[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3215 Reported in House (RH)]

                                                 Union Calendar No. 356
107th CONGRESS
  2d Session
                                H. R. 3215

                      [Report No. 107-591, Part I]

  To amend title 18, United States Code, to expand and modernize the 
    prohibition against interstate gambling, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            November 1, 2001

   Mr. Goodlatte (for himself, Mr. Boucher, Mr. Smith of Texas, Ms. 
Jackson-Lee of Texas, Mr. Oxley, Mr. LaFalce, Mr. Leach, Mr. Wolf, Mr. 
  Roemer, Mr. Gibbons, Mr. Bachus, Mrs. Jo Ann Davis of Virginia, Mr. 
 Duncan, Mr. Fletcher, Mr. Forbes, Mr. Goode, Mr. Graham, Mr. Lewis of 
Kentucky, Mr. Pitts, Mr. Rogers of Michigan, Mr. Shadegg, Mr. Sweeney, 
 Mr. Tauzin, Mr. Vitter, Mr. Wamp, Mr. Peterson of Pennsylvania, Mrs. 
  Kelly, and Mr. Hastings of Florida) introduced the following bill; 
          which was referred to the Committee on the Judiciary

                             July 18, 2002

Reported with an amendment and referred to the Committee on Energy and 
    Commerce for a period ending not later than July 19, 2002, 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]

                             July 19, 2002

   Additional sponsors: Mr. Ehlers, Mr. Ballenger, Mr. Tancredo, Mr. 
 Stump, Mr. Callahan, Mr. Brown of South Carolina, Mr. Culberson, Mr. 
   Boehlert, Mr. LaTourette, Mr. Coble, Mr. Lipinski, Mr. DeLay, Mr. 
   Foley, Mr. LaHood, Mr. Baker, Mr. Riley, Mr. Everett, Mr. Deal of 
   Georgia, Mr. Collins, Mr. Johnson of Illinois, Mr. Reynolds, Mr. 
Combest, Mr. Terry, Mr. Hansen, Mr. Nethercutt, Ms. Pryce of Ohio, Mr. 
 Pence, Ms. Hart, Mr. Keller, Mr. Hostettler, Mr. Pickering, Mr. Akin, 
  Mr. Bass, Mr. Wicker, Mrs. Northup, Mr. Jeff Miller of Florida, Mr. 
  Crenshaw, Mr. McInnis, Mr. Bartlett of Maryland, Mrs. Roukema, Mr. 
Peterson of Minnesota, Mr. Horn, Mr. Herger, Mr. Manzullo, Mr. Jones of 
   North Carolina, Mr. Thomas, Mr. Quinn, Mr. Walden of Oregon, Mr. 
  Norwood, Mr. Shimkus, Mrs. Johnson of Connecticut, Mrs. Capito, Mr. 
McKeon, Mr. Gilman, Mr. Boehner, Mr. Diaz-Balart, Mrs. Napolitano, Mr. 
Walsh, Mr. Gutknecht, Mr. Hayes, Mr. Grucci, Mr. Isakson, Mr. Schrock, 
  Mrs. Myrick, Mr. Young of Alaska, Mr. Ryun of Kansas, Mr. King, Mr. 
 Gillmor, Mr. Souder, Mr. Watts of Oklahoma, Mr. Watkins, Mr. Smith of 
   New Jersey, Mr. Berry, Mr. Hobson, Mr. Hyde, Mr. Cunningham, Mr. 
    Stenholm, Mr. Shaw, Mr. DeMint, Mr. Bereuter, Mr. Sessions, Mr. 
   Largent, Mr. Ramstad, Mr. McCrery, Mr. Dan Miller of Florida, Mr. 
 Taylor of North Carolina, Mrs. Emerson, Mr. Frelinghuysen, Mr. Taylor 
    of Mississippi, Mr. Gilchrest, Mr. Price of North Carolina, Mr. 
Shuster, Mr. Lewis of California, Mr. Regula, Mr. Simmons, Mr. Istook, 
   Mr. Goss, Mr. Barcia, Mr. Rehberg, Mr. Thornberry, Mr. Burton of 
Indiana, Mr. Whitfield, Mr. Hefley, Mr. Lucas of Kentucky, Mr. Edwards, 
  Mr. Ganske, Mr. Bilirakis, Mr. Chambliss, Mr. Saxton, Mr. Weldon of 
   Florida, Mr. Linder, Ms. Dunn, Mr. Gekas, Mr. Brady of Texas, Mr. 
 Tiahrt, Ms. Ros-Lehtinen, Mr. Cooksey, Mrs. Morella, Mr. Turner, Mr. 
Sandlin, Mr. Spratt, Mr. Osborne, Mr. Nussle, Mr. Kennedy of Minnesota, 
 Mr. McIntyre, Mr. Moran of Virginia, Mr. Barr of Georgia, Mr. Latham, 
                             and Mr. Putnam
 Deleted sponsors: Mr. Gibbons (added November 1, 2001; deleted March 
12, 2002), and Mr. Green of Wisconsin (added December 6, 2001; deleted 
                             May 15, 2002)

                             July 19, 2002

Committee on Energy and 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 
                           November 1, 2001]

_______________________________________________________________________

                                 A BILL


 
  To amend title 18, United States Code, to expand and modernize the 
    prohibition against interstate 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 ``Combating Illegal Gambling Reform 
and Modernization Act''.

SEC. 2. DEFINITIONS.

    Section 1081 of title 18, United States Code, is amended--
            (1) by designating the five undesignated paragraphs that 
        begin with ``The term'' as paragraphs (1) through (5), 
        respectively;
            (2) in paragraph (5), as so designated--
                    (A) by striking ``wire communication'' and 
                inserting ``communication'';
                    (B) by inserting ``satellite, microwave,'' after 
                ``cable,''; and
                    (C) by inserting ``(whether fixed or mobile)'' 
                after ``connection''; and
            (3) by adding at the end the following:
            ``(6) The term `bets or wagers'--
                    ``(A) means the staking or risking by any person of 
                something of value upon the outcome of a contest of 
                others, a sporting event, or a game predominantly 
                subject to chance, not skill, 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); 
                and
                    ``(C) does not include--
                            ``(i) a bona fide business transaction 
                        governed by the securities laws (as that term 
                        is defined in section 3(a)(47) of the 
                        Securities Exchange Act of 1934 (15 U.S.C. 
                        78c(a)(47))) for the purchase or sale at a 
                        future date of securities (as that term is 
                        defined in section 3(a)(10) of the Securities 
                        Exchange Act of 1934 (15 U.S.C. 78c(a)(10)));
                            ``(ii) a 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) or to any transaction subject to an 
                        exemption pursuant to section 4(c) of such Act;
                            ``(iii) any over-the-counter derivative 
                        instrument;
                            ``(iv) a contract of indemnity or 
                        guarantee;
                            ``(v) a contract for life, health, or 
                        accident insurance;
                            ``(vi) participation in any game or contest 
                        in which participants do not stake or risk 
                        anything of value other than--
                                    ``(I) personal efforts of the 
                                participants in playing the game or 
                                contest or obtaining access to the 
                                Internet; or
                                    ``(II) point or credits that the 
                                sponsor of the game or contest provides 
                                to participants free of charge and that 
                                can be used or redeemed only for 
                                participation in games or contests 
                                offered by the sponsor; or
                            ``(vii) participation in any simulation 
                        sports game or educational game or contest in 
                        which (if the game or contest involves a team 
                        or teams) all teams are fictional and no team 
                        is a member of an amateur or professional 
                        sports organization (as those terms are defined 
                        in section 3701 of title 28) and that meets the 
                        following conditions:
                                    ``(I) All prizes and awards offered 
                                to winning participants are established 
                                and made known to the participants in 
                                advance of the game or contest and 
                                their value is not determined by the 
                                number of participants or the amount of 
                                any fees paid by those participants.
                                    ``(II) All winning outcomes reflect 
                                the relative knowledge and skill of the 
                                participants and are determined 
                                predominantly by accumulated 
                                statistical results of the performance 
                                of individuals (athletes in the case of 
                                sports events) in multiple real-world 
                                sporting or other events.
                                    ``(III) No winning outcome is 
                                based--
                                            ``(aa) on the score, point-
                                        spread or any performance or 
                                        performances of any single 
                                        real-world team or any 
                                        combination of such teams; or
                                            ``(bb) solely on any single 
                                        performance of an individual 
                                        athlete in any single real-
                                        world sporting or other event.
            ``(7) The term `gambling business' means a business of 
        betting or wagering;
            ``(8) The term `information assisting in the placing of 
        bets or wagers' means information knowingly transmitted by an 
        individual in a gambling business for use in placing, 
        receiving, making, or otherwise enabling or facilitating a bet 
        or wager and does not include--
                    ``(A) any posting or reporting of any educational 
                information on how to make a legal bet or wager or the 
                nature of betting or wagering, as long as such posting 
                or reporting does not solicit or provide information 
                for the purpose of facilitating or enabling the placing 
                or receipt of bets or wagers in a jurisdiction where 
                such betting is illegal; or
                    ``(B) advertising relating to betting or wagering 
                in a jurisdiction where such betting or wagering is 
                legal, as long as such advertising does not solicit or 
                provide information for the purpose of facilitating or 
                enabling the placing or receipt of bets or wagers in a 
                jurisdiction where such betting is illegal; or
                    ``(C) information that is exchanged between or 
                among 1 or more pari-mutuel wagering facilities 
                licensed by the State or approved by the foreign 
                jurisdiction in which the facility is located, and any 
                support services, wherever located, if the information 
                exchanged is used exclusively for the pooling or 
                processing of bets or wagers made by or with the 
                facility or facilities under each State's applicable 
                law.
            ``(9) The term `person' includes a government (including 
        any governmental entity (as defined in section 3701(2) of title 
        28)).
            ``(10) The term `State' means a State of the United States, 
        the District of Columbia, or a commonwealth, territory, or 
        possession of the United States.
            ``(11) The terms `credit', `creditor', and `credit card' 
        have the meanings given such terms in section 103 of the Truth 
        in Lending Act.
            ``(12) The term `electronic fund transfer'--
                    ``(A) has the meaning given such term in section 
                903 of the Electronic Fund Transfer Act; or
                    ``(B) any fund transfer covered by Article 4A of 
                the Uniform Commercial Code, as in effect in any State.
            ``(13) The term `financial institution' has the meaning 
        given such term in section 903 of the Electronic Fund Transfer 
        Act.
            ``(14) The terms `money transmitting business' and `money 
        transmitting service' have the meanings given such terms in 
        section 5330(d) of title 31, United States Code.
            ``(15) The term `Tribe' or `tribal' means an Indian tribe, 
        as defined under section 4(5) of the Indian Gaming Regulatory 
        Act of 1988).''.

SEC. 3. MODIFICATION OF EXISTING PROHIBITION.

    (a) In General.--Section 1084 of title 18, United States Code, is 
amended to read as follows:
``Sec. 1084. Use of a communication facility to transmit bets or 
              wagers; Penalties
    ``(a) Except as otherwise provided in this section, whoever, being 
engaged in a gambling business, knowingly uses a communication 
facility--
            ``(1) for the transmission in interstate or foreign 
        commerce, within the special maritime and territorial 
        jurisdiction of the United States, or to or from any place 
        outside the jurisdiction of any nation with respect to any 
        transmission to or from the United States, of bets or wagers, 
        or information assisting in the placing of bets or wagers; or
            ``(2) for the transmission of a communication in interstate 
        or foreign commerce, within the special maritime and 
        territorial jurisdiction of the United States, or to or from 
        any place outside the jurisdiction of any nation with respect 
        to any transmission to or from the United States, which 
        entitles the recipient to receive money or credit as a result 
        of bets or wagers, or for information assisting in the placing 
        of bets or wagers;
shall be fined under this title or imprisoned not more than five years, 
or both.
    ``(b)(1) Except as provided in paragraph (2), whoever, being 
engaged in a gambling business, knowingly accepts, in connection with 
the transmission of a communication in interstate or foreign commerce, 
within the special maritime and territorial jurisdiction of the United 
States, or to or from any place outside the jurisdiction of any nation 
with respect to any transmission to or from the United States of bets 
or wagers or information assisting in the placing of bets or wagers--
            ``(A) credit, or the proceeds of credit, extended to or on 
        behalf of another (including credit extended through the use of 
        a credit card);
            ``(B) an electronic fund transfer or funds transmitted by 
        or through a money transmitting business, or the proceeds of an 
        electronic fund transfer or money transmitting service, from or 
        on behalf of the other person;
            ``(C) any check, draft, or similar instrument which is 
        drawn by or on behalf of the other person and is drawn on or 
        payable through any financial institution; or
            ``(D) the proceeds of any other form of financial 
        transaction as the Secretary of the Treasury may prescribe by 
        regulation which involves a financial institution as a payor or 
        financial intermediary on behalf of or for the benefit of the 
        other person,
shall be fined under this title or imprisoned not more than five years, 
or both.
    ``(2) Paragraph (b)(1) does not apply if the use of a communication 
facility for the transmission of bets or wagers or information 
assisting in the placing of bets or wagers is permitted under 
subsections (c) or (d).
    ``(c) Nothing in this section prohibits--
            ``(1) the transmission of information assisting in the 
        placing of bets or wagers for use in news reporting if such 
        transmission does not solicit or provide information for the 
        purpose of facilitating or enabling the placing or receipt of 
        bets or wagers in a jurisdiction where such betting is illegal;
            ``(2) the transmission of information assisting in the 
        placing of bets or wagers from a State or foreign country where 
        such betting or wagering is permitted under Federal, State, 
        tribal, or local law into a State or foreign country in which 
        such betting on the same event is permitted under Federal, 
        State, tribal, or local law; or
            ``(3) the interstate transmission of information relating 
        to a State-specific lottery between a State or foreign country 
        where such betting or wagering is permitted under Federal, 
        State, tribal, or local law and an out-of-State data center for 
        the purposes of assisting in the operation of such State-
        specific lottery.
    ``(d) Nothing in subsection (c) or (d) shall allow the use of a 
communication facility for the transmission of bets or wagers involving 
the purchase of a chance or opportunity to win a lottery, or the use of 
a communication facility for the transmission of information assisting 
in the placing of bets or wagers involving the purchase of a chance or 
opportunity to win a lottery, except that communication facilities may 
be used for the transmission of such bets or wagers and the 
transmission of information assisting such bets or wagers as long as 
such bets or wagers are placed on the premises of a retail outlet that 
is open to the public and licensed by the State in which it is located 
to sell chances or opportunities to win a lottery.
    ``(e) Nothing in this section prohibits the use of a communication 
facility for the transmission of bets or wagers or information 
assisting in the placing of bets or wagers, if--
            ``(1) at the time the transmission occurs, the individual 
        or entity placing the bets or wagers or information assisting 
        in the placing of bets or wagers, the gambling business, and 
        any facility or support service processing those bets or wagers 
        are physically located in the same State, and the State has a 
        secure and effective customer verification and age verification 
        system to assure compliance with age and residence 
        requirements, and for class II or class III gaming under the 
        Indian Gaming Regulatory Act, are physically located on Indian 
        lands within that State;
            ``(2) the State or Tribe has explicitly authorized such 
        bets and wagers;
            ``(3) the State has explicitly authorized and licensed the 
        operation of the gambling business, any facility processing the 
        bets and wagers, and the support service within its borders or 
        the Tribe has explicitly authorized and licensed the operation 
        of such gambling business, any facility processing the bets and 
        wagers, and the support service on Indian lands within its 
        jurisdiction;
            ``(4) with respect to class II or class III gaming, the 
        game is permitted under and conducted in accordance with the 
        Indian Gaming Regulatory Act;
            ``(5) with respect to class III gaming under the Indian 
        Gaming Regulatory Act, the game is authorized under, and is 
        conducted in accordance with, the respective Tribal-State 
        compact of the Tribe having jurisdiction over the Indian lands 
        where the individual or entity placing the bets or wagers or 
        information assisting in the placing of bets or wagers, the 
        gambling business, and any facility or support service 
        processing those bets or wagers are physically located; and
            ``(6) with respect to class III gaming under the Indian 
        Gaming Regulatory Act, each such Tribal-State compact expressly 
        provides that the game may be conducted using a communication 
        facility to transmit bets or wagers or information assisting in 
        the placing of bets or wagers.
    ``(f) Nothing in this section creates immunity from criminal 
prosecution under any laws of any State or Tribe.
    ``(g) Nothing in this section authorizes activity that is 
prohibited under chapter 178 of title 28, United States Code.
    ``(h) When any common carrier, subject to the jurisdiction of the 
Federal Communications Commission, is notified in writing by a Federal, 
State, tribal or local law enforcement agency, acting within its 
jurisdiction, that any communication facility furnished by it is being 
used or will be used by its subscriber for the purpose of transmitting 
or receiving gambling information, in interstate or foreign commerce, 
within the special maritime and territorial jurisdiction of the United 
States, or to or from any place outside the jurisdiction of any nation 
with respect to any transmission to or from the United States in 
violation of Federal, State, tribal or local law, it shall discontinue 
or refuse, the leasing, furnishing, or maintaining of such facility, 
after reasonable notice to the subscriber, but no damages, penalty or 
forfeiture, civil or criminal, shall be found against any common 
carrier for any act done in compliance with any notice received from a 
law enforcement agency. Nothing in this section shall be deemed to 
prejudice the right of any person affected thereby to secure an 
appropriate determination, as otherwise provided by law, in a Federal 
court or in a State, tribal, or local tribunal or agency, that such 
facility should not be discontinued or removed, or should be restored.
    ``(i)(1) A Federal, State, tribal, or local law enforcement agency, 
acting within its jurisdiction may, in a civil action, obtain 
injunctive or declaratory relief to restrain or prevent any person from 
paying or assisting in the payment of bets or wagers, or communicating 
information assisting in the placing of bets or wagers, in interstate 
or foreign commerce, within the special maritime and territorial 
jurisdiction of the United States, or to or from any place outside the 
jurisdiction of any nation with respect to any transmission to or from 
the United States in violation of Federal, State, tribal, or local law.
    ``(2) No damages, penalty, or forfeiture, civil or criminal, shall 
be found against any person or entity for any act done in compliance 
with any notice received from a law enforcement agency.
    ``(3) Relief granted under paragraph (1) against an interactive 
computer service (as defined in section 230(f) of the Communications 
Act of 1934) shall--
            ``(A) be limited to the removal of, or disabling of access 
        to, an online site violating this section, or a hypertext link 
        to an online site violating this section, that resides on a 
        computer server that such service controls or operates; except 
        this limitation shall not apply if the service is violating 
        this section or is in active concert with a person who is 
        violating this section and receives actual notice of the 
        relief;
            ``(B) be available only after notice to the interactive 
        computer service and an opportunity for the service to appear 
        are provided;
            ``(C) not impose any obligation on an interactive computer 
        service to monitor its service or to affirmatively seek facts 
        indicating activity violating this section;
            ``(D) specify the interactive computer service to which it 
        applies; and
            ``(E) specifically identify the location of the online site 
        or hypertext link to be removed or access to which is to be 
        disabled.
    ``(j) Nothing in this section allows the use of a communication 
facility for the purpose of placing a bet or wager or the use of a 
communication facility for the purpose of transmitting information 
assisting in the placement of bets or wagers that was illegal as of 
June 6, 2002.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 50 of such title is amended so that the item relating to 
section 1084 reads as follows:

``1084.  Use of a communication facility to transmit bets or wagers; 
                            penalties.''.




                                                 Union Calendar No. 356

107th CONGRESS

  2d Session

                               H. R. 3215

                      [Report No. 107-591, Part I]

_______________________________________________________________________

                                 A BILL

  To amend title 18, United States Code, to expand and modernize the 
    prohibition against interstate gambling, and for other purposes.

_______________________________________________________________________

                             July 18, 2002

Reported with an amendment and referred to the Committee on Energy and 
     Commerce for a period ending no later than July 19, 2002, 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

                             July 19, 2002

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