ONLINE GAMBLING INFORMATION
US HOUSE OF REPRESENTATIVES BILL HR1223
Provided to START CASINO . COM courtesy of the US House of Representatives
HR 1223 IH
H. R. 1223
To create a commission on Internet gambling licensing and
IN THE HOUSE OF REPRESENTATIVES
March 12, 2003
Mr. CONYERS (for himself, Mr. CANNON, Ms. BERKLEY, and Mr. BACA) introduced
the following bill; which was referred to the Committee on the Judiciary, and in
addition to the Committees on Energy and Commerce, and Financial Services, for a
period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
To create a commission on Internet gambling licensing and
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act shall be known as the `Internet Gambling Licensing and Regulation
SEC. 2. FINDINGS AND POLICY.
The Congress finds the following:
(1) Gambling is regulated primarily by State and tribal governments,
whose statutes and regulations govern the placement and acceptance of wagers
within state boundaries.
(2) Online gaming is an activity occurring in interstate commerce with
millions of Americans participating.
(3) The advent of advanced telecommunications technologies, and the
Internet in particular, has rendered state regulation less effective and
confusing with respect to online wagering.
(4) Federal statutes governing interstate placement of wagers are
contradictory and confusing, and they do not adequately address the issues
involved with gambling over the Internet, including gambling by minors,
problem gamblers, and the susceptibility of Internet gambling to money
(5) Commercial casino operations, Native American tribal gaming
operations, State lotteries, horse and dog racing tracks, jai alai, and card
rooms have made legal land-based gambling available to the vast majority of
(6) The use of various types of credit, credit cards, electronic fund
transfers, and bank instruments is the principal manner in which individuals
fund their engagement in Internet gambling.
(7) Online gaming should be subject to the consumer protection laws of
the United States.
(8) Various forms of gambling, including inter alia, casino-style,
sports wagering, parimutuel wagering (including horse racing, dog racing,
and jai alai), State lotteries, noncasino slot machines and others, are
subject to disparate Federal, State, and tribal laws and regulations.
(9) Because of the nature of the Internet, legislative attempts to
prohibit Internet gambling are unlikely to be effective, and may adversely
impact American's rights to due process and individual privacy.
(10) It is the policy of the Congress in this Act to establish a
commission to study and resolve issues posed by the regulation of interstate
commerce with respect to Internet gambling.
SEC. 3. INTERNET GAMBLING LICENSING AND REGULATION STUDY COMMISSION.
(a) ESTABLISHMENT OF COMMISSION- There is established a commission to be
known as the Internet Gambling Licensing and Regulation Study Commission
(hereinafter referred to in this Act as the `Commission'). The Commission
(1) be composed of 5 members appointed in accordance with subsection
(2) conduct its business in accordance with the provisions of this
(1) IN GENERAL- The Commissioners shall be appointed for the life of the
Commission as follows:
(A) 1 shall be appointed by the Speaker of the House of
(B) 1 shall be appointed by the Minority Leader of the House of
(C) 1 shall be appointed by the Majority Leader of the
(D) 1 shall be appointed by the Minority Leader of the
(E) The 4 commissioners appointed in subparagraphs (A), (B), (C), and
(D) shall select by consensus the fifth Commissioner, who shall be the
Chairman of the Commission.
(2) PERSONS ELIGIBLE- The members of the Commission shall be individuals
who have knowledge or expertise, whether by experience or training, in
matters to be studied by the Commission under section 4. The members may be
from the public or private sector, and may include Federal, State, local, or
Native American tribal officers or employees, members of academia, nonprofit
organizations, industry, or other interested individuals.
(3) CONSULTATION REQUIRED- The Speaker of the House of Representatives,
the Minority Leader of the House of Representatives, the Majority Leader of
the Senate, and the Minority Leader of the Senate shall consult among
themselves prior to the appointment of the members of the Commission in
order to achieve, to the maximum extent possible, fair and equitable
representation of various points of view with respect to the matters to be
studied by the Commission under section 4.
(4) COMPLETION OF APPOINTMENTS; VACANCIES- The Speaker of the House of
Representatives, the Minority Leader of the House of Representatives, the
Majority Leader of the Senate, and the Minority Leader of the Senate shall
conduct the consultation required under paragraph (3) and shall each make
their respective appointments not later than 60 days after the date of
enactment of this Act. Any vacancy that occurs during the life of the
Commission shall not affect the powers of the Commission, and shall be
filled in the same manner as the original appointment not later than 60 days
after the vacancy occurs.
(5) OPERATION OF THE COMMISSION-
(A) MEETINGS- The Commission shall meet at the call of the Chairman.
The initial meeting of the Commission shall be conducted not later than 30
days after the appointment of the last member of the Commission, or not
later than 30 days after the date on which appropriated funds are
available for the Commission, whichever is later.
(B) QUORUM; VOTING; RULES- A majority of the members of the Commission
shall constitute a quorum to conduct business, but the Commission may
establish a lesser quorum for conducting hearings scheduled by the
Commission. Each member of the Commission shall have 1 vote, and the vote
of each member shall be accorded the same weight. The Commission may
establish by majority vote any other rules for the conduct of the
Commission's business, if such rules are not inconsistent with this Act or
other applicable law.
SEC. 4. DUTIES OF THE COMMISSION.
(1) IN GENERAL- It shall be the duty of the Commission to conduct a
comprehensive study of the existing legal framework governing Internet
gambling and the issues involved with the licensing and regulation of
(2) MATTERS TO BE STUDIED- The matters studied by the Commission under
paragraph (1) shall include, but not be limited to--
(A) a review of existing international, Federal, State, tribal, and
local laws governing various forms of wagering over the Internet, the
effectiveness of those laws, and their conformity with each
(B) an assessment of the impact of Internet gambling with respect to
(C) an assessment of the impact of Internet gambling on the
availability of gambling to minors;
(D) an assessment of the susceptibility of Internet gambling to money
laundering by terrorists or criminal enterprises;
(E) the potential of regulatory measures to minimize any adverse
impacts of Internet gambling, including the problems identified in
subparagraphs (B), (C), and (D);
(F) an evaluation of the personal use of credit, credit cards,
electronic fund transfers, and bank instruments to fund the engagement in
Internet gambling, including an assessment of the potential of these means
to minimize any adverse impacts of Internet gambling, including the
problems identified in subparagraphs (B), (C), and (D);
(G) issues of federalism posed by the regulation of Internet gambling,
and the reconciliation of a state-based legal framework with an inherently
interstate and international medium such as the Internet;
(H) the problems of unregulated international Internet wagering, and
options for the Federal Government to seek international cooperation in
the licensing and regulation of such gambling; and
(I) an assessment of the activities in the European Union member
states to regulate and license Internet gambling.
(b) REPORT- Not later than 1 year after the date on which the Commission
first meets, the Commission shall submit to the President, the Congress, State
Governors, and Native American tribal governments a comprehensive report on
the Commission's findings and conclusions.
(c) RECOMMENDATIONS- Not later than 6 months after the submission of the
report under subsection (b) the Commission shall issue proposed changes to
Federal laws and regulations to provide for the licensing and regulation of
Internet gambling in the United States. These proposals shall--
(1) preserve the prerogatives of States with respect to intrastate
gambling and wagering within their borders, and the further prerogative of
States to regulate the placement and acceptance of online wagers by their
citizens, including to adopt measures to prevent wagering by individuals in
States where all gambling is illegal;
(2) include measures to minimize adverse impacts of Internet gambling,
(A) measures to prevent minors from gambling online;
(B) measures to prevent the use of Internet gambling as a money
laundering channel for terrorists and criminal enterprises; and
(C) measures to identify, and where possible, provide assistance to
problem gamblers online;
(3) preserve tribal sovereignty with respect to gaming and Internet
gaming in a manner consistent with the decision of the Supreme Court of the
United States in California v. Cabazon Band of Mission Indians, 480 U.S.
202, 107 S. Ct. 1083 (1987);
(4) clarify and harmonize the Federal laws governing gambling as they
apply to Internet gambling, and eliminate the disparate treatment of various
forms of Internet gambling, except in cases where the disparity serves a
compelling State interest;
(5) provide for the appropriate taxation of Internet gambling
(6) provide for the licensing of enterprises both within the United
States and outside of its borders;
(7) consider and, where possible, remain consistent with the goals,
principles, and obligations of the United States in other international
negotiations governing electronic commerce; and
(8) include measures to discourage, prohibit, or prevent United States
citizens from wagering with unlicensed Internet gambling operations outside
of the United States.
SEC. 5. POWERS OF THE COMMISSION.
(1) IN GENERAL- The Commission may hold such hearings, sit and act at
such times and places, administer such oaths, take such testimony, and
receive such evidence as the Commission considers advisable to carry out its
duties under section 4.
(2) WITNESS EXPENSES- Witnesses requested to appear before the
Commission shall be paid the same fees as are paid to witnesses under
section 1821 of title 28, United States Code. The per diem and mileage
allowances for witnesses shall be paid from funds appropriated to the
(1) IN GENERAL- If a person fails to supply information requested by the
Commission, the Commission may by majority vote require by subpoena the
production of any written or recorded information, document, report, answer,
record, account, paper, computer file, or other data or documentary evidence
necessary to carry out its duties under section 4. The Commission shall
transmit to the Attorney General a confidential, written notice at least 10
days in advance of the issuance of any such subpoena. A subpoena under this
paragraph may require the production of materials from any place within the
(2) INTERROGATORIES- The Commission may, with respect only to
information necessary to understand any materials obtained through a
subpoena under paragraph (1), issue a subpoena requiring the person
producing such materials to answer, either through a sworn deposition or
through written answers provided under oath (at the election of the person
upon whom the subpoena is served), to interrogatories from the Commission
regarding such information. A complete recording or transcription shall be
made of any deposition made under this paragraph.
(3) CERTIFICATION- Each person who submits materials or information to
the Commission pursuant to a subpoena issued under paragraph (1) or (2)
shall certify to the Commission the authenticity and completeness of all
materials or information submitted. The provisions of section 1001 of title
18, United States Code, shall apply to any false statements made with
respect to the certification required under this paragraph.
(4) TREATMENT OF SUBPOENAS- Any subpoena issued by the Commission under
paragraph (1) or (2) shall comply with the requirements for subpoenas issued
by a United States district court under the Federal Rules of Civil
(5) FAILURE TO OBEY A SUBPOENA- If a person refuses to obey a subpoena
issued by the Commission under paragraph (1) or (2), the Commission may
apply to a United States district court for an order requiring that person
to comply with such subpoena. The application may be made within the
judicial district in which that person is found, resides, or transacts
business. Any failure to obey the order of the court may be punished by the
court as civil contempt.
(c) INFORMATION FROM FEDERAL AGENCIES- The Commission may secure directly
from any Federal department or agency such information as the Commission
considers necessary to carry out its duties under section 4. Upon the request
of the Commission, the head of such department or agency may furnish such
information to the Commission.
(d) INFORMATION TO BE KEPT CONFIDENTIAL- The Commission shall be
considered an agency of the Federal Government for purposes of section 1905 of
title 18, United States Code, and any individual employed by an individual,
entity, or organization under contract to the Commission under section 7 shall
be considered an employee of the Commission for the purposes of section 1905
of title 18, United States Code. Information obtained by the Commission, other
than information available to the public, shall not be disclosed to any person
in any manner, except--
(1) to Commission employees or employees of any individual, entity, or
organization under contract to the Commission under section 7 for the
purpose of receiving, reviewing, or processing such information;
(3) when publicly released by the Commission in an aggregate or summary
form that does not directly or indirectly disclose--
(A) the identity of any person or business entity; or
(B) any information which could not be released under section 1905 of
title 18, United States Code.
SEC. 6. COMMISSION PERSONNEL MATTERS.
(a) COMPENSATION OF MEMBERS- Each member of the Commission who is not an
officer or employee of the Federal Government, or whose compensation is not
precluded by a State, local, or Native American tribal government position,
shall be compensated at a rate equal to the daily equivalent of the annual
rate of basic pay prescribed for level IV of the Executive Schedule under
section 5315 of title 5, United States Code, for each day (including travel
time) during which such member is engaged in the performance of the duties of
the Commission. All members of the Commission who are officers or employees of
the United States shall serve without compensation in addition to that
received for their services as officers or employees of the United States.
(b) TRAVEL EXPENSES- The members of the Commission shall be allowed travel
expenses, including per diem in lieu of subsistence, at rates authorized for
employees of agencies under subchapter I of chapter 57 of title 5, United
States Code, while away from their homes or regular places of business in the
performance of service for the Commission.
(1) IN GENERAL- The Chairman of the Commission may, without regard to
the civil service laws and regulations, appoint and terminate an executive
director and such other additional personnel as may be necessary to enable
the Commission to perform its duties. The employment and termination of an
executive director shall be subject to confirmation by a majority of the
members of the Commission.
(2) COMPENSATION- The executive director shall be compensated at a rate
not to exceed the rate payable for level V of the Executive Schedule under
section 5316 of title 5, United States Code. The Chairman may fix the
compensation of other personnel without regard to the provisions of chapter
51 and subchapter III of chapter 53 of title 5, United States Code, relating
to classification of positions and General Schedule pay rates, except that
the rate of pay for such personnel may not exceed the rate payable for level
V of the Executive Schedule under section 5316 of such title.
(3) DETAIL OF GOVERNMENT EMPLOYEES- Any Federal Government employee,
with the approval of the head of the appropriate Federal agency, may be
detailed to the Commission without reimbursement, and such detail shall be
without interruption or loss of civil service status, benefits, or
(d) PROCUREMENT OF TEMPORARY AND INTERMITTENT SERVICES- The Chairman of
the Commission may procure temporary and intermittent services under section
3109(b) of title 5, United States Code, at rates for individuals not to exceed
the daily equivalent of the annual rate of basic pay prescribed for level V of
the Executive Schedule under section 5316 of such title.
SEC. 7. CONTRACTS FOR RESEARCH.
(a) ADVISORY COMMISSION ON INTERGOVERNMENTAL RELATIONS-
(1) IN GENERAL- In carrying out its duties under section 4, the
Commission shall contract with the Advisory Commission on Intergovernmental
(A) a thorough review and cataloging of all applicable Federal, State,
local, and Native American tribal laws, regulations, and ordinances that
pertain to gambling in the United States; and
(B) assistance in conducting the studies required by the Commission
under section 4(a), and in particular the review and assessments required
in subparagraphs (A), (E), and (G) of paragraph (2) of such
(2) REPORT REQUIRED- The contract entered into under paragraph (1) shall
require that the Advisory Commission on Intergovernmental Relations submit a
report to the Commission detailing the results of its efforts under the
contract not later than 15 months after the date upon which the Commission
(b) NATIONAL RESEARCH COUNCIL-
(1) IN GENERAL- In carrying out its duties under section 4, the
Commission shall contract with the National Research Council of the National
Academy of Sciences for assistance in conducting the studies required by the
Commission under section 4(a).
(2) REPORT REQUIRED- The contract entered into under paragraph (1) shall
require that the National Research Council submit a report to the Commission
detailing the results of its efforts under the contract not later than 15
months after the date upon which the Commission first meets.
(c) OTHER ORGANIZATIONS- Nothing in this section shall be construed to
limit the ability of the Commission to enter into contracts with other
entities or organizations for research necessary to carry out the Commission's
duties under section 4.
SEC. 8. DEFINITIONS.
For the purposes of this Act:
(1) BANK INSTRUMENT- The term `bank instrument' means any instrument
drawn on or payable through a financial institution (including any check,
draft, or similar instrument).
(2) CREDIT AND CREDIT CARD- The terms `credit' and `credit card' have
the meanings given such terms in section 103 of the Truth in Lending Act (15
(3) ELECTRONIC FUND TRANSFER- The term `electronic fund
(A) has the meaning given such term in section 903 of the Electronic
Fund Transfer Act (15 U.S.C. 1693a); and
(B) includes any fund transfer covered by Article 4A of the Uniform
Commercial Code, as in effect in any State.
(4) FINANCIAL INSTITUTION- The term `financial institution' has the
meaning given such term in section 903 of the Electronic Fund Transfer Act
(15 U.S.C. 1693a).
(A) Except as provided in subparagraph (B), the term `gambling' means
any legalized form of wagering or betting conducted in a casino, on a
riverboat, on an Indian reservation, or at any other location under the
jurisdiction of the United States. Such term includes any casino game,
parimutuel betting, sports-related betting, lottery, pull-tab game, slot
machine, any type of video gaming, computerized wagering or betting
activities (including any such activity conducted over the Internet), and
philanthropic or charitable gaming activities.
(B) The term `gambling' does not include--
(i) any activity governed by the securities laws (as that term is
defined in section 3(a)(47) of the Securities Exchange Act of 1934) for
the purchase or sale of securities (as that term is defined in section
3(a)(10) of such Act);
(ii) any transaction conducted on or subject to the rules of a
registered entity or exempt board of trade pursuant to the Commodity
(iii) any over-the-counter derivative instrument;
(iv) any contract of indemnity or guarantee;
(v) any contract for insurance;
(vi) any deposit or other transaction with a depository institution
(as defined in section 3(c) of the Federal Deposit Insurance Act);
(vii) any participation in a simulation sports game or an
educational game or contest that--
(I) is not dependent solely on the outcome of any single sporting
event or nonparticipant's singular individual performance in any
single sporting event;
(II) has an outcome that reflects the relative knowledge and skill
of the participants with such outcome determined predominantly by
accumulated statistical results of sporting events; and
(III) offers a prize or award to a participant that is established
in advance of the game or contest and is not determined by the number
of participants or the amount of any fees paid by those
(6) NATIVE AMERICAN TRIBAL GOVERNMENT- The term `Native American tribal
government' means an Indian tribe, as defined under section 4(5) of the
Indian Gaming Regulatory Act of 1988 (25 U.S.C. 2703(5)).
(7) STATE- The term `State' means each of the several States of the
United States, the District of Columbia, the Commonwealth of Puerto Rico,
the Virgin Islands, Guam, American Samoa, and the Commonwealth of the
Northern Mariana Islands.
SEC. 9. AUTHORIZATION OF APPROPRIATIONS.
(a) IN GENERAL- There are authorized to be appropriated to the Commission,
the Advisory Commission on Intergovernmental Relations, and the National
Academy of Sciences such sums as may be necessary to carry out the purposes of
this Act. Any sums appropriated shall remain available, without fiscal year
limitation, until expended.
(b) LIMITATION- No payment may be made under section 6 or 7 of this Act
except to the extent provided for in advance in an appropriation Act.
SEC. 10. TERMINATION OF THE COMMISSION.
The Commission shall terminate 60 days after the Commission submits the
report required under section 4(b).
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