[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 3616 Introduced in Senate (IS)]







110th CONGRESS
  2d Session
                                S. 3616

To amend title 31, United States Code, to provide for the licensing of 
        Internet skill game facilities, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

           September 26 (legislative day, September 17), 2008

 Mr. Menendez introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
To amend title 31, United States Code, to provide for the licensing of 
        Internet skill game facilities, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Internet Skill Game Licensing and 
Control Act of 2008''.

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

    (a) In General.--Chapter 53 of title 31, United States Code, is 
amended by adding at the end the following:

      ``SUBCHAPTER V--REGULATION OF INTERNET SKILL GAME FACILITIES

``Sec. 5381. Definitions
    ``In this subchapter:
            ``(1) Bet or wager.--The term `bet or wager' has the 
        meaning given the term in section 5362.
            ``(2) Indian lands and indian tribe.--The terms `Indian 
        lands' and `Indian tribe' have the meaning given such terms in 
        section 4 of the Indian Gaming Regulatory Act (25 U.S.C. 2703).
            ``(3) Internet.--The term `Internet' has the meaning given 
        the term in section 5362.
            ``(4) Internet skill game.--The term `Internet skill game' 
        means an Internet-based game that uses simulated cards, dice, 
        or tiles in which success is predominantly determined by the 
        skill of the players, including poker, bridge, and mahjong.
            ``(5) Internet skill game facility.--The term `Internet 
        skill game facility' means an Internet site through which a 
        permitted bet or wager is placed, accepted, or otherwise made, 
        whether transmitted by telephone, Internet, or other electronic 
        communication.
            ``(6) Licensee.--The term `licensee' means a person that 
        operates an Internet skill game facility under a license issued 
        by the Secretary under this subchapter.
            ``(7) Non-house-banked game.--The term `non-house-banked 
        game' means a game--
                    ``(A) that--
                            ``(i) consists of players playing against 
                        each other and not against the operator of the 
                        game; and
                            ``(ii) provides for payouts, if any, that 
                        are drawn from the players' pool and not from 
                        the operator of the game; and
                    ``(B) may be operated by an Internet skill game 
                facility in which the operator retains a percentage of 
                the players' pool or receives a fixed fee as 
                compensation.
            ``(8) Operates an internet skill game facility.--The term 
        `operates an Internet skill game facility' means directs, 
        manages, supervises, or controls an Internet skill game 
        facility.
            ``(9) Permitted bet or wager.--The term `permitted bet or 
        wager' means a bet or wager made with respect to the outcome of 
        an Internet skill game that is a non-house-banked game.
            ``(10) Secretary.--The term `Secretary' means the Secretary 
        of the Treasury.
            ``(11) State.--The term `State' means any State of the 
        United States, the District of Columbia, or any commonwealth, 
        territory, or other possession of the United States.
``Sec. 5382. Establishment and administration of licensing program
    ``(a) License Required.--Beginning 6 months after the issuance of 
the first license under this subchapter, it shall be unlawful for a 
person to operate an Internet skill game facility in interstate or 
foreign commerce without a license issued to such person by the 
Secretary under this subchapter.
    ``(b) Applications for License.--
            ``(1) Application.--A person seeking a license to operate 
        an Internet skill game facility in interstate or foreign 
        commerce shall submit to the Secretary an application therefore 
        in such form and in such manner as the Secretary considers 
        appropriate.
            ``(2) Elements.--Each application submitted under paragraph 
        (1) shall include such information as the Secretary considers 
        appropriate, including the following:
                    ``(A) Complete financial information about the 
                applicant.
                    ``(B) Documentation showing the corporate structure 
                of the applicant and all related businesses and 
                affiliates.
                    ``(C) The names of all persons directly or 
                indirectly interested in the business of the applicant 
                and the nature of such interest.
                    ``(D) A certification by the applicant, agreeing to 
                be subject to United States jurisdiction and all 
                applicable United States laws relating to Internet 
                skill games or gambling activities.
            ``(3) Waiver of privilege.--Any applicant may claim any 
        privilege afforded by the Constitution of the United States in 
        refusing to answer questions by the Secretary. A claim of 
        privilege with respect to any testimony or evidence pertaining 
        to an application may constitute sufficient grounds for denial 
        of a license under this subchapter.
    ``(c) Review of Applicants and Licensees.--
            ``(1) In general.--The Secretary may not issue a license to 
        an applicant under this subchapter unless the Secretary has 
        determined, after evaluating the factors described in paragraph 
        (2), that the applicant is qualified for such license.
            ``(2) Factors.--The factors to be evaluated by the 
        Secretary under paragraph (1) shall include the following:
                    ``(A) The honesty and integrity of the applicant.
                    ``(B) The business probity and relevant experience 
                of the applicant.
                    ``(C) The financial condition of the applicant.
                    ``(D) Whether the applicant has adequate financial 
                capabilities from suitable sources.
                    ``(E) The applicant's record of compliance with 
                laws and requirements related to Internet skill gaming 
                in foreign jurisdictions.
            ``(3) Background checks.--In evaluating an applicant under 
        paragraph (1), the Secretary shall--
                    ``(A) if the applicant is an individual, carry out 
                a background check to determine if the individual has a 
                criminal record; and
                    ``(B) if the applicant is a corporation, 
                partnership, or other business entity, carry out a 
                background check to determine if the president or other 
                chief executive of the applicant and other partners or 
                senior executives and directors of the applicant, as 
                determined appropriate by the Secretary, have a 
                criminal record.
            ``(4) Monitoring.--The Secretary shall monitor continuously 
        each licensee and all other persons having a material 
        involvement directly or indirectly with the operation of the 
        Internet skill gaming facility of such licensee to ensure 
        that--
                    ``(A) a license issued under this subchapter is 
                held only by a person whom the Secretary considers 
                qualified to operate an Internet skill game facility; 
                and
                    ``(B) the operation of an Internet skill game 
                facility by a licensee has no material involvement of 
                any person whom the Secretary considers unqualified or 
                unsuitable for such operation.
    ``(d) Approval of License.--
            ``(1) In general.--The Secretary shall issue a license 
        under this subchapter to an applicant if the Secretary 
        determines, after considering the factors described in 
        subsection (c)(2), that the applicant is qualified to operate 
        an Internet skill gaming facility.
            ``(2) Burden of proof.--An applicant for a license under 
        this subchapter has the burden of proving that the applicant is 
        qualified and suitable for such license.
    ``(e) Denial, Restriction, or Revocation of Licenses.--
            ``(1) Denial.--The Secretary may not issue a license under 
        this subchapter to an applicant who has been convicted under 
        the laws of any foreign country, the United States, or any 
        State for any criminal violation involving gambling laws, laws 
        relating to financial markets, or financial laws, including any 
        provisions of law relating to money laundering, fraud, privacy, 
        or information security.
            ``(2) Conditions, limitations, and restrictions.--The 
        Secretary may provide any condition, limitation, or restriction 
        on a license issued under this subchapter that the Secretary 
        considers reasonable to ensure the integrity and fairness of 
        Internet skill game facilities.
            ``(3) Revocation.--The Secretary shall terminate or revoke 
        a license issued to a licensee under this subchapter if the 
        licensee--
                    ``(A) fails to comply with any provision of this 
                subchapter; or
                    ``(B) is convicted of a crime involving the 
                payments system, financial markets, or Internet 
                gambling laws of the United States or of the 
                jurisdiction in which the licensee is located.
            ``(4) Applicability to business entities.--If a licensee or 
        applicant for a license under this subchapter is a corporation, 
        partnership, or other business entity, paragraphs (1) and (3) 
        shall apply with respect to each partner, officer, or director 
        of such corporation, partnership, or entity.
            ``(5) Final action.--An action by the Secretary under this 
        subsection shall be treated as a final action by the Secretary.
    ``(f) Term and Renewal of License.--
            ``(1) Term.--Each license issued by the Secretary under 
        this subchapter shall be issued for a 1-year term beginning on 
        the date of issuance.
            ``(2) Renewal.--The Secretary may renew a license issued 
        under this subchapter in accordance with such requirements as 
        the Secretary shall prescribe to ensure the continued 
        compliance of licensees with the provisions of this subchapter.
    ``(g) Safeguards and Requirements.--
            ``(1) Safeguards.--No person shall receive or retain a 
        license under this subchapter unless the person implements and 
        maintains the following safeguards and mechanisms with respect 
        to any permitted bet or wager:
                    ``(A) Reasonable safeguards to ensure that each 
                individual placing a permitted bet or wager is 18 years 
                of age or older.
                    ``(B) Reasonable safeguards to ensure that each 
                individual placing a permitted bet or wager is 
                physically located in a jurisdiction that permits the 
                operation of an Internet skill game facility at the 
                time the permitted bet or wager is placed.
                    ``(C) Reasonable mechanisms to ensure that all 
                taxes relating to Internet skill games payable to 
                Federal and State governments and to Indian tribes from 
                persons engaged in Internet skill games are collected 
                at the time of any payment of any proceeds of Internet 
                skill games.
                    ``(D) Reasonable mechanisms to ensure that all 
                taxes relating to Internet skill games payable to 
                Federal and State governments and to Indian tribes are 
                collected as required by law.
                    ``(E) Reasonable safeguards to prevent fraud and 
                money laundering as may be prescribed by regulations 
                promulgated by the Secretary.
                    ``(F) Reasonable safeguards to prevent or mitigate 
                social problems that some individuals may experience 
                related to playing Internet skill games.
                    ``(G) Reasonable safeguards to protect the privacy 
                and security of any individual participating in an 
                Internet skill game.
                    ``(H) Reasonable mechanisms to ensure that any 
                assessment required under subsection (h) is paid to the 
                Secretary.
                    ``(I) Such other safeguards and mechanisms as the 
                Secretary may establish by regulation or order.
            ``(2) Requirements.--No person may receive or retain a 
        license under this subchapter unless the person complies with 
        anti-money laundering, anti-fraud, anti-terrorism, and such 
        other regulations, requirements, and limitations as may be 
        prescribed by the Secretary.
    ``(h) Assessments for Administrative Expenses.--
            ``(1) In general.--
                    ``(A) Costs.--The cost of administering this 
                subchapter with respect to each licensee, including the 
                cost of any review or examination of a licensee to 
                ensure compliance with the terms of the license and 
                this subchapter, shall be assessed by the Secretary 
                against the respective licensee by written notice in an 
                amount appropriate to meet the expenses of the 
                Secretary in carrying out such administration, review, 
                or examination.
                    ``(B) Disposition.--Amounts assessed by the 
                Secretary as user fees under subparagraph (A)--
                            ``(i) shall be maintained by the Secretary 
                        solely for use in accordance with clause (ii);
                            ``(ii) shall be available to the Secretary 
                        to cover all expenses incurred by the Secretary 
                        in carrying out this subchapter; and
                            ``(iii) may not be construed to be 
                        Government funds or appropriated monies, or 
                        subject to apportionment for the purposes of 
                        chapter 15 or any other authority.
                    ``(C) Hearing.--Any licensee notified of an 
                assessment under this paragraph shall be granted a 
                hearing by the Secretary if the licensee submits a 
                request for such hearing not later than 20 days after 
                the date on which the notice of such assessment is 
                issued.
                    ``(D) Collection.--
                            ``(i) Referral.--If the licensee fails to 
                        pay an assessment under this paragraph after 
                        the assessment has become final, the Secretary 
                        shall recover the amount assessed by action in 
                        an appropriate United States district court.
                            ``(ii) Appropriateness of assessment not 
                        reviewable.--In any civil action under clause 
                        (i), the validity and appropriateness of the 
                        assessment shall not be subject to review.
            ``(2) Direct and exclusive obligation of licensee.--An 
        assessment on a licensee under paragraph (1)--
                    ``(A) shall be the direct and exclusive obligation 
                of the licensee; and
                    ``(B) may not be deducted from amounts available as 
                deposits to any person placing a permitted bet or 
                wager.
    ``(i) Regulations.--
            ``(1) In general.--Not later than 180 days after the date 
        of the enactment of this subchapter, the Secretary shall 
        prescribe such regulations, safeguards, and testing mechanisms 
        as may be necessary to administer and enforce the provisions of 
        this subchapter.
            ``(2) Changes.--The Secretary may revise or repeal the 
        regulations prescribed under this subsection as the Secretary 
        determines necessary to ensure the integrity and fairness of 
        Internet skill game facilities.
    ``(j) Administrative Provisions.--
            ``(1) General powers of secretary.--The Secretary may--
                    ``(A) require a class of licensees to maintain 
                appropriate procedures to ensure compliance with this 
                subchapter and regulations prescribed under this 
                subchapter;
                    ``(B) examine any licensee and any books, papers, 
                records, or other data of licensees relevant to any 
                recordkeeping or reporting requirements imposed by the 
                Secretary under this subchapter; and
                    ``(C) summon a licensee or an applicant for a 
                license, an officer or employee of a licensee or any 
                such applicant (including a former officer or 
                employee), or any person having possession, custody, or 
                care of the reports and records required by the 
                Secretary under this subchapter to appear before the 
                Secretary or a designee of the Secretary at a time and 
                place named in the summons and to produce such books, 
                papers, records, or other data, and to give testimony, 
                under oath, as may be relevant or material to any 
                investigation in connection with the enforcement of 
                this subchapter or any application for a license under 
                this subchapter.
            ``(2) Administrative aspects of summons.--
                    ``(A) Production at designated site.--A summons 
                issued pursuant to this subsection may require that 
                books, papers, records, or other data stored or 
                maintained at any place be produced at any business 
                location of a licensee or applicant for a license or 
                any designated location in any State or in any 
                territory or other place subject to the jurisdiction of 
                the United States not more than 500 miles distant from 
                any place where the licensee or applicant for a license 
                operates or conducts business in the United States.
                    ``(B) No liability for expenses.--The United States 
                shall not be liable for any expense incurred in 
                connection with the production of books, papers, 
                records, or other data under this subsection.
                    ``(C) Service of summons.--Service of a summons 
                issued under this subsection may be by registered mail 
                or in such other manner calculated to give actual 
                notice as the Secretary may prescribe by regulation.
            ``(3) Contumacy or refusal.--
                    ``(A) Referral to attorney general.--In case of 
                contumacy by a person issued a summons under this 
                subsection or a refusal by such person to obey such 
                summons or to allow the Secretary to conduct an 
                examination, the Secretary shall refer the matter to 
                the Attorney General.
                    ``(B) Jurisdiction of court.--The Attorney General 
                may invoke the aid of any court of the United States 
                within the jurisdiction of which--
                            ``(i) the investigation which gave rise to 
                        the summons or the examination is being or has 
                        been carried on;
                            ``(ii) the person summoned is an 
                        inhabitant; or
                            ``(iii) the person summoned carries on 
                        business or may be found,
                to compel compliance with the summons.
                    ``(C) Court order.--The court may issue an order 
                requiring the person summoned to appear before the 
                Secretary or a delegate of the Secretary to produce 
                books, papers, records, and other data, to give 
                testimony as may be necessary to explain how such 
                material was compiled and maintained, to allow the 
                Secretary to examine the business of a licensee, and to 
                pay the costs of the proceeding.
                    ``(D) Failure to comply with order.--Any failure to 
                obey the order of the court may be punished by the 
                court as a contempt thereof.
                    ``(E) Service of process.--All process in any case 
                under this subsection may be served in any judicial 
                district in which such person may be found.
``Sec. 5383. Financial institutions
    ``(a) Investment Banking.--A person may not be held liable for 
engaging in investment banking activities involving a licensee if such 
activities are performed in compliance with--
            ``(1) the provisions of this subchapter;
            ``(2) the provisions of the Sarbanes-Oxley Act of 2002 (15 
        U.S.C. 7201 et seq.);
            ``(3) the provisions of the Securities Act of 1933 (15 
        U.S.C. 77a et seq.);
            ``(4) the provisions of the Securities Exchange Act of 1934 
        (15 U.S.C. 78a et seq.); and
            ``(5) any other applicable provision of law that governs 
        securities.
    ``(b) Payment and Transaction Processing.--A person may not be held 
liable for engaging in payments processing activities involving a 
licensee if such activities are performed in compliance with the 
provisions of this subchapter.
    ``(c) Financial Institutions.--A financial institution may not be 
held liable for engaging in financial activities and transactions 
involving a licensee if such activities are performed in compliance 
with--
            ``(1) the provisions of this subchapter; and
            ``(2) applicable provisions of Federal, State, and foreign 
        banking laws.
``Sec. 5384. Prohibition and limitation of licenses in States and on 
              Indian lands
    ``(a) State and Indian Tribe Opt Out.--
            ``(1) In general.--A licensee may not accept a permitted 
        bet or wager from an individual physically located in any State 
        or on tribal lands of any Indian tribe that prohibits permitted 
        bets or wagers within such State or tribal lands if the 
        Governor, or other chief executive officer of such State, or 
        head of the tribal government of such Indian tribe informs the 
        Secretary of such prohibition before the end of the 90-day 
        period beginning on the date of the enactment of the Internet 
        Skill Game Licensing and Control Act of 2008, or in accordance 
        with paragraph (3), until such time as any notice of any 
        subsequent repeal of such prohibition becomes effective under 
        paragraph (3).
            ``(2) Limitations imposed by states or indian tribes.--A 
        licensee may not accept a permitted bet or wager with respect 
        to a particular type of Internet skill game in any State or 
        tribal lands of any Indian tribe that prohibits such permitted 
        bet or wager with respect to such particular type of Internet 
        skill game if the Governor, or other chief executive officer of 
        such State, or head of the tribal government of such Indian 
        tribe informs the Secretary of such prohibition, in a manner 
        that clearly identifies the nature and extent of such 
        prohibition, before the end of the 90-day period beginning on 
        the date of the enactment of the Internet Skill Game Licensing 
        and Control Act of 2008, or in accordance with paragraph (3), 
        until such time as any notice of any amendment or repeal of 
        such specific prohibition becomes effective under paragraph 
        (3).
            ``(3) Changes to state or indian tribe limitations.--The 
        establishment, repeal, or amendment by any State or Indian 
        tribe of any prohibition or limitation referred to in paragraph 
        (1) or (2) after the end of the 90-day period beginning on the 
        date of the enactment of the Internet Skill Game Licensing and 
        Control Act of 2008 shall apply, for purposes of this 
        subchapter, with respect to operating an Internet skill game 
        facility in such State or on the tribal lands of such Indian 
        tribe by any licensee beginning on the first January 1 that 
        occurs after the end of the 30-day period beginning on the 
        later of--
                    ``(A) the date on which written notice of such 
                establishment, repeal, or amendment is provided to the 
                Secretary by the Governor, or other chief executive 
                officer of such State, or the head of the tribal 
                government of such Indian tribe; or
                    ``(B) the effective date of such establishment, 
                repeal, or amendment.
    ``(b) Regulation of Internet Skill Gaming by States and Indian 
Tribes.--
            ``(1) In general.--A State or Indian tribe may establish a 
        requirement relating to the regulation of an Internet skill 
        game facility if such requirement--
                    ``(A) applies only to the people in such State or 
                on the tribal lands of such Indian tribe; and
                    ``(B) such requirement provides protection for 
                players of Internet skill games that exceeds the 
                protection provided such players under this subchapter.
            ``(2) Additional limitations imposed by states or indian 
        tribes.--No licensee may accept a permitted bet or wager from 
        an individual physically located in any State or tribal lands 
        of any Indian tribe unless the licensee adheres to those the 
        requirements established by such State or Indian tribe under 
        paragraph (1).
            ``(3) Changes to state or indian tribe limitations.--The 
        establishment, repeal, or amendment of any requirement referred 
        to in paragraph (1) by any State or any Indian tribe after the 
        end of the 90-day period beginning on the date of the enactment 
        of the Internet Skill Game Licensing and Control Act of 2008 
        shall apply, for purposes of this subchapter, with respect to 
        offering an Internet skill game facility in such State or 
        Indian tribe by any licensee beginning on the first January 1 
        that occurs after the end of the 30-day period beginning on the 
        later of--
                    ``(A) the date a notice of such establishment, 
                repeal, or amendment is provided by the Governor, or 
                other chief executive officer of such State, or head of 
                the tribal government of such Indian tribe in writing 
                to the Secretary; or
                    ``(B) the effective date of such establishment, 
                repeal, or amendment.
    ``(c) Enforcing State and Indian Tribe Limitations.--
            ``(1) In general.--The Secretary shall take effective 
        measures to ensure that each licensee complies, as a condition 
        of the license, with any limitation or prohibition imposed by 
        any State or Indian tribe to which the licensee is subject 
        under subsections (a) and (b).
            ``(2) Violations.--It shall be a violation of this 
        subchapter for a licensee to accept knowingly a permitted bet 
        or wager from an individual physically located in a State or in 
        the tribal lands of an Indian tribe for which a notice is in 
        effect under subsection (a) or (b) without complying with all 
        of the prohibitions, limitations, and requirements imposed by 
        such State or Indian tribe under such subsections.
    ``(d) Intermediate Routing.--The intermediate routing of electronic 
data shall not determine the location or locations in which a permitted 
bet or wager is initiated, received, or otherwise made.
``Sec. 5385. Sporting events or contests
    ``(a) Construction.--No provision of this subchapter may be 
construed to permit a bet or wager in connection with a sporting event 
or contest of a sporting league.
    ``(b) Prohibition on Facilitation by Licensees of Bets or Wagers 
Relating to Sporting Events.--
            ``(1) Prohibition.--A licensee may not, as a condition of 
        its license, facilitate a bet or wager in connection with a 
        sporting event or contest of a sporting league.
            ``(2) Enforcement.--The Secretary shall take effective 
        measures to enforce the provisions of paragraph (1).
``Sec. 5386. Safe harbor
    ``It shall be a defense against any prosecution or enforcement 
action under any Federal or State law against a licensee that the 
activity for which the defendant is being prosecuted is authorized 
under, and has been carried out in accordance with, the provisions of 
this subchapter.
``Sec. 5387. Criminal penalties
    ``(a) In General.--Any person who knowingly violates any provision 
of this subchapter shall be fined under title 18, imprisoned for not 
more than 5 years, or both.
    ``(b) Permanent Injunction.--Upon conviction of a person under this 
section, the court may permanently enjoin such person from operating an 
Internet skill game facility.
``Sec. 5388. Rules of construction
    ``(a) No Effect on Prior Law.--No provision of this subchapter may 
be construed as altering or limiting any Federal or State law or 
Tribal-State compact that permitted or regulated Internet skill gaming 
in the United States before the date of the enactment of the Internet 
Skill Game Licensing and Control Act of 2008.
    ``(b) Coordination With Certain Gambling Laws.--No provision of 
this subchapter may be construed as permitting any bet or wager that 
would otherwise violate any provision of--
            ``(1) the Interstate Horse Racing Act of 1978 (15 U.S.C. 
        3001 et seq.);
            ``(2) chapter 178 of title 28;
            ``(3) the Gambling Devices Transportation Act (15 U.S.C. 
        1171 et seq.); or
            ``(4) the Indian Gaming Regulatory Act (25 U.S.C. 2701 et 
        seq.).
``Sec. 5389. Periodic reports by licensees
    ``(a) In General.--Each licensee shall submit to the Secretary, at 
intervals prescribed by the Secretary, a report on the operations of 
the licensee for the most recent period for which such report is 
submitted.
    ``(b) Contents.--Each report submitted by a licensee under 
subsection (a) shall include, for the most recent period for which the 
report is submitted to the Secretary, the following:
            ``(1) A comprehensive statement describing the limitations 
        imposed on the licensee by any State, Indian tribe, or sporting 
        league.
            ``(2) Such other information as the Secretary considers 
        appropriate.
    ``(c) Standardization of Reporting.--The Secretary shall prescribe, 
with respect to reports required under subsection (a)--
            ``(1) standard forms for reporting financial condition, 
        results of operations, and other relevant financial information 
        about licensees;
            ``(2) a uniform code of accounts and accounting 
        classifications to assure consistency, comparability, and 
        effective disclosure of financial information; and
            ``(3) the intervals at which licensees shall submit such 
        reports.
``Sec. 5390. Annual reports by Secretary
    ``(a) In General.--Not later than 18 months after the date of the 
issuance of the first license under this subchapter and annually 
thereafter, the Secretary shall submit to Congress a report on the 
licensing and regulation of operators of Internet skill game 
facilities.
    ``(b) Contents.--Each report required by subsection (a) shall 
include, for the 1-year period ending on the date on which such report 
is submitted to Congress, the following:
            ``(1) Relevant statistical information on applications for 
        licenses under this subchapter and licenses issued under this 
        subchapter.
            ``(2) The amounts collected from licensees under section 
        5382(h).
            ``(3) Information on regulatory or enforcement actions 
        undertaken by the Secretary.
            ``(4) Such other information as may be useful to Congress 
        in evaluating the effectiveness of the provisions of this 
        subchapter, including the effectiveness of such provisions in--
                    ``(A) protecting against underage gambling, social 
                problems that some players may experience related to 
                Internet skill game play, money laundering, and fraud; 
                and
                    ``(B) preventing tax avoidance related to online 
                activities.''.
    (b) Conforming Amendment.--Section 1084(a) of title 18, United 
States Code, is amended--
            (1) by striking ``Whoever'' and inserting ``(1) Except as 
        provided in paragraph (2), any person who''; and
            (2) by adding at the end the following:
    ``(2)(A) The provisions of paragraph (1) shall not apply to a 
permitted bet or wager with respect to a licensee who operates an 
Internet skill game facility.
    ``(B) In this paragraph, the terms `licensee', `operates an 
Internet skill game facility', and `permitted bet or wager' have the 
meaning given such terms in section 5381 of title 31.''.
    (c) Clerical Amendment.--The table of sections for chapter 53 of 
title 31, United States Code, is amended by adding at the end the 
following:

      ``subchapter v--regulation of internet skill game facilities

``Sec. 5381. Definitions.
``Sec. 5382. Establishment and administration of licensing program.
``Sec. 5383. Financial institutions.
``Sec. 5384. Prohibition and limitation of licenses in States and on 
                            Indian lands.
``Sec. 5385. Sporting events or contests.
``Sec. 5386. Safe harbor.
``Sec. 5387. Criminal penalties.
``Sec. 5388. Rules of construction.
``Sec. 5389. Periodic reports by licensees.
``Sec. 5390. Annual reports by Secretary.''.
                                 <all>