[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2607 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 2607

    To amend the Internal Revenue Code of 1986 to regulate internet 
                               gambling.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              June 7, 2007

Mr. McDermott introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
    To amend the Internal Revenue Code of 1986 to regulate internet 
                               gambling.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Internet Gambling Regulation and Tax 
Enforcement Act of 2007''.

SEC. 2. FEDERAL LICENSING REQUIREMENT FOR INTERNET GAMBLING OPERATORS.

    (a) In General.--Chapter 36 of the Internal Revenue Code of 1986 
(relating to certain other excise taxes) is amended by adding at the 
end the following new subchapter:

              ``Subchapter E--Internet Gambling Operators

``Sec. 4491. Definitions.

``SEC. 4491. DEFINITIONS.

    ``For purposes of this subchapter, the following definitions shall 
apply:
            ``(1) Director.--The term `director' means the Director of 
        the Financial Crimes Enforcement Network.
            ``(2) Bet or wager.--The term `bet or wager' shall have the 
        same meaning as in section 5362(1) of chapter 53 of title 31, 
        United States Code.
            ``(3) Licensee.--The term `licensee' shall mean an Internet 
        gambling operator licensed by the Director in accordance with 
        this subchapter.
            ``(4) Internet.--The term `Internet' means the 
        international computer network of interoperable packet switched 
        data networks.
            ``(5) License fees.--
                    ``(A) License fee.--
                            ``(i) In general.--Each licensee shall be 
                        required to pay to the Director during each 30-
                        day period of operation a license fee of 2 
                        percent of all funds deposited with or on 
                        behalf of the licensee by any person for the 
                        purpose of placing a bet during the preceding 
                        30-day period.
                            ``(ii) Disposition.--Amounts collected by 
                        the Director as license fees shall be deposited 
                        in the general fund of the Treasury and treated 
                        as revenue.
                    ``(B) Direct and exclusive obligation of 
                licensee.--The license fee shall be the direct and 
                exclusive obligation of the licensee and may not be 
                deducted from the amounts available as deposits to the 
                person placing a bet.
            ``(6) Approval of license.--The Director shall grant 
        licenses under this subchapter if, in the Director's sole 
        discretion, the applicant meets the criteria set by the 
        Director and is generally fit to engage in the business of 
        Internet gambling.
            ``(7) Safeguards required of licensee.--No person shall 
        receive a license under this section unless the person 
        implements the following requirements with respect to any 
        Internet bet or wager--
                    ``(A) appropriate mechanisms to ensure that all 
                taxes relating to Internet gambling due to Federal and 
                State governments from individuals engaged in Internet 
                gambling are collected at the time of any payment of 
                any proceeds of Internet gambling;
                    ``(B) appropriate mechanisms to ensure that all 
                taxes relating to Internet gambling due to Federal and 
                State governments from any persons licensed under this 
                Act are collected as required by law; and
                    ``(C) appropriate mechanisms to ensure that the 
                license fee is paid to the Director under subsection 
                (e).''.
    (b) Clerical Amendment.--The table of subchapters for chapter 36 of 
such Code is amended by adding at the end the following new subchapter:

``Subchapter E. Internet gambling operators.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2008.
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