any action described in 
                        paragraph (1) or paragraph 4(A) to comply with 
                        a notice described in paragraph (4)(B); 
                        or</DELETED>
                        <DELETED>    (ii) complying with any court 
                        order issued under paragraph (5).</DELETED>
<DELETED>    (c) Relationship to Other Remedies.--</DELETED>
        <DELETED>    (1) In general.--Except as provided in subsection 
        (b)(6), nothing in this section may be construed to affect any 
        remedy under section 1085 of title 18, United States Code, or 
        under any other provision of Federal or State law.</DELETED>
        <DELETED>    (2) Availability of relief.--The availability of 
        relief under this section shall not depend on, or be affected 
        by, the initiation or resolution of any action under section 
        1085 of title 18, United States Code, or under any other 
        provision of Federal or State law.</DELETED>

<DELETED>SEC. 4. RULE OF CONSTRUCTION.</DELETED>

<DELETED>    Except as provided in section 3(b)(6) of this Act, nothing 
in this Act or in section 1085 of title 18, United States Code, as 
added by section 2 of this Act, may be construed otherwise to affect 
any prohibition or remedy relating to gambling that is imposed under 
any other provision of Federal or State law.</DELETED>

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

<DELETED>    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--</DELETED>
        <DELETED>    (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;</DELETED>
        <DELETED>    (2) recommendations for the best use of the 
        resources of the Department of Justice to enforce that section; 
        and</DELETED>
        <DELETED>    (3) an estimate of the amount of activity and 
        money being used to gamble on the Internet.</DELETED>

<DELETED>SEC. 6. SEVERABILITY.</DELETED>

<DELETED>    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 uncon- 
stitutional, the remainder of this Act, the amendments made by this 
Act, and the application of the provisions of such to any person or 
circumstance shall not be affected thereby.</DELETED>

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Internet Gambling Prohibition Act of 
1999''.

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:
            ``(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 of chance, upon an 
                agreement or understanding that the person or another 
                person will receive something of value based on that 
                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; or
                            ``(iv) a contract for life, health, or 
                        accident insurance.
            ``(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 located within a single State and are 
                        licensed and regulated by that State, 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 applicable 
                        State 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, 
        including specifically a service or system that provides access 
        to the Internet.
            ``(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.
    ``(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 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) 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 paragraph (2)(A) to 
                comply with a notice described in paragraph (2)(B), or 
                complying with any court order issued under paragraph 
                (3).
                    ``(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, 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;
                            ``(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 
                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 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.); or
                                    ``(II) live dog racing, subject to 
                                consent agreements that are comparable 
                                to those required by the Interstate 
                                Horse Racing Act of 1978, approved by 
                                the appropriate State regulatory 
                                agencies, in the State receiving the 
                                signal, and in the State in which the 
                                bet or wager originates; or
                    ``(C) any otherwise lawful bet or wager that is 
                placed, received, or otherwise made for a fantasy 
                sports league game or contest.
            ``(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 or promotion 
        of any activity that is not prohibited by subsection (b)(1)(A).
    ``(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.