[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1223 Introduced in House (IH)]
108th CONGRESS
1st Session
H. R. 1223
To create a commission on Internet gambling licensing and regulation.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 12, 2003
Mr. Conyers (for himself, Mr. Cannon, Ms. Berkley, and Mr. Baca)
introduced the following bill; which was referred to the Committee on
the Judiciary, and in addition to the Committees on Energy and
Commerce, and Financial Services, for a period to be subsequently
determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To create a commission on Internet gambling licensing and regulation.
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 shall be known as the ``Internet Gambling Licensing and
Regulation Commission Act''.
SEC. 2. FINDINGS AND POLICY.
The Congress finds the following:
(1) Gambling is regulated primarily by State and tribal
governments, whose statutes and regulations govern the
placement and acceptance of wagers within state boundaries.
(2) Online gaming is an activity occurring in interstate
commerce with millions of Americans participating.
(3) The advent of advanced telecommunications technologies,
and the Internet in particular, has rendered state regulation
less effective and confusing with respect to online wagering.
(4) Federal statutes governing interstate placement of
wagers are contradictory and confusing, and they do not
adequately address the issues involved with gambling over the
Internet, including gambling by minors, problem gamblers, and
the susceptibility of Internet gambling to money laundering.
(5) Commercial casino operations, Native American tribal
gaming operations, State lotteries, horse and dog racing
tracks, jai alai, and card rooms have made legal land-based
gambling available to the vast majority of Americans.
(6) The use of various types of credit, credit cards,
electronic fund transfers, and bank instruments is the
principal manner in which individuals fund their engagement in
Internet gambling.
(7) Online gaming should be subject to the consumer
protection laws of the United States.
(8) Various forms of gambling, including inter alia,
casino-style, sports wagering, parimutuel wagering (including
horse racing, dog racing, and jai alai), State lotteries,
noncasino slot machines and others, are subject to disparate
Federal, State, and tribal laws and regulations.
(9) Because of the nature of the Internet, legislative
attempts to prohibit Internet gambling are unlikely to be
effective, and may adversely impact American's rights to due
process and individual privacy.
(10) It is the policy of the Congress in this Act to
establish a commission to study and resolve issues posed by the
regulation of interstate commerce with respect to Internet
gambling.
SEC. 3. INTERNET GAMBLING LICENSING AND REGULATION STUDY COMMISSION.
(a) Establishment of Commission.--There is established a commission
to be known as the Internet Gambling Licensing and Regulation Study
Commission (hereinafter referred to in this Act as the ``Commission'').
The Commission shall--
(1) be composed of 5 members appointed in accordance with
subsection (b); and
(2) conduct its business in accordance with the provisions
of this Act.
(b) Membership.--
(1) In general.--The Commissioners shall be appointed for
the life of the Commission as follows:
(A) 1 shall be appointed by the Speaker of the
House of Representatives.
(B) 1 shall be appointed by the Minority Leader of
the House of Representatives.
(C) 1 shall be appointed by the Majority Leader of
the Senate.
(D) 1 shall be appointed by the Minority Leader of
the Senate.
(E) The 4 commissioners appointed in subparagraphs
(A), (B), (C), and (D) shall select by consensus the
fifth Commissioner, who shall be the Chairman of the
Commission.
(2) Persons eligible.--The members of the Commission shall
be individuals who have knowledge or expertise, whether by
experience or training, in matters to be studied by the
Commission under section 4. The members may be from the public
or private sector, and may include Federal, State, local, or
Native American tribal officers or employees, members of
academia, nonprofit organizations, industry, or other
interested individuals.
(3) Consultation required.--The Speaker of the House of
Representatives, the Minority Leader of the House of
Representatives, the Majority Leader of the Senate, and the
Minority Leader of the Senate shall consult among themselves
prior to the appointment of the members of the Commission in
order to achieve, to the maximum extent possible, fair and
equitable representation of various points of view with respect
to the matters to be studied by the Commission under section 4.
(4) Completion of appointments; vacancies.--The Speaker of
the House of Representatives, the Minority Leader of the House
of Representatives, the Majority Leader of the Senate, and the
Minority Leader of the Senate shall conduct the consultation
required under paragraph (3) and shall each make their
respective appointments not later than 60 days after the date
of enactment of this Act. Any vacancy that occurs during the
life of the Commission shall not affect the powers of the
Commission, and shall be filled in the same manner as the
original appointment not later than 60 days after the vacancy
occurs.
(5) Operation of the commission.--
(A) Meetings.--The Commission shall meet at the
call of the Chairman. The initial meeting of the
Commission shall be conducted not later than 30 days
after the appointment of the last member of the
Commission, or not later than 30 days after the date on
which appropriated funds are available for the
Commission, whichever is later.
(B) Quorum; voting; rules.--A majority of the
members of the Commission shall constitute a quorum to
conduct business, but the Commission may establish a
lesser quorum for conducting hearings scheduled by the
Commission. Each member of the Commission shall have 1
vote, and the vote of each member shall be accorded the
same weight. The Commission may establish by majority
vote any other rules for the conduct of the
Commission's business, if such rules are not
inconsistent with this Act or other applicable law.
SEC. 4. DUTIES OF THE COMMISSION.
(a) Study.--
(1) In general.--It shall be the duty of the Commission to
conduct a comprehensive study of the existing legal framework
governing Internet gambling and the issues involved with the
licensing and regulation of Internet gambling.
(2) Matters to be studied.--The matters studied by the
Commission under paragraph (1) shall include, but not be
limited to--
(A) a review of existing international, Federal,
State, tribal, and local laws governing various forms
of wagering over the Internet, the effectiveness of
those laws, and their conformity with each other;
(B) an assessment of the impact of Internet
gambling with respect to problem gambling;
(C) an assessment of the impact of Internet
gambling on the availability of gambling to minors;
(D) an assessment of the susceptibility of Internet
gambling to money laundering by terrorists or criminal
enterprises;
(E) the potential of regulatory measures to
minimize any adverse impacts of Internet gambling,
including the problems identified in subparagraphs (B),
(C), and (D);
(F) an evaluation of the personal use of credit,
credit cards, electronic fund transfers, and bank
instruments to fund the engagement in Internet
gambling, including an assessment of the potential of
these means to minimize any adverse impacts of Internet
gambling, including the problems identified in
subparagraphs (B), (C), and (D);
(G) issues of federalism posed by the regulation of
Internet gambling, and the reconciliation of a state-
based legal framework with an inherently interstate and
international medium such as the Internet;
(H) the problems of unregulated international
Internet wagering, and options for the Federal
Government to seek international cooperation in the
licensing and regulation of such gambling; and
(I) an assessment of the activities in the European
Union member states to regulate and license Internet
gambling.
(b) Report.--Not later than 1 year after the date on which the
Commission first meets, the Commission shall submit to the President,
the Congress, State Governors, and Native American tribal governments a
comprehensive report on the Commission's findings and conclusions.
(c) Recommendations.--Not later than 6 months after the submission
of the report under subsection (b) the Commission shall issue proposed
changes to Federal laws and regulations to provide for the licensing
and regulation of Internet gambling in the United States. These
proposals shall--
(1) preserve the prerogatives of States with respect to
intrastate gambling and wagering within their borders, and the
further prerogative of States to regulate the placement and
acceptance of online wagers by their citizens, including to
adopt measures to prevent wagering by individuals in States
where all gambling is illegal;
(2) include measures to minimize adverse impacts of
Internet gambling, including--
(A) measures to prevent minors from gambling
online;
(B) measures to prevent the use of Internet
gambling as a money laundering channel for terrorists
and criminal enterprises; and
(C) measures to identify, and where possible,
provide assistance to problem gamblers online;
(3) preserve tribal sovereignty with respect to gaming and
Internet gaming in a manner consistent with the decision of the
Supreme Court of the United States in California v. Cabazon
Band of Mission Indians, 480 U.S. 202, 107 S. Ct. 1083 (1987);
(4) clarify and harmonize the Federal laws governing
gambling as they apply to Internet gambling, and eliminate the
disparate treatment of various forms of Internet gambling,
except in cases where the disparity serves a compelling State
interest;
(5) provide for the appropriate taxation of Internet
gambling enterprises;
(6) provide for the licensing of enterprises both within
the United States and outside of its borders;
(7) consider and, where possible, remain consistent with
the goals, principles, and obligations of the United States in
other international negotiations governing electronic commerce;
and
(8) include measures to discourage, prohibit, or prevent
United States citizens from wagering with unlicensed Internet
gambling operations outside of the United States.
SEC. 5. POWERS OF THE COMMISSION.
(a) Hearings.--
(1) In general.--The Commission may hold such hearings, sit
and act at such times and places, administer such oaths, take
such testimony, and receive such evidence as the Commission
considers advisable to carry out its duties under section 4.
(2) Witness expenses.--Witnesses requested to appear before
the Commission shall be paid the same fees as are paid to
witnesses under section 1821 of title 28, United States Code.
The per diem and mileage allowances for witnesses shall be paid
from funds appropriated to the Commission.
(b) Subpoenas.--
(1) In general.--If a person fails to supply information
requested by the Commission, the Commission may by majority
vote require by subpoena the production of any written or
recorded information, document, report, answer, record,
account, paper, computer file, or other data or documentary
evidence necessary to carry out its duties under section 4. The
Commission shall transmit to the Attorney General a
confidential, written notice at least 10 days in advance of the
issuance of any such subpoena. A subpoena under this paragraph
may require the production of materials from any place within
the United States.
(2) Interrogatories.--The Commission may, with respect only
to information necessary to understand any materials obtained
through a subpoena under paragraph (1), issue a subpoena
requiring the person producing such materials to answer, either
through a sworn deposition or through written answers provided
under oath (at the election of the person upon whom the
subpoena is served), to interrogatories from the Commission
regarding such information. A complete recording or
transcription shall be made of any deposition made under this
paragraph.
(3) Certification.--Each person who submits materials or
information to the Commission pursuant to a subpoena issued
under paragraph (1) or (2) shall certify to the Commission the
authenticity and completeness of all materials or information
submitted. The provisions of section 1001 of title 18, United
States Code, shall apply to any false statements made with
respect to the certification required under this paragraph.
(4) Treatment of subpoenas.--Any subpoena issued by the
Commission under paragraph (1) or (2) shall comply with the
requirements for subpoenas issued by a United States district
court under the Federal Rules of Civil Procedure.
(5) Failure to obey a subpoena.--If a person refuses to
obey a subpoena issued by the Commission under paragraph (1) or
(2), the Commission may apply to a United States district court
for an order requiring that person to comply with such
subpoena. The application may be made within the judicial
district in which that person is found, resides, or transacts
business. Any failure to obey the order of the court may be
punished by the court as civil contempt.
(c) Information From Federal Agencies.--The Commission may secure
directly from any Federal department or agency such information as the
Commission considers necessary to carry out its duties under section 4.
Upon the request of the Commission, the head of such department or
agency may furnish such information to the Commission.
(d) Information To Be Kept Confidential.--The Commission shall be
considered an agency of the Federal Government for purposes of section
1905 of title 18, United States Code, and any individual employed by an
individual, entity, or organization under contract to the Commission
under section 7 shall be considered an employee of the Commission for
the purposes of section 1905 of title 18, United States Code.
Information obtained by the Commission, other than information
available to the public, shall not be disclosed to any person in any
manner, except--
(1) to Commission employees or employees of any individual,
entity, or organization under contract to the Commission under
section 7 for the purpose of receiving, reviewing, or
processing such information;
(2) upon court order; or
(3) when publicly released by the Commission in an
aggregate or summary form that does not directly or indirectly
disclose--
(A) the identity of any person or business entity;
or
(B) any information which could not be released
under section 1905 of title 18, United States Code.
SEC. 6. COMMISSION PERSONNEL MATTERS.
(a) Compensation of Members.--Each member of the Commission who is
not an officer or employee of the Federal Government, or whose
compensation is not precluded by a State, local, or Native American
tribal government position, shall be compensated at a rate equal to the
daily equivalent of the annual rate of basic pay prescribed for level
IV of the Executive Schedule under section 5315 of title 5, United
States Code, for each day (including travel time) during which such
member is engaged in the performance of the duties of the Commission.
All members of the Commission who are officers or employees of the
United States shall serve without compensation in addition to that
received for their services as officers or employees of the United
States.
(b) Travel Expenses.--The members of the Commission shall be
allowed travel expenses, including per diem in lieu of subsistence, at
rates authorized for employees of agencies under subchapter I of
chapter 57 of title 5, United States Code, while away from their homes
or regular places of business in the performance of service for the
Commission.
(c) Staff.--
(1) In general.--The Chairman of the Commission may,
without regard to the civil service laws and regulations,
appoint and terminate an executive director and such other
additional personnel as may be necessary to enable the
Commission to perform its duties. The employment and
termination of an executive director shall be subject to
confirmation by a majority of the members of the Commission.
(2) Compensation.--The executive director shall be
compensated at a rate not to exceed the rate payable for level
V of the Executive Schedule under section 5316 of title 5,
United States Code. The Chairman may fix the compensation of
other personnel without regard to the provisions of chapter 51
and subchapter III of chapter 53 of title 5, United States
Code, relating to classification of positions and General
Schedule pay rates, except that the rate of pay for such
personnel may not exceed the rate payable for level V of the
Executive Schedule under section 5316 of such title.
(3) Detail of government employees.--Any Federal Government
employee, with the approval of the head of the appropriate
Federal agency, may be detailed to the Commission without
reimbursement, and such detail shall be without interruption or
loss of civil service status, benefits, or privilege.
(d) Procurement of Temporary and Intermittent Services.--The
Chairman of the Commission may procure temporary and intermittent
services under section 3109(b) of title 5, United States Code, at rates
for individuals not to exceed the daily equivalent of the annual rate
of basic pay prescribed for level V of the Executive Schedule under
section 5316 of such title.
SEC. 7. CONTRACTS FOR RESEARCH.
(a) Advisory Commission on Intergovernmental Relations.--
(1) In general.--In carrying out its duties under section
4, the Commission shall contract with the Advisory Commission
on Intergovernmental Relations for--
(A) a thorough review and cataloging of all
applicable Federal, State, local, and Native American
tribal laws, regulations, and ordinances that pertain
to gambling in the United States; and
(B) assistance in conducting the studies required
by the Commission under section 4(a), and in particular
the review and assessments required in subparagraphs
(A), (E), and (G) of paragraph (2) of such section.
(2) Report required.--The contract entered into under
paragraph (1) shall require that the Advisory Commission on
Intergovernmental Relations submit a report to the Commission
detailing the results of its efforts under the contract not
later than 15 months after the date upon which the Commission
first meets.
(b) National Research Council.--
(1) In general.--In carrying out its duties under section
4, the Commission shall contract with the National Research
Council of the National Academy of Sciences for assistance in
conducting the studies required by the Commission under section
4(a).
(2) Report required.--The contract entered into under
paragraph (1) shall require that the National Research Council
submit a report to the Commission detailing the results of its
efforts under the contract not later than 15 months after the
date upon which the Commission first meets.
(c) Other Organizations.--Nothing in this section shall be
construed to limit the ability of the Commission to enter into
contracts with other entities or organizations for research necessary
to carry out the Commission's duties under section 4.
SEC. 8. DEFINITIONS.
For the purposes of this Act:
(1) Bank instrument.--The term ``bank instrument'' means
any instrument drawn on or payable through a financial
institution (including any check, draft, or similar
instrument).
(2) Credit and credit card.--The terms ``credit'' and
``credit card'' have the meanings given such terms in section
103 of the Truth in Lending Act (15 U.S.C. 1602).
(3) Electronic fund transfer.--The term ``electronic fund
transfer''--
(A) has the meaning given such term in section 903
of the Electronic Fund Transfer Act (15 U.S.C. 1693a);
and
(B) includes any fund transfer covered by Article
4A of the Uniform Commercial Code, as in effect in any
State.
(4) Financial institution.--The term ``financial
institution'' has the meaning given such term in section 903 of
the Electronic Fund Transfer Act (15 U.S.C. 1693a).
(5) Gambling.--
(A) Except as provided in subparagraph (B), the
term ``gambling'' means any legalized form of wagering
or betting conducted in a casino, on a riverboat, on an
Indian reservation, or at any other location under the
jurisdiction of the United States. Such term includes
any casino game, parimutuel betting, sports-related
betting, lottery, pull-tab game, slot machine, any type
of video gaming, computerized wagering or betting
activities (including any such activity conducted over
the Internet), and philanthropic or charitable gaming
activities.
(B) The term ``gambling'' does not include--
(i) any activity governed by the securities
laws (as that term is defined in section
3(a)(47) of the Securities Exchange Act of
1934) for the purchase or sale of securities
(as that term is defined in section 3(a)(10) of
such Act);
(ii) any transaction conducted on or
subject to the rules of a registered entity or
exempt board of trade pursuant to the Commodity
Exchange Act;
(iii) any over-the-counter derivative
instrument;
(iv) any contract of indemnity or
guarantee;
(v) any contract for insurance;
(vi) any deposit or other transaction with
a depository institution (as defined in section
3(c) of the Federal Deposit Insurance Act); or
(vii) any participation in a simulation
sports game or an educational game or contest
that--
(I) is not dependent solely on the
outcome of any single sporting event or
nonparticipant's singular individual
performance in any single sporting
event;
(II) has an outcome that reflects
the relative knowledge and skill of the
participants with such outcome
determined predominantly by accumulated
statistical results of sporting events;
and
(III) offers a prize or award to a
participant that is established in
advance of the game or contest and is
not determined by the number of
participants or the amount of any fees
paid by those participants.
(6) Native american tribal government.--The term ``Native
American tribal government'' means an Indian tribe, as defined
under section 4(5) of the Indian Gaming Regulatory Act of 1988
(25 U.S.C. 2703(5)).
(7) State.--The term ``State'' means each of the several
States of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, American
Samoa, and the Commonwealth of the Northern Mariana Islands.
SEC. 9. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--There are authorized to be appropriated to the
Commission, the Advisory Commission on Intergovernmental Relations, and
the National Academy of Sciences such sums as may be necessary to carry
out the purposes of this Act. Any sums appropriated shall remain
available, without fiscal year limitation, until expended.
(b) Limitation.--No payment may be made under section 6 or 7 of
this Act except to the extent provided for in advance in an
appropriation Act.
SEC. 10. TERMINATION OF THE COMMISSION.
The Commission shall terminate 60 days after the Commission
submits the report required under section 4(b).
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