[Senate Report 107-16]
[From the U.S. Government Publishing Office]



                                                        Calendar No. 41
107th Congress                                                   Report
                                 SENATE
 1st Session                                                     107-16

======================================================================
                                     


                      AMATEUR SPORTS INTEGRITY ACT

                               __________

                              R E P O R T

                                 OF THE

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                                 S. 718

                             together with

                             MINORITY VIEWS




                  May 14, 2001.--Ordered to be printed

       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                      one hundred seventh congress
                             first session

                     JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska                  ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana                DANIEL K. INOUYE, Hawaii
TRENT LOTT, Mississippi              JOHN D. ROCKEFELLER IV, West 
KAY BAILEY HUTCHISON, Texas              Virginia
OLYMPIA SNOWE, Maine                 JOHN F. KERRY, Massachusetts
SAM BROWNBACK, Kansas                JOHN B. BREAUX, Louisiana
GORDON SMITH, Oregon                 BYRON L. DORGAN, North Dakota
PETER G. FITZGERALD, Illinois        RON WYDEN, Oregon
JOHN ENSIGN, Nevada                  MAX CLELAND, Georgia
GEORGE ALLEN, Virginia               BARBARA BOXER, California
                                     JOHN EDWARDS, North Carolina
                                     JEAN CARNAHAN, Missouri
                       Mark Buse, Staff Director
                   Ann H. Choiniere, General Counsel
               Kevin D. Kayes, Democratic Staff Director
                  Moses Boyd, Democratic Chief Counsel
                Gregg Elias, Democratic General Counsel


                                                        Calendar No. 41
107th Congress                                                   Report
                                 SENATE
 1st Session                                                     107-16

======================================================================



 
                      AMATEUR SPORTS INTEGRITY ACT
                                _______
                                

                  May 14, 2001.--Ordered to be printed

                                _______
                                

       Mr. McCain, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                         [To accompany S. 718]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 718) ``A bill to direct the 
National Institute of Standards and Technology to establish a 
program to support research and training in methods of 
detecting the use of performance-enhancing drugs by athletes, 
and for other purposes'', having considered the same, reports 
favorably thereon with separate amendments and recommends that 
the bill (as amended) do pass.

                          Purpose of the Bill

  The purpose of the legislation is to protect the integrity of 
amateur athletics by addressing athletes' use of performance-
enhancing substances and by implementing the recommendation of 
the National Gambling Impact Study Commission (NGISC) that 
``betting on collegiate and amateur athletic events that is 
currently legal be banned all-together.'' \1\
---------------------------------------------------------------------------
    \1\ ``Final Report,'' National Gambling Impact Study Commission 
(June 1999).
---------------------------------------------------------------------------

                          Background and Needs

  Amateur and Olympic sports competitions engage the public 
because they represent and reflect ideals of American 
character: hard work, self-sacrifice, perseverance, teamwork, 
and individual courage and excellence. These ideals, and the 
perceived integrity of amateur sports, however, are challenged 
by athletes' use of performance-enhancing substances, and by 
gambling, both legal and illegal, on amateur athletes and 
sports contests. Senate bill 718 is intended to ensure the 
integrity of amateur sports by tackling these two scourges. 
First, Title I of the Act establishes a grant program, 
administered by the National Institute of Standards and 
Technology (NIST), to support research into athletes' use of 
performance-enhancing substances and methods of detecting their 
use. The grant program also includes an educational component 
to inform amateur athletes of the risks associated with these 
substances. Title I originated from hearings held by the 
Commerce Committee during the 106th Congress. Second, Title II 
of the Act amends the Ted Stevens Olympic and Amateur Sports 
Act of 1978 to make it unlawful for a government entity to 
authorize or operate, and for a person to operate pursuant to 
such authorization, a wagering scheme based on amateur athletic 
competition. Title II of S. 718 is proposed in response to the 
specific recommendations of the NGISC.
  The need for legislation to address performance-enhancing 
substances became evident during hearings held by the Commerce 
Committee during the 106th Congress. As one witness testified 
on October 20, 1999, ``[d]oping is a matter of ethics, which 
affects not only Olympic athletes but also youth, high school, 
college and professional athletes. The fact is, doping 
threatens to undermine the ethical and physical well-being of 
children.''
  The Committee heard testimony regarding the need for 
independent testing agencies at both the International Olympic 
Committee and United States Olympic Committee levels. Both 
organizations have now established such agencies. The Committee 
also heard testimony regarding the need for increased funding 
of research designed to find new ways of detecting and 
verifying the use of banned substances. Though recent years 
have seen a dramatic increase in the variety and sophistication 
of banned substances, little has been done to foster research 
into their detection.
  The Amateur Sports Integrity Act establishes a grant program, 
administered by NIST, to support research and training in 
methods of detecting athletes' use of performance-enhancing 
substances. The bill also provides grants to educate amateur 
athletes of the risks of using such substances. By targeting 
resources at both research and development, and at education, 
the Act begins the process of reversing the trend of drug use 
in sports, and aims to restore the integrity of athletic 
competition.
  Title II of S. 718 also addresses the integrity of amateur 
sports by implementing a recommendation of the NGISC, a non-
partisan commission Congress established by Public Law 104-169 
and charged with conducting a comprehensive legal and factual 
study of the social and economic impacts of gambling. After 
hearing testimony from hundreds of witnesses and reviewing 
extensive research on gambling, the Commission issued a final 
report in June 1999.
  In its final report, the NGISC reviewed Congress' motivation 
for passing the Professional and Amateur Sports Protection Act 
(PASPA) (Pub. L. 102-559) in 1992, which made it illegal in all 
but a handful of states for a government entity to authorize or 
operate, and for a person to operate pursuant to such 
authorization, a wageringscheme based on athletic competition, 
and quoted a statement by Senator Bill Bradley about gambling's harmful 
effects on athletes and on sports:

          Based on what I know about the dangers of sports 
        betting, I am not prepared to risk the values that 
        sports instill in youth just to add a few more dollars 
        to state coffers. * * * State sanctioned sports betting 
        conveys the message that sports are more about money 
        than personal achievement and sportsmanship. In these 
        days of scandal and disillusionment, it is important 
        that our youngsters not receive this message * * * 
        sports betting threatens the integrity of and public 
        confidence in professional and amateur team sports, 
        converting sports from wholesome entertainment into a 
        vehicle for gambling * * * sports gambling raises 
        people's suspicions about point-shaving and game-fixing 
        * * * All of this puts undue pressure on players, 
        coaches, and officials.\2\
---------------------------------------------------------------------------
    \2\ NGISC ``Final Report'', p. 3-9, statement of Senator Bill 
Bradley submitted with the testimony of Nancy Price to the NGISC on 
November 10, 1998.

  In addition to addressing harm that gambling, both legal or 
illegal, does to athletes and to the public's perception of the 
integrity of amateur sports, the NGISC also observed a causal 
relationship between legal and illegal gambling. Not only does 
allowing gambling on amateur sports to continue in one state, 
Nevada, send a confusing message to people who often do not 
know that the majority of sports wagering in America is 
illegal, the NGISC observed that ``[l]egal sports wagering-
especially the publication in the media of Las Vegas and 
offshore-generated point spreads-fuels a much larger amount of 
illegal wagering.'' Although gambling on college sports is 
illegal in 49 states, the Las Vegas college sports line is 
published nationwide. In her written testimony for an April 26, 
2001, hearing in the Commerce Committee, Tracy Dodds, an 
associate sports editor for the Cleveland Plain Dealer, 
confirmed the NGISC's assumptions. While only a few newspapers 
currently refuse to publish college point spreads, she noted, 
``[w]hat I have heard from other sports editors leads me to 
believe that [if gambling on amateur sports was not legal in 
Nevada] most newspapers would take the same position and stop 
publishing college betting lines-which would take away the 
legitimacy college gambling gets from being included in daily 
newspapers.''
  The nexus between legal and illegal gambling is evident not 
only in the publication nationwide of Las Vegas-generated point 
spreads, but in the involvement of Nevada sports books in 
recent point shaving scandals and prohibited sports gambling in 
the United States. Point shaving schemes at Northwestern 
University and at Arizona State University involved heavy 
betting by participants in Nevada sports books. At a February 
1, 2000, press conference, Kevin Pendergast, the young man who 
orchestrated the Northwestern University gambling scandal, 
discussed the critical role of the Las Vegas sports books in 
his scheme and stated, ``without Nevada, the Northwestern 
basketball point-sharing scandal wouldn't have occurred.'' \3\ 
College athletes, of course, are not the only people who place 
wagers obtained in illegal gambling operations on Nevada sports 
books. Steve DuCharme, former chairman of the Nevada State 
Gaming Control Board said in a 1999 interview, ``A lot of money 
made through illegal gambling is laid off in Las Vegas. If a 
bookie has a lot of money on one side of a bet, they bet the 
other one in Las Vegas to try to even the bet.'' \4\
---------------------------------------------------------------------------
    \3\ Fredreka Schouten, Gambling Ban Aims to End College Amateur 
Sports Gambling, The Tennessean, Feb. 2, 2000.
    \4\ Donald L. Barlett and James B. Steele, Time, September 25, 
2000, p. 62.
---------------------------------------------------------------------------
  In addition to expressing concerns about the impact legal 
gambling has on student athletes and how it might fuel illegal 
gambling, the NGISC also noted the extent of sports wagering 
among America's youth. ``While studies of college gambling are 
sparse, Lesieur has found in a survey of six colleges in five 
states that 23 percent of students gambled at least once a 
week. The same study found that between 6 and 8 percent of 
college students are ``probable problem gamblers. * * *'' \5\ 
As for gambling among college athletes, a University of 
Michigan Athletic Department study found that more than 45 
percent of male college athletes admitted to betting on 
sporting events, and more than 5 percent of male student 
athletes provided inside information for gambling purposes, bet 
on a game in which they participated, or accepted money for 
performing poorly in a game.\6\
---------------------------------------------------------------------------
    \5\ Henry Lesieur, et al., Gambling and Pathological Gambling Among 
University Students, Addictive Behavior (1991) at 517-527.
    \6\ ``The Extent and Nature of Gambling Among College Student 
Athletes.'' Michael E. Cross and Ann G. Vollano, University of Michigan 
Athletic Department, 1999.
---------------------------------------------------------------------------
  In its final report, the NGISC was unequivocal about what 
should be done to address concerns with gambling on amateur 
sports. Noting that sports wagering does not provide many of 
the positive impacts of other forms of gambling, but does have 
negative social impacts, the NGISC recommended that ``betting 
on collegiate and amateur athletic events that is currently 
legal be banned altogether.'' \7\
---------------------------------------------------------------------------
    \7\ NGISC, ``Final Report,'' p. 3-18.
---------------------------------------------------------------------------
  Although the NGISC believed Congress has the authority and 
the responsibility to ban gambling on amateur sports throughout 
the country, concerns were raised during the Commerce 
Committee's consideration of S. 718 about regulating amateur 
sports gambling at the federal level.
  A number of federal laws prohibit the use of the channels of 
interstate commerce to facilitate gambling activities. The 
``Wire Act,'' 18 U.S.C. 1804, for example, prohibits gambling 
businesses from using wire communications facilities for the 
transmission in interstate or foreign commerce of bets or 
wagers, or information that assists in the placing of bets or 
wagers. Although this statute makes specific reference to the 
placing of bets or wagers on ``sporting events or contests,'' 
the Wire Act does not address the regulation of state-
sanctioned sports gambling within a state. This issue, however, 
was addressed directly by Congress almost a decade ago.
  While Congress has recognized the principal of federalism 
with respect to regulating gambling, the compelling federal 
interest in ensuring the integrity of America's sporting 
competitions led to the enactment in 1992 of the Professional 
and Amateur Sports Protection Act (PASPA). PASPA effectively 
outlawed gambling on amateur sports in all but a handful of 
states. In its report on PASPA, the Senate Judiciary Committee 
explained that ``sports are nationalinstitutions and Congress 
has recognized a distinct federal interest in protecting sports from 
corruption.'' \8\
---------------------------------------------------------------------------
    \8\ Report 102-248 to accompany S. 474, Senate Judiciary Committee, 
102d Congress, 1st Session.
---------------------------------------------------------------------------
  Today, Nevada is the only state in the country that permits 
gambling on amateur sports. Senate bill 718 would close this 
loophole left open by PASPA. The Amateur Sports Integrity Act 
is supported by a broad array of athletic organizations, pro-
family groups, consumer groups, and universities.
  Opponents of S. 718 have argued that the measure will not 
prevent illegal gambling. On this point, supporters and 
opponents agree. It is not suggested that this bill will end 
gambling on college sports. It will, however, send a consistent 
message that betting on college sports is wrong, and is illegal 
throughout the country. The NGISC believed that this 
legislation would also help reduce illegal gambling in part by 
reducing the publication of point spreads on college games. 
Most importantly, however, a ban on college sports gambling 
will help to end a practice that turns college athletes into 
objects to openly be bet on. In written testimony submitted for 
the record in support of S. 718, the Reverend Edward Malloy, 
President of the University of Notre Dame explained, ``I, and 
all of us who support this legislation, know that its passage 
isn't the end of our battle with gambling. Far from it. But it 
is a crucial step because it enshrines in federal law the 
principle that the athletic victories and defeats of amateur 
athletes--student athletes--often, teenage athletes--should not 
be a legal source of revenue for the professional gambling 
industry.'' \9\
---------------------------------------------------------------------------
    \9\ Testimony of Rev. Edward A. Malloy, submitted for the Commerce 
Committee hearing on April 26, 2001.
---------------------------------------------------------------------------

                          Legislative History

  The Commerce Committee held a hearing on the Amateur Sports 
Integrity Act on April 26, 2001, during which 22 witnesses, 
including members of Congress, testified in favor of or against 
the measure.
  On May 3, 2001, the Committee met in open executive session 
to consider the Act. By voice vote, the Committee rejected 
amendments offered by Senators Boxer and Breaux. The amendment 
offered by Senator Boxer would have raised the minimum age for 
legal gambling to 21. The amendment proposed by Senator Breaux 
would have required colleges and universities to provide 
procedural protections, including retention of independent 
legal counsel, for student athletes accused of violating 
amateur sports rules.
  Also by voice vote, the Committee adopted amendments offered 
by Senators Breaux, Inouye, and Ensign, amendments which were 
reported separately from the bill. One such amendment offered 
by Senator Breaux requires colleges to report annually on the 
occurrence of illegal gambling, including Internet gambling, 
and to submit annually a statement of policy regarding underage 
and other illegal gambling activity. A second amendment offered 
by Senator Breaux was intended to clarify that the Act does not 
prohibit purely social betting through office pools in which 
all of the money paid into the pool in entry fees is paid out 
to winning participants. The third amendment offered by Senator 
Breaux and also adopted separately from the bill by the 
Committee prohibits financial institutions from accepting 
certain credit or proceeds of credit in connection with 
unlawful Internet gambling. The Committee also accepted by 
voice vote a second degree amendment offered by Senator Inouye 
addressing the impact of Senator Breaux's Internet gambling 
amendment on Indian tribes.
  One of the amendments offered by Senator Ensign and adopted 
separately from the bill by voice vote modifies the Child 
Online Protection Act (47 U.S.C. 231 nt) to require 
institutions of higher learning to monitor the use of wire 
communication facilities to detect violations of 18 U.S.C. 
1084. A second amendment offered by Senator Ensign and adopted 
separately from the bill provides for an expedited judicial 
review of the constitutionality of the provision regarding 
amateur sports gambling, and stays the enforcement of this 
provision until the Supreme Court has finally disposed of the 
case on its merits.

                            Estimated Costs

  In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                       Washington, DC, May 9, 2001.
Hon. John McCain,
Chairman, Committee on Commerce, Science, and Transportation,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 718, the Amateur 
Sports Integrity Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contracts are Ken 
Johnson and Mark Hadley (for federal costs), Shelley Finalyson 
(for impacts on state and local governments), and Paige Piper/
Bach (for private-sector impacts).
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

S. 718--Amateur Sports Integrity Act

    Summary: S. 718 would authorize the National Institute of 
Standards and Technology (NIST) to make grants for research on 
performance-enhancing substances and methods for detecting 
their use by athletes. The bill also would authorize NIST to 
fund prevention and intervention programs related to the use of 
such substances by high school or college athletes. In 
addition, S. 718 would prohibit gambling businesses from 
accepting credit cards and other bank instruments from gamblers 
who illegally get over the Internet. The bill also would 
authorize the agencies that regulate insured depository 
institutions to issue cease-and-desist orders against 
institutions that knowingly facilitate Internet gambling.
    Assuming appropriation of the authorized amounts, CBO 
estimates that implementing S. 718 would cost about $25 million 
over the 2002-2006 period. Because S. 718 would impose costs on 
federal banking regulators, we also estimate that the bill 
would have a negligible impact on both direct spending and 
revenues. Therefore, pay-as-you-go procedures would apply.
    S. 718 contains intergovernmental and private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
The bill would prohibit any governmental or private-sector 
entity from operating or authorizing any wagering on amateur 
sports and also would require colleges to compile and report 
gambling information and policies in a specified manner. CBO 
estimates that the costs associated with complying with the 
mandates would not exceed the thresholds established by the act 
($56 million for intergovernmental mandates and $113 million 
for private-sector mandates in 2001, adjusted annually for 
inflation). S. 718 also would require public and private 
institutions of higher education, effectively as a condition of 
receiving federal education funding for the following year, to 
monitor their wire communications facilities for use in illegal 
gambling. Finally, the bill would establish research grant 
programs that could benefit public and private educational 
institutions.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 718 is shown in the following table. The 
costs of this legislation fall within budget function 370 
(commerce and housing credit).

----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2002     2003     2004     2005     2006
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Authorization Level................................................        7        7        7        7        7
Estimated Outlays..................................................        1        4        6        7        7
----------------------------------------------------------------------------------------------------------------
Note.--The bill would also result in an increase in direct spending and a loss of revenues, but the amounts
  involved would be less than $500.00 a year.

    Basis of estimate: Assuming appropriation of the authorized 
amounts, CBO estimates that enactment of S. 718 would result in 
a $25 million increase in discretionary spending over the 2002-
2006 period and would have a negligible impact on direct 
spending and revenues. For this estimate, CBO assumes that the 
bill will be enacted late in fiscal year 2001.

Spending Subject to Appropriation

    S. 718 would authorize the appropriation of $7 million a 
year over the 2002-2006 period for NIST to make grants for 
research on the use of performance-enhancing drugs and for 
program to prevent the use of such drugs by amateur athletes. 
For this estimate, CBO assumes that outlays will follow the 
spending patterns of other NIST grant programs.
    Because S. 718 would establish a new federal crime relating 
to Internet gambling, the federal government would be able to 
pursue cases that it otherwise would not be able to prosecute. 
CBO expects, however, that most cases would be pursued under 
state law. Therefore, we estimate that any increase in federal 
costs for law enforcement, court proceedings, or prison 
operations would not be significant. Any such additional costs 
would be subject to the availability of appropriated funds.

Direct Spending and Revenues

    The Office of the Comptroller of the Currency (OCC), the 
Board of Governors of the Federal Reserve System, the Federal 
Deposit Insurance Corporation (FDIC), the Office of Thrift 
Supervision (OTS), and the National Credit Union Administration 
(NCUA) would enforce the provisions of S. 718 as they apply to 
financial institutions. The NCUA, the OTS, and the OCC charge 
fees to the institutions they regulate to cover all of their 
administrative costs; therefore, any additional spending by 
these agencies to implement the bill would have no net 
budgetary effect. That is not the case with the FDIC, however, 
which uses insurance premiums paid by all banks to cover the 
expenses it incurs to supervise state-chartered banks. The 
bill's requirement that the FDIC prevent financial institutions 
from knowingly facilitating Internet gambling would cause a 
small increase in FDIC spending, but would not affect its 
premium income. In total, CBO estimates that S. 718 would 
increase net direct spending of the NCUA, OTS, OCC, and FDIC by 
less than $500,000 a year over the 2002-2006 period.
    Budgetary effects on the Federal Reserve are recorded as 
changes in revenues (governmental receipts). Based on 
information from the Federal Reserve, CBO estimates that 
enacting S. 718 would reduce such revenues by less than 
$500,000 a year over the 2002-2006 period.
    Because those prosecuted and convicted under the bill could 
be subject to criminal fines, the federal government might 
collect additional fines if the bill is enacted. Collections of 
such fines are recorded in the budget as governmental receipts 
(i.e., revenues), which are deposited in the Crime Victims Fund 
and spent in subsequent years. Any additional collections under 
S. 718 are likely to be negligible because of the small number 
of cases involved. Because any increase in direct spending 
would equal the amount of fines collected (with a lag of one 
year or more), the additional direct spending also would be 
negligible.
    Pay-as-you-go consideration: The Balanced Budget and 
Emergency Deficit Control Act sets up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. Enacting 
S. 718 could affect both direct spending and receipts, but CBO 
estimates that any such effects would be negligible.

Intergovernmental and Private Sector Impact

            Mandates
    S. 718 contains intergovernmental and private-sector 
mandates as defined by UMRA, but CBO estimates that complying 
with those mandates would not exceed the thresholds established 
in the act ($56 million for intergovernmental mandates and $113 
million for private-sector mandates in 2001, adjusted annually 
for inflation). CBO estimates that the prohibition on wagering 
on amateur sports would reduce tax revenues collected by the 
state of Nevada by approximately $3 million per year. Based on 
information from the Nevada Gaming Control Board, CBO estimates 
that because of this prohibition the private sector would lose 
about $45 million annually in net income (measured as the 
amount wagered less the amount paid out). In addition, CBO 
estimates that the requirement that colleges report certain 
gambling information and policies would increase costs to 
public and private colleges and universities. The amount of any 
increase is uncertain, but it is expected to be small because 
the colleges are already required to compile similar 
information on crime and policies on substance use.
            Other Impacts
    S. 718 would require public and private institutions of 
higher education, effectively as a condition of receiving 
federal education funding for the following year, to monitor 
their wire communications facilities for the purpose of 
detecting their use in illegal gambling. CBO cannot estimate 
the total costs associated with this condition because it is 
unclear what activities would be necessary to comply with the 
bill's requirement to ``monitor'' wire communications 
facilities.
    S. 718 would also benefit any public and private 
educational institutions that qualify for the grant programs 
that would be established by the bill. The bill would authorize 
$4 million annually for fiscal years 2002 through 2006 for drug 
research and detection grants and $3 million annually for 
fiscal years 2002 through 2006 for intervention and prevention 
grants.
    Estimate prepared by: Federal Costs: Ken Johnson and Mark 
Hadley. Revenues: Carolyn Lynch and Erin Whitaker. Impact on 
State, Local, and Tribal Governments: Shelley Finlayson. Impact 
on the Private Sector: Paige Piper/Bach.
    Estimate approved by: Robert A. Sunshine, Assistant 
Director for Budget Analysis.

Regulatory Impact Statement

  In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:

                       number of persons covered

                            economic impact

  Currently, wagering on college sports is legal only in the 
State of Nevada. According to the Nevada Gaming Control Board, 
$2.324 billion was wagered on legal sports books in Nevada in 
2000, and casinos retained $123.8 million of this amount. 
College sports betting is believed to account for between 30 
and 35 percent of these sports wagers.

                                privacy

  Senate bill 718 modifies the Child Online Protection Act (47 
U.S.C. 231 nt) to require institutions of higher learning to 
monitor the use of wire communication facilities to detect 
violations of the ``Wire Act'' (18 U.S.C. 1084).

                               paperwork

  Senate bill 718 requires colleges and universities to report 
annually on the occurrence of illegal gambling, including 
Internet gambling, and to submit annually a statement of policy 
regarding underage and other illegal gambling activity. This 
section of the bill will result in increased paperwork for 
affected colleges and universities.

                      Section-by-Section Analysis


                  Title I--Performance Enhancing Drugs

Section 101. Short title

  This section provides that this title may be cited as the 
``Athletic Performance-Enhancing Drugs Research and Detection 
Act.''

Section 102. Research and detection program established

  Subsection (a) requires the Director of the National 
Institute of Standards and Technology (NIST) to establish a 
program to support research into the use of athletic 
performance-enhancing drugs and methods of detecting their use.
  Subsection (b) describes the type of research to be funded by 
the grant. The subsection requires the Director to consider 
research proposals involving athletic performance-enhancing 
substances banned by the International Olympic Committee, the 
United States Olympic Committee, the National Collegiate 
Athletic Association, the National Football League, the 
National Basketball Association and Major League Baseball. 
Specific substances to be studied should include naturally-
occurring steroids, testosterone, human growth hormone and 
erythropoietin. The grants should also fund research on 
different population groups to ensure the tests are applicable 
to men, women, and differing ethnic groups. The subsection also 
prohibits use of the grants for research into drugs of abuse 
such as cocaine, marijuana, morphine/codeine, and barbiturates.
  Subsection (c) establishes procedures for the award of 
grants. The subsection requires the Director to establish 
appropriate scientific peer review procedures for evaluating 
grant applications and results of research funded. The Director 
is also required to establish minimum criteria for the award of 
grants. This subsection requires a minimum grant award of not 
less than 500 thousand dollars per fiscal year. Applicants must 
demonstrate a record of publication and research in the area of 
athletic drug testing; provide a plan detailing the direct 
transfer of the research to lab applications; and certify that 
it is a not-for-profit research program.
  Subsection (d) authorizes 4 million dollars per year for 
fiscal years 2002, 2003, 2004, 2005, and 2006 to carry out the 
purposes of this section.

Section 103. Prevention and intervention programs

  Subsection (a) requires the Director of NIST to establish a 
grant program to fund educational substance abuse prevention 
and intervention programs related to the use of performance-
enhancing drugs. This subsection also requires the Director to 
establish minimum criteria for grant applicants.
  Subsection (b) requires a minimum individual grant award of 
not less than $300,000 per fiscal year.
  Subsection (c) authorizes 3 million dollars per year for 
fiscal years 2002, 2003, 2004, 2005, and 2006 to carry out the 
purposes of this section.

                           Title II--Gambling

Section 201. Prohibition on gambling on competitive games involving 
        high school and college athletes and the Olympics

  Amends the Ted Stevens Olympic and Amateur Sports Act 
(chapter 2205 of title 36, United States Code), creating a new 
subchapter III containing section 220541.
  Subsection (a) of the new section 220541 establishes a 
prohibition on any governmental entity, or person, from 
sponsoring, operating, advertising, promoting, licensing, or 
authorizing by law or compact a lottery, sweepstake, or other 
betting, gambling, or wagering scheme based, directly or 
indirectly, on a competitive game or performance described in 
subsection (b).
  Subsection (b) describes the covered competitive game or 
performance as:
           One or more competitive games at the Summer 
        or Winter Olympics.
           One or more competitive games in which high 
        school or college athletes participate.
           One or more performances of high school or 
        college athletes in a competitive game.
  Subsection (c) provides that the prohibition of subsection 
(a) applies to activity described in that subsection without 
regard to whether the activity would be permitted under the 
Professional and Amateur Sports Protection Act. This subsection 
also creates an exception to the prohibited activity if all 
monies paid by the participants as entry fees are paid out to 
winning participants.
  Subsection (d) provides that a civil action to enjoin a 
violation under the Act may be commenced in an appropriate 
district court of the United States by the Attorney General of 
the United States, local education agency, college, or sports 
organization, including an amateur sports organization or the 
corporation whose competitive game is alleged to be the basis 
of a violation under the Act.
  Subsection (e) requires colleges that submit an annual report 
on information on criminal offenses under the Higher Education 
Act of 1965 (20 U.S.C. 1092(f)) to include statistics and 
information on the occurrence of illegal gambling, including 
Internet gambling, at such college. This subsection also 
requires colleges that submit annual policy statements on 
alcoholic beverages and underage drinking under the Higher 
Education Act of 1965, to include in their reports, statements 
of policy regarding underage and other illegal gambling 
activity at such colleges or universities, which includes any 
gambling abuse education programs that the colleges make 
available to students and employees. This subsection requires 
the United States Attorney General, in consultation with the 
Secretary of Education, periodically to review the policies, 
procedures, and practices of colleges with respect to campus 
crime and security related to illegal gambling.
  Subsection (f) defines the following terms used in the new 
section:
           ``High School'' as having the same meaning 
        as ``secondary school'' in section 14101 of the 
        Elementary and Secondary Education Act of 1965 (U.S.C. 
        8801) or (ESEA).
           ``College'' as having the same meaning as 
        institution of higher education in the ESEA.
           ``Local Education Agency'' as having the 
        same meaning as that term in the ESEA.

Section 202. Judicial review

  Subsection (a) provides that any persons adversely affected 
by section 220541 of the Ted Stevens Olympic and Amateur Sports 
Act may bring an action in the United States District Court for 
the District of Columbia for declaratory judgment and 
injunctive relief on the ground that this new subchapter 
violates the Constitution.
  Subsection (b) provides a direct appeal to the Supreme Court 
of the United States for the review of any judicial order 
granting or denying an injunction regarding, or finally 
disposing of, an action brought under subsection (a). A notice 
of appeal is to be filed within 10 calendar days after the 
order is entered, and the jurisdictional statement is to be 
filed within 30 calendar days after the order is entered.
  Subsection (c) provides that the District Court for the 
District of Columbia and the Supreme Court of the United States 
should expedite to the greatest possible extent, the 
disposition of any matter brought under subsection (a).
  Subsection (d) stays the enforcement of any provision of 
section 220541 of title 36 for the period beginning on the date 
of filing of an action described under subsection (a), and 
ending on final disposition of the action on the merits by the 
Supreme Court of the United States.
  Subsection (e) provides that this section applies to actions 
filed under subsection (a) not later than 30 days after the 
effective date of the Act.

                      Title III--Internet Gambling

Section 301. Short title

  This section provides that this title may be cited as the 
``Unlawful Internet Gambling Funding Prohibition Act''.

Section 302. Findings

  This section provides that Congress makes the following 
findings: Internet gambling is primarily funded through bank 
instruments; the NGISC recommended legislation prohibiting wire 
transfers to Internet gambling sites or banks that represent 
them; Internet gambling causes debt collection problems for 
insured depository institutions and the consumer credit 
industry; and offshore Internet gambling has been identified by 
United States law enforcement as a significant money laundering 
vulnerability.

Section 303. Prohibition on acceptance of any bank instrument for 
        lawful Internet gambling

  Subsection (a) prohibits financial institutions from 
knowingly accepting, in connection with the participation of 
another person in unlawful Internet gambling--credit, or the 
proceeds of credit, extended to such other person, or the 
proceeds of any other form of financial transaction as the 
Secretary 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.
  Subsection (b) defines the following terms used in this 
section:
           ``Bets or wagers'' 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, 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.
           ``Internet'' means the international 
        computer network of interoperable packet switched data 
        networks.
           ``Unlawful Internet gambling'' means 
        placing, receiving, or otherwise making a bet or wager 
        by any means which involves the use, at least in part, 
        of the Internet where such bet or wager is unlawful 
        under any applicable Federal or State law in the State 
        in which the bet or wager is initiated, received, or 
        otherwise made. Notwithstanding the definition of 
        ``unlawful Internet gambling,'' an Indian tribe may 
        conduct Class III Internet gambling under a tribal-
        State compact.
           ``Credit,'' ``creditor,'' and ``credit 
        card'' as having the same meanings given in section 103 
        of the Truth in Lending Act (15 U.S.C. 1602).
           ``Electronic fund transfer'' as having the 
        meaning given such term in section 903 of the 
        Electronic Fund Transfer Act (15 U.S.C. 1693a), and 
        includes any fund transfer covered by Article 4 of the 
        Uniform Commercial Code as in effect in any State.
           ``Financial institution'' as having the same 
        meaning given in section 903 of the Electronic Fund 
        Transfer Act (15 U.S.C. 1693a).
           ``Money transmitting business'' and ``money 
        transmitting service'' as having the same meanings 
        given in section 5330(d) of title 31, United States 
        Code.
           ``Secretary'' means the Secretary of the 
        Treasury.
  Subsection (c) provides original and exclusive jurisdiction 
to the district courts of the United States 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. The United 
States Attorney General may institute proceedings under this 
section. In accordance with Rule 65 of the Federal Rules of 
Civil Procedure, the district court may enter a preliminary 
injunction or an injunction against any person to prevent or 
restrain a violation of this section. The attorney general of a 
State may also institute proceedings under this section. The 
district court may provide the same relief as with proceedings 
initiated by the United States Attorney General. 
Notwithstanding the jurisdiction provided under this 
subsection, for alleged violations on Indian lands, the United 
States is provided the same enforcement authority as previously 
provided in this subsection, and the enforcement authorities 
specified in an applicable Tribal-State compact under section 
11 of the Indian Gaming Regulatory Act shall be carried out in 
accordance with that compact. In addition to any proceedings 
provided under this subsection, the 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 or the attorney general 
of an affected State, in accordance with Rule 65(b) of the 
Federal Rules of Civil Procedure.
  Subsection (d) establishes criminal penalties for a violation 
of this section of a fine under title 18, United States Code or 
imprisonment of not more than 5 years, or both. Upon conviction 
of a person under this subsection, 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.
  Subsection (e) provides a safe harbor for financial 
intermediaries. This subsection provides that no creditor, 
credit card issuer, financial institution, operator of a 
terminal at which an electronic fund transfer may be initiated, 
money transmitting business, or national, regional or local 
network used to affect a credit transaction, electronic fund 
transfer, or money transmitting service shall be liable under 
this section for the involvement of such person, or the use of 
the facilities of such person--in any credit transaction, 
electronic fund transfer, or money transmitting service 
described in subsection (a); or in drawing, paying, 
transferring, or collecting any check, draft, or other 
instrument described in subsection (a) or in any regulation 
prescribed under such subsection. The safe harbor does not 
apply to any person that is a gambling business or that 
knowingly participates in certain activities as an agent or 
representative of a gambling business.

Section 304. Enforcement actions

  Amends section 8 of the Federal Deposit Insurance Act (12 
U.S.C. 1818) by adding a subsection (x) that provides that 
notwithstanding section 303(e) of the Unlawful Internet 
Gambling Prohibition Act, if any appropriate Federal financial 
agency determines that any insured depository institution is 
engaged in certain activities with actual knowledge that any 
person is violating section 303(a) of the Unlawful Internet 
Gambling Prohibition Act, the agency may issue an order 
prohibiting the institution from continuing to engage in the 
activity.

Section 305. Monitoring by institutions of higher education of 
        transmissions of wagering information through the Internet

  Subsection (a) amends the Child Online Protection Act to 
require each institution of higher education to monitor the use 
of its wire communications facilities for purposes of detecting 
the use of those facilities for transmissions described in the 
Wire Act, 18 U.S.C. 1084(a). Any such institution that fails to 
so monitor is ineligible for Federal education funding in the 
following academic year.
  Subsection (b) provides an effective date of one year after 
the date of enactment.

Section 306. Savings clause

  Provides that nothing in this Act shall be construed to 
alter, affect, or waive any existing rights of Indian tribes 
pursuant to the Indian Gaming Regulatory Act.

                      Rollcall Votes In Committee

  In accordance with paragraph 7(c) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following description of the record votes during its 
consideration of S. 718:
  Although the Committee considered a number of amendments by 
voice vote, it conducted only one roll call vote on an 
amendment offered by Senator Ensign to preserve the grandfather 
for college sports wagering in the Professional and Amateur 
Sports ProtectionAct. By a rollcall vote of 10 yeas and 10 nays 
as follows, the amendment was defeated:
        YEAS--10                      NAYS--10
Mr. Burns                           Mr. McCain
Mr. Lott                            Mrs. Hutchison
Mr. Smith                           Ms. Snowe
Mr. Ensign                          Mr. Brownback
Mr. Allen                           Mr. Fitzgerald
Mr. Rockefeller                     Mr. Hollings
Mr. Breaux                          Mr. Inouye
Mr. Wyden                           Mr. Dorgan
Mr. Cleland                         Mr. Edwards
Ms. Boxer                           Ms. Carnahan

  MINORITY VIEWS OF SENATOR ENSIGN, SENATOR BREAUX, AND SENATOR BOXER

  We agree with the majority of the members of the Commerce 
Committee that illegal sports gambling is a serious and 
pervasive problem on our college campuses and in society at 
large. Having heard the testimony of the foremost expert on 
addictive behavior, we are particularly concerned that underage 
college students and other young people are twice as likely to 
suffer from problem and pathological gambling as the adult 
population. Further, several witnesses testifying before the 
Committee acknowledged that the illegal gambling trade and 
illegal college bookies is a problem of epic proportions.
  Nonetheless, as overwhelming evidence and witness testimony 
demonstrate, it is illegal sports gambling on college campuses, 
and illegal sports gambling over the Internet--not lawful and 
highly regulated sports gambling in states such as Nevada--that 
create the pathology facing youth addicted to gambling. Simply 
put, S. 718 does nothing to resolve the problem caused by 
illegal gambling. S. 718 does nothing to police the activities 
of illegal bookies on college campuses. S. 718 does not 
strengthen the penalties for such criminal behavior. S. 718 is 
a solution in search of a problem.
  Unlawful gambling on sports represents the vast majority of 
illegal wagers conducted annually within U.S. borders, and it 
is a widespread problem among college students. According to 
the congressionally mandated National Gambling Impact Study 
Commission (NGISC), between 80 and 380 billion dollars is 
wagered illegally on sporting events every year. During the 
hearing on S. 718, witnesses cited two academic studies--a 
University of Michigan survey and a University of Cincinnati 
study--that found illegal gambling on college campuses to be of 
epidemic proportion. The University of Michigan survey found 
that nearly half (45 percent) of all male student-athletes 
nationwide gambled illegally on college and professional 
sports. The University of Cincinnati study conducted on behalf 
of the National Collegiate Athletic Association (NCAA) found 
that a quarter of the NCAA Division I male basketball and 
football student-athletes gambled on games in which they 
played. Students are placing bets with illegal college bookies 
across our nation and over the Internet. By and large, they are 
not placing bets in Nevada--where you have to be 21 years of 
age and physically present within the state's borders.
  Yet, proponents of S. 718 want to combat illegal gambling by 
eliminating legal sports wagering in Nevada. Unfortunately, 
this misguided legislation will actually increase the 
likelihood of future point shaving/game fixing scandals by 
removing the only oversight currently in place to ensure the 
games' integrity--the Nevada sports books. 640 million dollars 
is wagered annually on college games, and lawful gambling in 
Nevada is highly regulated by the Nevada Gaming Commission and 
State Gaming Control Board. The prohibition of legal gambling 
S. 718 forces on the State of Nevada--in contravention to the 
will and wisdom of her people--will drive gambling underground 
and prevent the legitimate regulation of gambling.
  Nevada's sports books electronically monitor all games, and 
any unusual wagering activity is easily detected. Furthermore, 
it is in the financial best interest of the sports books to 
maintain the games' integrity--any impropriety (point shaving/
game fixing) can result in significant financial losses for all 
parties involved. Thus, the Nevada sports books were the first 
to inform the Federal Bureauof Investigation (FBI) of the 
Arizona State scandal in 1994 according to a December 2000 interview 
with FBI Special Agent Tom Noble. Without the cooperation of the Nevada 
sports books, the Arizona State scandal would have gone undetected and 
those responsible would have gone free. If intercollegiate athletic 
events are removed from the Nevada sports books, expert witnesses 
before the Committee predict a subsequent rash of attempts to tamper 
with the outcome of games, most of them undetected. More specifically, 
Danny Sheridan, a leading sports analyst and odds-maker for USA Today, 
testified before the Committee stating that ``between 30 and 40 games 
will be fixed within 90 days'' of enactment of S. 718.
  It is noteworthy that to date not one witness from law 
enforcement--federal, state or local--has testified before 
Congress on the practical effects of S. 718. The only law 
enforcement witness, however, to comment on illegal gambling 
and banning legal amateur sports wagering appeared before the 
NGISC in 1998. Detective Edward Galanek--an undercover officer 
and expert on organized crime and gambling cases--testified 
that he had ``firsthand knowledge of how important illegal 
gambling operations were to the daily business of organized 
crime'' and that ``legalized sports betting is clearly an 
answer to the illegal problem.'' Unfortunately, the Committee's 
request to have Detective Galanek testify during deliberations 
on S. 718 was denied. However, his 1998 testimony further 
proves the indelible link between organized crime and illegal 
gambling, as well as emphasizing that our law enforcement 
efforts should be directed at combating the illegal gambling 
trade.
  Despite evidence to the contrary, proponents of S. 718 argue 
that prohibiting amateur sports betting in Nevada will 
eliminate the publishing of betting lines on college athletic 
events. However, newspapers are neither the primary nor the 
exclusive source of betting lines. The lines will continue to 
be available via offshore Internet websites and in newspapers, 
as the data is generated by independent analysts for purposes 
other than sports wagering. Expert analyst and odds-maker Danny 
Sheridan stated, ``70-75% of newspaper readers aren't reading 
the lines to place bets.'' Moreover, in an April 25, 2001 
letter from the Newspaper Agency Association (NAA), the NAA 
indicated that the betting lines would continue to be published 
by newspapers. The letter stated:

          Like all editorial decisions, the decision on whether 
        to publish point spreads for college sporting events is 
        made by each newspaper and is likely to vary from 
        newspaper to newspaper. If Congress prohibits gambling 
        on college sports, the NAA believes newspapers will 
        continue to have an interest in publishing point 
        spreads on college games, since point spreads appear to 
        be useful to newspaper readers who have no intention of 
        betting on games.

  We also disagree to the specious contention that Nevada's 
exemption in the Professional and Amateur Sports Protection Act 
(PASPA) (28 U.S.C. 3701 et sec) is a ``loophole,'' a 
``loophole'' that S. 718 would repeal. Previous congressional 
action and court decisions are clear on this issue. The record 
clearly reflects that Nevada was expressly included in PASPA 
out of respect for the Constitution and the States that had 
authorized sports wagering prior to enactment of the 1992 
federal ban. Congress was careful when passing PASPA to guard 
against Fifth and Tenth Amendment issues by exempting Nevada, 
Oregon, Montana and New Jersey from the prohibition on sports 
wagering activity. S. 718, however, would contravene Congress' 
intent under PASPA, and would, thus, raise serious Fifth and 
Tenth Amendment issues.
  The Fifth Amendment's Takings Clause prohibits the government 
from taking ``private property for the public use without just 
compensation.'' The U.S. Supreme Court in Ruckelshaus v. 
Monsanto Co. 467 U.S. 986, 103 (1984) held that the Takings 
Clause protects both tangible and intangible property rights, 
such as gambling infrastructure and gambling licenses, 
respectively. Indeed, Congress has previously recognized that 
federal gambling legislation can have the effect of injuring 
private property interests (Senate Report 102-248, 1991). S. 
718's prohibition on state regulated college sports wagering 
without compensation violates the Takings Clause.
  Moreover, the courts have recognized the federalism interests 
in leaving gambling enforcement to the states. In the case of 
United States v. King, 834 F .2d 109, 111 (6th Cir. 1987) the 
Sixth Circuit court held that as with other state police 
powers, gambling regulation has been historically left to the 
states. In United States v. Lopez, 514 U.S. 549 (1995), Supreme 
Court Justices Kennedy and O'Connor recognized the importance 
of maintaining separation of powers between state and federal 
government by stating, ``Were the Federal Government to take 
over the regulation of entire areas of traditional state 
concern * * * the boundaries between the spheres of federal and 
state authority would blur and political responsibility would 
become illusory.'' 514 U.S. at 577.
  If S. 718 is enacted into law, we expect constitutional 
challenges to follow. For that reason, during consideration of 
S. 718, the Committee unanimously adopted an amendment that 
would provide adversely affected parties with expedited 
judicial review before the United States District Court for the 
District of Columbia and the United States Supreme Court. We 
believe that the courts should closely examine the Fifth and 
Tenth Amendment issues raised by this legislation with the 
utmost speed and that the state of Nevada and other aggrieved 
parties should have their day in court. Congress established 
such a precedent for expedited judicial review during Senate 
consideration of Campaign Finance Reform and the enactment of 
appropriations bills governing the use of funds to conduct the 
2000 Census.
  Although those in the majority claim S. 718 is a ``first 
step'' to bolster the integrity of intercollegiate athletics, a 
nationally recognized sports analyst testified that organized 
crime will derive a financial windfall from the bill's 
enactment and that, having removed regulated and policed sports 
wagering in Nevada, those who would corrupt student athletes 
will attempt do so with impunity.
  Accordingly, and in conclusion, we recommend another 
approach, one that recognizes that illegal sports' gambling is 
at the root of addictive gambling among the young. Illegal 
campus bookies and those who seek the anonymity and protection 
of offshore facilities to accept illegal Internet sports wagers 
are responsible for thisgrowing problem among today's student 
population. Witnesses testified that illegal bookies are ubiquitous on 
our college campuses. Therefore, we propose a solution to the real 
issue--illegal gambling. We need stricter enforcement of existing laws 
coupled with a dedicated Department of Justice task force on illegal 
gambling, as well as increased criminal penalties for those who engage 
in this activity. We should not eliminate a system perfected in Nevada, 
and protected as a matter of Constitutional principle, in our efforts 
to extricate illegal gambling on college campuses and among students 
and student-athletes. Rather, we should subject illegal gambling to the 
scrutiny of law enforcement and focus our efforts to reduce it.
                                   John Ensign.
                                   John B. Breaux.
                                   Barbara Boxer.

                        Changes in Existing Law

  In compliance with paragraph 12 of rule XXVI of the Standing 
Rules of the Senate, changes in existing law made by the bill, 
as reported, are shown as follows (existing law proposed to be 
omitted is enclosed in black brackets, new material is printed 
in italic, existing law in which no change is proposed is shown 
in roman):

               TED STEVENS OLYMPIC AND AMATEUR SPORTS ACT

                 [36 United States Code 220501 et seq.]

                     SUBCHAPTER III--MISCELLANEOUS

Sec. 220541. Unlawful sports gambling: Olympics; high school and 
                    college athletes

  (a) Prohibition.--It shall be unlawful for--
          (1) a governmental entity to sponsor, operate, 
        advertise, promote, license, or authorize by law or 
        compact, or
          (2) a person, including an amateur sports 
        organization (as defined in section 3701 of title 28), 
        or a corporate sponsor of such an organization, to 
        sponsor, operate, advertise, or promote,
a lottery, contest, sweepstakes, or other betting, gambling, or 
wagering scheme based, directly or indirectly, on a competitive 
game or performance described in subsection (b), including a 
sweepstakes or contest that includes prizes related directly or 
indirectly to such a covered game or performance.
  (b) Covered Games and Performances.--A competitive game or 
performance described in this subsection is the following:
          (1) One or more competitive games at the Summer or 
        Winter Olympics.
          (2) One or more competitive games in which high 
        school or college athletes participate.
          (3) One or more performances of high school or 
        college athletes in a competitive game.
  (c) Applicability.--
          (1) In general.--The prohibition in subsection (a) 
        applies to activity described in that subsection 
        without regard to whether the activity would otherwise 
        be permitted under subsection (a) or (b) of 3704 of 
        title 28.
          (2) Exception.--The prohibition in subsection (a) 
        shall not apply to activity otherwise described in that 
        subsection if all of the monies paid by the 
        participants, as an entry fee or otherwise, are paid 
        out to winning participants.
  (d) Injunctions.--A civil action to enjoin a violation of 
subsection (a) may be commenced in an appropriate district 
court of the United States by the Attorney General of the 
United States, a local educational agency, college, or sports 
organization, including an amateur sports organization or the 
corporation, whose competitive game is alleged to be the basis 
of such violation.
  (e) Gambling Enforcement Information and Policies.--
          (1) Gambling information.--Each college submitting an 
        annual report on information on criminal offenses under 
        paragraph (1)(F) of section 485(f) of the Higher 
        Education Act of 1965 (20 U.S.C. 1092(f)) shall include 
        in each such report statistics and other information on 
        the occurrence of illegal gambling, including gambling 
        over the Internet, at such college.
          (2) Policy on gambling activity.--Each college 
        submitting an annual statement of policy on alcoholic 
        beverages and underage drinking under paragraph (1)(H) 
        of section 485(f) of the Higher Education Act of 1965 
        shall include in each such report a statement of policy 
        regarding underage and other illegal gambling activity 
        at such college, including a description of any 
        gambling abuse education programs available to students 
        and employees of such college.
          (3) Periodic review.--Notwithstanding paragraph (2) 
        of section 485(f) of the Higher Education Act of 1965, 
        the Attorney General shall, in consultation with the 
        Secretary of Education, periodically review the 
        policies, procedures, and practices of colleges with 
        respect to campus crimes and security related directly 
        or indirectly to illegal gambling, including with 
        respect to the integrity of the athletics contests in 
        which students of colleges participate.
  (f) Definitions.--In this section:
          (1) High school.--The term ``high school'' has the 
        meaning given the term `secondary school' in section 
        14101 of the Elementary and Secondary Education Act of 
        1965 (U.S.C. 8801).
          (2) College.--The term ``college'' has the meaning 
        given the term `institution of higher education' in 
        section 101 of the Higher Education Act of 1965 (20 
        U.S.C. 8801).
          (3) Local educational agency.--The term ``local 
        educational agency'' has the meaning given that term in 
        section 14101 of the Elementary and Secondary Education 
        Act of 1965 (20 U.S.C. 8801).

                     Federal Deposit Insurance Act


                            [12 U.S.C. 1818]

SEC. 8. TERMINATION OF STATUS AS INSURED DEPOSITORY INSTITUTION

                             * * * * * * *

  (x) Depository Institution Involvement in Internet 
Gambling.--Notwithstanding section 303(e) of the Unlawful 
Internet Gambling Funding Prohibition Act, if any appropriate 
Federal banking agency determines that any insured depository 
institution is engaged in any of the following activities, the 
agency may issue an order to such institution prohibiting such 
institution from continuing to engage in any of the following 
activities:
          (1) Extending credit, or facilitating an extension of 
        credit, electronic fund transfer, or money transmitting 
        service with the actual knowledge that any person is 
        violating section 303(a) of the Unlawful Internet 
        Gambling Funding Prohibition Act in connection with 
        such extension of credit, electronic fund transfer, or 
        money transmitting service.
          (2) Paying, transferring, or collecting on any check, 
        draft, or other instrument drawn on any depository 
        institution with the actual knowledge that any person 
        is violating section 303(a) of the Unlawful Internet 
        Gambling Funding Prohibition Act in connection with 
        such check, draft, or other instrument.

                      Child Online Protection Act

                           [47 U.S.C. 231 nt]

                             * * * * * * *

          SUBTITLE B--MONITORING OF USE OF INTERNET FACILITIES

SEC. 1411. HIGHER EDUCATION INSTITUTIONS TO MONITOR INTERNET USE.

  Each institution of higher education (as defined in section 
101 of the Higher Education Act of 1965 (20 U.S.C. 1001) shall 
monitor the use of the wire communications facilities of that 
institution for purposes of detecting the use of those 
facilities for transmissions described in section 1084(a) of 
title 18, United States Code.

SEC. 1412. ENFORCEMENT.

  Any institution of higher education that fails to monitor the 
use of its wire communications facilities as required by 
section 1411 during any academic year is, notwithstanding any 
provision of law to the contrary, ineligible for Federal 
education funding for the succeeding academic year.

                                
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