[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2366 Introduced in House (IH)]
112th CONGRESS
1st Session
H. R. 2366
To establish a program for State licensing of Internet poker, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 24, 2011
Mr. Barton of Texas (for himself, Mr. Campbell, Ms. Berkley, Mr. Honda,
Mr. Cohen, Ms. Linda T. Sanchez of California, Mr. Perlmutter, Mr. King
of New York, Mr. Conyers, Mr. Frank of Massachusetts, Mr. Paul, and Mr.
Grimm) introduced the following bill; which was referred to the
Committee on Energy and Commerce, and in addition to the Committees on
Financial Services and the Judiciary, for a period to be subsequently
determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To establish a program for State licensing of Internet poker, 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; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Internet Gambling
Prohibition, Poker Consumer Protection, and Strengthening UIGEA Act of
2011''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
TITLE I--PROHIBITION ON UNLICENSED INTERNET GAMBLING AND INTERNET POKER
CONSUMER PROTECTION
Sec. 101. Definitions.
Sec. 102. Prohibition on unlicensed Internet gambling.
Sec. 103. Department of Commerce qualification and oversight of State
agencies.
Sec. 104. Licensing by qualified State agencies.
Sec. 105. Enforcement.
Sec. 106. Compulsive gaming, responsible gaming, and self-exclusion
program requirements.
Sec. 107. Prohibitions and restrictions.
Sec. 108. Safe harbor.
Sec. 109. Relation to subchapter IV of chapter 53 of title 31, United
States Code.
Sec. 110. Cheating and other fraud.
Sec. 111. Inapplicability of certain provisions to interstate off-track
wagers.
Sec. 112. Construction and relation to other law.
Sec. 113. Regulations.
Sec. 114. Annual reports.
Sec. 115. Effective date.
TITLE II--STRENGTHENING OF UNLAWFUL INTERNET GAMBLING ENFORCEMENT ACT
OF 2006
Sec. 201. Financial transaction providers.
Sec. 202. List of unlicensed Internet gambling enterprises.
Sec. 203. Regulations.
Sec. 204. Conforming amendments.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Since the development of the Internet, online Web sites
offering Internet gambling have raised numerous policy,
consumer protection, and enforcement concerns for Federal and
State governments as such Web sites are run by operators
located in many different countries and have sought to attract
customers from the United States.
(2) The Unlawful Internet Gambling Enforcement Act of 2006
(title VIII of Public Law 109-347; 120 Stat. 1952) was intended
to aid enforcement efforts against unlawful Internet operators
and to limit unlawful Internet gaming involving United States
persons. However, that Act has only been partially successful
in doing so.
(3) There is uncertainty about the laws of the United
States governing Internet gambling and Internet poker, though
not about laws governing Internet sports betting. The
Department of Justice has maintained that a broad range of
activity is illegal, including activity that Congress intended
to legalize under the Interstate Horseracing Act of 1978.
Certain court decisions have used logic not consistent with
aspects of the position of the Department of Justice.
Enforcement efforts would be aided by bringing greater clarity
to this area.
(4) Additional tools to assist law enforcement in the
prevention of unlawful Internet gaming activities would be
important and beneficial. Maintenance of a list of unlicensed
Internet gambling enterprises and the owners, operators, and
key personnel of such enterprises (as well as entities and
related personnel found unsuitable) would aid those law
enforcement efforts and would make the Unlawful Internet
Gambling Enforcement Act more effective.
(5) Poker is distinct from the class of games of chance
traditionally defined as gambling in that, players compete
against each other, and not the person or entity hosting the
game (sometimes called ``the house''), and that over any
significant interval, the outcome of a poker game is
predominantly determined by the skill of the participants.
(6) United States consumers would benefit from a program of
Internet poker regulation which recognizes the interstate
nature of the Internet, but nevertheless preserves the
prerogatives of States. Such a system would require strict
licensing of Internet poker providers and would require
licensee operators to--
(A) have effective means to prevent minors from
playing poker on-line;
(B) identify and help treat problem gamblers; to
ensure that games are fair;
(C) allow players to self-exclude and limit losses;
and
(D) prevent money laundering.
(7) Such a program would create a new industry within the
United States creating thousands of jobs and substantial tax
revenue for Federal and State governments.
TITLE I--PROHIBITION ON UNLICENSED INTERNET GAMBLING AND INTERNET POKER
CONSUMER PROTECTION
SEC. 101. DEFINITIONS.
As used in this title, the following definitions apply:
(1) Applicant.--The term ``applicant'' means any person who
has applied for a license pursuant to this title.
(2) Bet or wager.--
(A) In general.--Except as provided in subparagraph
(B), the term ``bet or wager'' has the meaning given
the term in section 5362 of title 31, United States
Code.
(B) Exception.--The term ``bet or wager'' does not
include the following:
(i) Interstate horseracing.--A bet or wager
that is permissible under the Interstate
Horseracing Act of 1978 (15 U.S.C. 3001 et
seq.).
(ii) Certain intrastate transactions.--
Placing, receiving, or otherwise transmitting a
bet or wager--
(I) as described in subparagraph
(B) of section 5362(10) of title 31,
United States Code, and clarified by
subparagraph (E) of such section; and
(II) authorized under a license
that was issued by a regulatory body of
a State or Indian tribe on or before
the date of the enactment of this Act.
(iii) Intrastate lottery transactions.--A
bet or wager that is--
(I) a chance or opportunity to win
a lottery or other prize (which
opportunity to win is predominantly
subject to chance) authorized by a
State or Indian tribe; and
(II) a placing, receiving, or
transmitting of a bet or wager as
described in such subparagraph (B) and
clarified by subparagraph (E) of such
section 5362(10).
(iv) Intratribal transactions.--Placing,
receiving, or otherwise transmitting a bet or
wager as described in subparagraph (C) of such
section 5362(10), as clarified by such
subparagraph (E).
(3) Casino gaming.--
(A) In general.--Except as provided in subparagraph
(B), the term ``casino gaming'' means the full range of
casino gaming activity licensed by regulatory bodies of
States or Indian tribes that would be qualified as
class III gaming under section 4 of the Indian Gaming
Regulatory Act (25 U.S.C. 2703), if that Act were
applicable to the gaming.
(B) Exception.--The term ``casino gaming'' does not
include lotteries of States or Indian tribes.
(4) Casino gaming facilities.--The term ``casino gaming
facility'' means a facility that provides casino gaming on a
riverboat, at a race track, or in another facility that hosts
500 or more gaming devices in 1 physical location pursuant to a
duly authorized license issued by a gaming regulatory authority
of a State or Indian tribe.
(5) Gaming device.--
(A) In general.--Except as provided in subparagraph
(B), the term ``gaming device'' means any computer-
based gambling machine, including slot machines and
video lottery terminals that have been approved by a
gaming regulatory authority of a State or Indian tribe.
(B) Exception.--The term ``gaming device'' does not
include machines that process bets or wagers for pari-
mutuel betting pools.
(6) Indian lands and indian tribe.--The terms ``Indian
lands'' and ``Indian tribe'' have the meaning given the terms
in section 4 of the Indian Gaming Regulatory Act (25 U.S.C.
2703).
(7) Internet.--The term ``Internet'' has the meaning given
the term in section 5362 of title 31, United States Code.
(8) Internet gambling facility.--The term ``Internet
gambling facility'' means an Internet Web site, or similar
communications facility in which transmissions may cross State
boundaries, through which a bet or wager is initiated,
received, or otherwise made, whether transmitted by telephone,
Internet, satellite, or other wire or wireless communication
facility, service, or medium.
(9) Internet poker.--The term ``Internet poker'' means a
poker game, hand, tournament, or other contest of poker offered
through the use of an Internet poker facility.
(10) Internet poker facility.--The term ``Internet poker
facility'' means a type of Internet gambling facility that
provides bets or wagers only with respect to a game, hand,
tournament, or other contest of poker.
(11) Licensee.--The term ``licensee'' means a person who
operates an Internet poker facility under a license issued by a
qualified State agency pursuant to this title.
(12) Live racing.--The term ``live racing'' means, with
respect to a qualified race track, the conduct of live
thoroughbred horse races at such race track, but does not
include any races simulcasted from a separate race track.
(13) Operate an internet gambling facility.--The term
``operate an Internet gambling facility'' means to conduct,
direct, manage, own, supervise, or control an Internet gambling
facility.
(14) Operate an internet poker facility.--The term
``operate an Internet poker facility'' means to conduct,
direct, manage, own, supervise, or control an Internet poker
facility.
(15) Poker.--The term ``poker'' means any of several card
games in which players compete against each other, and not the
person or entity hosting the game (sometimes called ``the
house''), and that over any significant interval, the outcome
of a poker game is predominantly determined by the skill of the
participants.
(16) Qualified state agency.--The term ``qualified State
agency'' means--
(A) a State agency or regulatory body of an Indian
tribe that has been designated as a qualified body
under paragraph (1) or (3) of section 105(a); or
(B) the Office of Internet Poker Oversight
established under section 106(a) and designated under
paragraph (2) of section 105(a).
(17) Qualified card room.--The term ``qualified card room''
means a facility that has been licensed by a State or Indian
tribe to provide at least 250 tables in 1 physical facility for
bets or wagers on poker.
(18) Qualified mobile gaming system.--The term ``qualified
mobile gaming system'' means a system for the conduct of casino
gaming through communications devices or gaming devices
operated at a casino gaming facility by the use of
communication technology that allows a person to transmit
wirelessly information to a computer to assist in the placing
of a bet or wager and corresponding information related to the
display of the game, game outcomes, or other similar
information and which is licensed for operation at a casino
gaming facility by a State or Indian tribe.
(19) Qualified race track.--The term ``qualified race
track'' means a race track or other pari-mutuel wagering
facility that--
(A) has been licensed by a regulatory authority of
a State or Indian tribe to accept pari-mutuel wagers on
horse races; and
(B) has--
(i) at least 500 gaming devices at 1
physical location; or
(ii) processed at least $200,000,000 or
more in gross wagering on horse racing during
any 3 of the 5 years preceding the date of the
enactment of this Act.
(20) Remote gaming equipment.--
(A) In general.--Except as provided in subparagraph
(B), the term ``remote gaming equipment'' means
electronic or other equipment principally used by or on
behalf of an operator of an Internet poker facility,
including by any significant vendor to such operator,
to--
(i) register a person's participation in
Internet poker and to store information
relating thereto;
(ii) present to persons who are
participating or who may participate in
Internet poker the game that is to be played;
(iii) determine all or part of, or the
effect of, a result relevant to a game, hand,
tournament, or other contest of Internet poker
and to store information relating thereto;
(iv) accept payment with respect to
Internet poker from the player; or
(v) authorize payment of any winnings in
respect of Internet poker.
(B) Exception.--The term ``remote gaming
equipment'' does not include the following:
(i) Equipment used for business continuity,
back-up, excess capacity, or other secondary
use.
(ii) A computer which is used by a person
to participate in Internet poker unless the
computer is provided by or on behalf of the
person who is conducting or providing the
facilities for the game.
(iii) Equipment operated in the ordinary
course of providing banking,
telecommunications, or payment processing
services.
(iv) Such other equipment that provides
ancillary services as the Secretary considers
appropriate.
(21) Secretary.--The term ``Secretary'' means the Secretary
of Commerce.
(22) Significant vendor.--The term ``significant vendor''
means a person who--
(A) on behalf of a licensee, knowingly manages,
administers, or controls bets or wagers that are
initiated, received, or otherwise made within the
United States;
(B) on behalf of a licensee, knowingly manages,
administers, or controls the games with which such bets
or wagers are associated;
(C) on behalf of a licensee, develops, maintains,
or operates the software or other system programs or
hardware on which the games or the bets or wagers are
managed, administered, or controlled;
(D) provides the trademarks, trade names, service
marks, or similar intellectual property under which a
licensee identifies its Internet poker facility to its
customers in the United States;
(E) provides information on individuals in the
United States that made bets or wagers with an Internet
gambling facility not licensed under this title via a
database or customer lists;
(F) provides any products, services, or assets to a
licensee and is paid a percentage of gaming revenue or
Internet poker commission fees by the licensee (not
including fees to financial institutions and payment
providers for facilitating a deposit by a customer); or
(G) with respect to an applicant, proposes to
provide any of the activities, services, or items
identified in subparagraphs (A) through (E).
(23) Sporting event.--
(A) In general.--Except as provided in subparagraph
(B), the term ``sporting event'' means any athletic
competition, whether professional, scholastic, or
amateur or any performance of any athlete in such
competitions.
(B) Exception.--The term ``sporting event'' does
not include any activity described in section
3704(a)(4) of title 28, United States Code.
(24) State.--The term ``State'' means each of the several
States of the United States, the District of Columbia, and any
commonwealth, territory, or possession of the United States.
SEC. 102. PROHIBITION ON UNLICENSED INTERNET GAMBLING.
(a) Prohibition.--
(1) In general.--It shall be unlawful for a person to
operate an Internet gambling facility without a license in good
standing issued to such person by a qualified State or tribal
agency under this title.
(2) Exception.--Paragraph (1) shall not apply to the
operation of an Internet gambling facility by a person located
outside the United States in which bets or wagers are
initiated, received, or otherwise made by individuals located
outside the United States.
(b) Criminal Penalties.--Any person who violates this section shall
be fined under title 18, United States Code, imprisoned for not more
than 5 years, or both.
SEC. 103. DEPARTMENT OF COMMERCE QUALIFICATION AND OVERSIGHT OF STATE
AGENCIES.
(a) Commerce Responsibilities and Powers.--The Secretary shall have
responsibility and authority for the following activities:
(1) Reviewing and qualifying State agencies to issue
licenses under this title.
(2) Exercising oversight over qualified State agencies to
ensure that such agencies--
(A) comply with the requirements of this title; and
(B) carry out their regulatory and enforcement
functions under this title with appropriate diligence.
(3) Investigating and taking appropriate remedial action
with respect to any qualified State agency.
(4) Prescribing such regulations as may be necessary to
administer and enforce the provisions of this title.
(b) Office of Internet Poker Oversight.--
(1) Establishment.--The Secretary shall establish an office
in the Department of Commerce, to be known as the ``Office of
Internet Poker Oversight'' (in this subsection referred to as
the ``office'') to exercise the functions of the Secretary set
out in this title.
(2) Director and delegation of authority.--The Secretary
shall appoint a Director of the office from among individuals
who have demonstrated experience and expertise in regulating
gaming activities and may delegate to the Director any
authority, duty, or responsibility conferred upon the Secretary
by this title.
(c) Designation of Qualified State Agencies.--
(1) Qualification of state agencies.--The Secretary shall
qualify any State agency that is designated to the Secretary by
a State that wishes to participate in the licensing program to
carry out the licensing and other functions under this title if
the Secretary determines that such agency meets the minimum
standards for qualification prescribed under paragraph (2).
(2) Minimum standards for qualified state agencies.--The
Secretary shall prescribe minimum standards for qualifying a
State agency under this subsection, including minimum
standards--
(A) relating to the size and qualification of staff
of the agency to ensure a sufficient number of
enforcement agents with experience in gaming regulatory
enforcement areas to discharge its intended functions
and that the applicant have the sophistication and
resources necessary to evaluate issues unique to the
Internet environment;
(B) relating to the length of time the applicant
has regulated other forms of gaming to ensure
designations of only those applicants that have a
history of demonstrated regulatory enforcement and
oversight commensurate with the responsibilities
imposed under this title;
(C) for assessing the applicant's experience and
willingness to work with Federal authorities, including
the Financial Crimes Enforcement Network;
(D) prohibiting conflicts of interest to ensure
that qualified State agencies are not controlled,
directly or indirectly, by persons that have any
significant ownership interest in entities regulated
under this title;
(E) for the capacity and experience of a qualified
State agency in conducting rigorous suitability
reviews;
(F) for the enforcement and regulatory authorities
provided to the applicant under the law of the
applicable State or Indian tribe, including
investigative authority, authority to impose
requirements on licensees, and authority to impose
civil or other penalties; and
(G) the Secretary considers relevant to the ability
of an agency to serve as an effective qualified State
agency.
(3) Withdrawal of qualification.--
(A) In general.--Beginning on the date that is 1
year after the date on which the Secretary prescribes
final regulations under this title, the Secretary may,
after providing 60 days notice to a qualified State
agency, withdraw the qualification of such agency under
this section if the Secretary determines that the
agency is not in compliance with the minimum standards
set established under paragraph (2) or other
requirements of this title.
(B) Opportunity to comply.--The Secretary may
provide a State agency who receives notice under
subparagraph (A) with an opportunity to come into
compliance for a period of not more than 180 days. The
Secretary may extend such period by not more than 180
additional days if the State agency has made
substantial progress toward compliance as of the
expiration of the first 180-day period.
(C) Effect of notice.--A State agency that receives
notice under subparagraph (A) may not issue any new
licenses under this title until the Secretary
determines that the qualified State agency is in
compliance with the requirements of this title and
regulations prescribed thereunder.
(D) Right to appeal.--A State agency that has had
its qualification withdrawn under this paragraph may
appeal to the United States District Court for the
District of Columbia that such withdrawal was an abuse
of discretion.
(4) Action upon withdrawal of qualification.--
(A) In general.--Except as provided in subparagraph
(B), not later than 30 days after the date on which the
Secretary withdraws the qualification of a State agency
under paragraph (3), each person with a license issued
by the State agency shall--
(i)(I) cease offering, accepting, and
providing services with respect to bets or
wagers from persons located in the United
States under such license; and
(II) return all customer deposits or place
those sums the return of which to United States
customers is not feasible due to change in
customer address, bank details, or similar
difficulty, in escrow in an account with a
financial institution in the United States for
safekeeping and orderly disposition by the
Secretary; or
(ii) apply for a new license from a
different qualified State agency.
(B) Interim operation.--If a person applies for a
new license under clause (ii) of subparagraph (A), the
person may continue the activities described in clause
(i)(I) of such subparagraph until final action is taken
on the license application by the qualified State
agency.
(C) Interim regulatory oversight.--Until final
action is taken under subparagraph (B) with respect to
a person, the Secretary shall have enforcement and
regulatory authority over the licensed activities of
such person.
(d) Oversight of Qualified State Agencies.--The Secretary may
investigate and take such action as the Secretary considers appropriate
with respect to any qualified State agency that appears, based upon the
Secretary's own inquiry or based upon credible information provided by
other persons, including licensees or law enforcement officials, to be
deficient or substantially less rigorous than other qualified State
agencies in the discharge of its responsibilities under this title.
(e) Consultation With Indian Tribes.--In implementing this title,
the Secretary shall conduct meaningful consultation with Indian tribes
regarding all aspects of this title which affect Indian tribes.
SEC. 104. LICENSING BY QUALIFIED STATE AGENCIES.
(a) Internet Poker Facility Licensing Program.--
(1) Authority to operate internet poker facility under
valid license.--Notwithstanding any other provision of law and
subject to the provisions of this title, a licensee may accept
a bet or wager with respect to Internet poker from an
individual located in the United States and may offer related
services so long as the license of the licensee issued under
this title remains in good standing.
(2) Significant vendors.--If a person seeks a certificate
of suitability from a qualified State agency to provide
services to a licensee or applicant as a significant vendor
with respect to an Internet poker facility, such person shall
not be required to obtain a license under this title to provide
such services with respect to that Internet poker facility.
(3) Limitations imposed by states and indian tribes.--
(A) Action by a state.--No licensee may engage,
under any license issued under this title, in the
operation of an Internet poker facility that knowingly
accepts bets or wagers initiated by persons who reside
in any State which provides notice that it will limit
such bets or wagers, if the Governor or other chief
executive officer of such State informs the Secretary
of such limitation, in a manner which clearly
identifies the nature and extent of such limitation.
(B) Changes to state limitations.--The
establishment, repeal, or amendment by a State of any
limitation described in subparagraph (A) shall apply,
for purposes of this title, beginning on the day that
occurs after the end of the 60-day period beginning on
the later of--
(i) the date a notice of such
establishment, repeal, or amendment is provided
by the Governor or other chief executive
officer of such State in writing to the
Secretary; or
(ii) the effective date of such
establishment, repeal, or amendment.
(C) Application of state action to tribal lands of
indian tribes.--Any State limitation described in
subparagraph (A) shall not apply to the acceptance by a
licensee of bets or wagers from persons located within
the tribal lands of an Indian tribe that--
(i) has itself opted out pursuant to
subsection (b) (in which case the tribal opt-
out exercise under such subsection shall
apply); or
(ii) would be entitled pursuant to other
applicable law to permit such bets or wagers to
be initiated and received within its territory
without use of the Internet.
(D) Actions by an indian tribe.--No Internet
gambling licensee knowingly may accept a bet or wager
from a person located in the tribal lands of any Indian
tribe which limits such gambling activities or other
contests if the principal chief or other chief
executive officer of such Indian tribe informs the
Secretary of such limitation, in a manner which clearly
identifies the nature and extent of such limitation.
(E) Changes to state limitations.--The
establishment, repeal, or amendment by any Indian tribe
of any limitation referred to in subparagraph (D) shall
apply, for purposes of this title, beginning on the day
that occurs after the end of the 60-day period
beginning on the later of--
(i) the date a notice of such
establishment, repeal, or amendment is provided
by the principal chief or other chief executive
officer of such Indian tribe in writing to the
Secretary; or
(ii) the effective date of such
establishment, repeal, or amendment.
(F) Notification and enforcement of state and tribe
limitations.--
(i) Notification and measures to ensure
compliance.--The Secretary shall notify all
licensees and applicants of all States and
Indian tribes that have provided notice
pursuant to subparagraph (A)(ii) of (C)(ii), as
the case may be, promptly upon receipt of such
notice and in no event fewer than 30 days
before the effective date of such notice. The
Secretary shall take effective measures to
ensure that any licensee under this subchapter,
as a condition of the license, complies with
any limitation or prohibition imposed by any
State or Indian tribe to which the licensee is
subject.
(ii) Violations.--A violation of
subparagraph (A) of (C) shall be a violation of
this title enforceable under section 105.
(b) Application for License.--
(1) Application.--Except as provided in subparagraph (B), a
person seeking to operate an Internet poker facility under this
title shall submit to the qualified State agency of the State
where servers for such Internet poker facility are located an
application for a license at such time, in such form, and in
such manner as the qualified State agency considers
appropriate, including at a minimum the following:
(A) Complete financial information about the
applicant.
(B) Documentation showing the organization of the
applicant and all related businesses and affiliates.
(C) The criminal and financial history of--
(i) the applicant;
(ii) each of the senior executives and
directors of the applicant;
(iii) any other person who is in control of
the applicant; and
(iv) such other persons as the qualified
State agency considers appropriate.
(D) Such other information as may be necessary for
the suitability analysis required under subsection (c).
(E) Disclosure of all other applications for
licenses previously or simultaneously submitted under
this paragraph to other qualified State agencies and
whether those applications are pending, were granted,
or were denied.
(F) A detailed description of the applicant's plan
for complying with all applicable requirements and
regulations prescribed pursuant to this title.
(G) A certification by the applicant that the
applicant agrees to be subject to--
(i) jurisdiction in United States Federal
courts and in the courts of the State or Indian
tribe of the qualified State agency to which
the applicant has applied; and
(ii) all applicable provisions of United
States law.
(2) Notice to the secretary.--Each qualified State agency
shall report all applicants for licensure and the dispositions
of their applications to the Secretary promptly upon
disposition of each application or in such intervals as the
Secretary may prescribe. Such report shall include such
information or documentation as the Secretary may require.
(c) Standards for License Issuance; Suitability Qualifications and
Disqualification Standards.--
(1) Suitability for licensing.--No applicant shall be
eligible to obtain a license under this title unless a
qualified State agency, with whom the applicant has filed an
application for a license, has determined, upon completion of a
background check and investigation, that the applicant, any
person deemed to be in control of the applicant, all
significant vendors of the applicant, and any other person
determined by the qualified State agency as having significant
influence on the applicant are suitable for licensing or for
receiving a certificate of suitability as applicable.
(2) Investigation.--
(A) Determination of suitability.--Prior to issuing
a license under this section, a qualified State agency
shall conduct the investigation and analysis described
in paragraph (1) to determine whether the applicant or
person--
(i) is a person of good character, honesty,
and integrity;
(ii) is a person whose prior activities,
criminal record, if any, reputation, habits,
and associations do not--
(I) pose a threat to the public
interest or to the effective regulation
and control of Internet poker
facilities; or
(II) create or enhance the dangers
of unsuitable, unfair, or illegal
practices, methods, and activities in
the conduct of Internet poker
facilities or the carrying on of the
business and financial arrangements
incidental to such facilities;
(iii) is capable of and likely to conduct
the activities for which the applicant is
licensed or receives a certificate of
suitability in accordance with the provisions
of this title, any regulations prescribed under
this title, and all other applicable laws;
(iv) with respect to applicants, has or
guarantees acquisition of adequate business
competence and experience in the operation of
casino gaming facilities, Internet poker
facilities, or Internet gambling facilities;
(v) with respect to applicants, has or will
obtain sufficient financing for the nature of
the proposed operation and from a suitable
source; and
(vi) has disclosed to the qualified State
agency all known affiliations or relationships,
whether direct or indirect.
(B) Unsuitable.--An applicant or any other person
may not be determined to be suitable under this
subsection if the applicant or such person--
(i) has failed to provide information and
documentation material to a determination of
suitability for licensing under paragraph (1);
(ii) has supplied information which is
untrue or misleading as to a material fact
pertaining to any such determination;
(iii) has been convicted of an offense that
is punishable by imprisonment of more than 1
year;
(iv) is delinquent in the payment of any
applicable Federal or State tax, tax penalty,
addition to tax, or interest owed to a
jurisdiction in which the applicant or person
operates or does business, unless such payment
has been extended or is the subject of a
pending judicial or administrative dispute;
(v) has not certified in writing that the
person submits to personal jurisdiction in the
United States; or
(vi) fails to comply with such other
standard as the applicable qualified State
agency considers appropriate.
(C) Consideration of previous operation of internet
gambling facility.--In carrying out a suitability
analysis of a person under this subsection, a qualified
State agency shall consider whether such person
operated an Internet gambling facility before the date
of the enactment of this Act and the scope of such
person's activities with respect to such operation.
(3) Ongoing requirement.--A licensee (and any other person
who is required to be determined to be suitable for licensing
in connection with such licensee) shall meet the standards
necessary to be suitable for licensing or to receive a
certificate of suitability, as the case may be, throughout the
term of the license.
(4) Certificate of suitability for significant vendors.--
(A) In general.--If a qualifying body determines
under paragraph (1) that a significant vendor of an
applicant is suitable under such paragraph, the
qualifying body shall issue a certificate to such
vendor that certifies the suitability of such vendor.
(B) Revocation of certificate.--A qualified State
agency that issues a certificate to a significant
vendor under subparagraph (A) shall revoke the
certificate if at any time the significant vendor no
longer meets the standards necessary for a
determination of suitability.
(D) Certificates issued by other qualified state
agency.--A qualified State agency may, but need not,
accept a certificate issued to a significant vendor by
another qualified State agency as evidence of the
suitability of the significant vendor.
(5) Other vendors.--
(A) Notice.--A licensee shall promptly notify the
qualified State agency that issued the license to the
licensee of all persons that are not significant
vendors that--
(i) direct, provide, or solicit customers
to or for the licensee's Internet poker
facility, or materially assist in any of those
tasks, in return for a commission or other fee;
(ii) hold themselves out to the public as
offering bets or wagers on licensee's behalf;
(iii) offer bets or wagers under their own
names or brands but using and relying on
licensee's Internet poker facilities;
(iv) license trademarks, trade names,
service marks, or other similar intellectual
property to the licensee; or
(v) own a substantial interest in or
control a person described in clause (i), (ii),
(iii), or (iv).
(B) Suitability of other vendors and persons.--A
qualified State agency that reviews an application of
an applicant for a license or issues a license to a
licensee may, at the sole discretion of the qualified
State agency and on a case-by-case basis, require as a
condition of such license that a person meet
suitability requirements under paragraph (1) if the
person--
(i) is described in subparagraph (A) with
respect to the applicant or licensee;
(ii) provides services to an applicant or
licensee and the qualified State agency
determines that with respect to such services,
there is a substantial risk of circumvention of
the suitability requirements applicable to
significant vendors; or
(iii) is associated with the applicant or
licensee or one of the significant vendors of
the applicant or licensee and the qualified
State agency determines such person may pose a
threat to the integrity of Internet poker
facilities operated by the applicant or
licensee.
(C) Information.--A qualified State agency may
require such information from an applicant, licensee,
significant vendor or other person identified in this
paragraph as the qualified State agency considers
necessary to carry out this paragraph.
(6) Enforcement actions.--
(A) In general.--If the Secretary or the qualified
State agency that issued a license to a licensee finds
that the licensee, or any other person that is subject
to a required determination of suitability in
connection with such licensee, fails to meet the
suitability requirements of this subsection at any time
during the tenure of the license, the Secretary or the
qualified State agency may take action to protect the
public interest, including, if the Secretary or
qualified State agency considers necessary, the
suspension or termination of the license.
(B) Imposition of conditions including removal of
parties.--Notwithstanding a determination under
subparagraph (A), the Secretary or the qualified State
agency that issued a license to a licensee may allow
the licensee to continue engaging in licensed
activities by imposing conditions on the person to
which subparagraph (A) is applicable under penalty of
revocation or suspension of a license or certificate of
suitability, including--
(i) the identification of any person
determined to be unsuitable; and
(ii) the establishment of appropriate
safeguards to ensure such person is excluded
from any management or involvement in operation
of the licensed activities.
(7) Administrative provisions.--
(A) Background check and investigation.--Each
qualified State agency shall establish standards and
procedures for conducting background checks and
investigations for purposes of this subsection.
(B) Privilege.--Any written or oral statement made
in the course of an official proceeding of the
Secretary or a qualified State agency, by any member
thereof, or any witness testifying under oath which is
relevant to the purpose of the proceeding and relates
to the review of an application for a license under
this title, is privileged and shall not give rise to
liability for defamation or relief in any civil action.
(C) Additional privilege.--Notwithstanding section
552 of title 5, United States Code, or any other
Federal, State, or tribal law to the contrary, any
communication or document of an applicant, licensee,
significant vendor, or affiliate thereof, which is made
or transmitted pursuant to this title to the Secretary
or a qualified State agency or any of their agents or
employees, except information that is already public,
shall be privileged and shall not be disclosed by the
Secretary or the qualified State agency without the
prior written consent of the applicant, licensee,
significant vendor, or affiliate thereof (as
applicable), or pursuant to a lawful court order, grand
jury subpoena, or similar procedure. To the extent
practicable, the Secretary or qualified State agency
shall provide timely notice of the proceedings to the
applicant, licensee, significant vendor, or affiliate
thereof (as applicable).
(D) Preservation of privilege recognized under
other provisions of law.--Any privilege recognized
under any other applicable provision of Federal, State,
or tribal law, including attorney-client, physician-
patient, and accountant-client privileges, shall not be
waived or lost because a document or communication
otherwise protected by the privilege is disclosed to
the Secretary or a qualified State agency.
(E) Confidentiality.--Any communication or
document, except information that is already public,
shall be treated as confidential and may not be
disclosed, in whole or part, by the Secretary or a
qualified State agency without a lawful court order or
as otherwise expressly required by law, if the
communication or document is--
(i) required by the Secretary or qualified
State agency to be disclosed by the applicant,
licensee, or significant vendor, including
applications, financial or earnings
information, and criminal records, whether of
the applicant or licensee or of any affiliate,
employee, officer, director or significant
vendor thereof, or of any other third party; or
(ii) prepared or obtained by an agent or
employee of the Secretary or qualified State
agency that contains information described in
clause (i).
(d) Additional Requirements for a License.--In order to obtain a
license under this section, an Internet poker facility shall
demonstrate to the qualified State agency that such facility maintains
appropriate safeguards and mechanisms, in accordance with standards
established by the qualified State agency, including appropriate
safeguards and mechanism to--
(1) ensure, to a reasonable degree of certainty, that the
individual placing a bet or wager is not less than 21 years of
age;
(2) ensure, to a reasonable degree of certainty, that the
individual placing a bet or wager is physically located in a
jurisdiction that has not prohibited such bets or wagers at the
time the bet or wager is placed;
(3) ensure, to a reasonable degree of certainty, that all
taxes relating to Internet poker from persons engaged in bets
or wagers relating to such Internet poker are collected or
reported, as required by law, at the time of any payment of
proceeds of such bets or wagers;
(4) ensure that all taxes relating to the operation of an
Internet poker facility from any licensee are collected and
disbursed as required by law and that adequate records to
enable later audit or verification are maintained;
(5) prevent, to a reasonable degree of certainty, fraud,
money laundering, and terrorist financing;
(6) ensure, to a reasonable degree of certainty, compliance
with the requirements of section 106;
(7) protect, to a reasonable degree of certainty, the
privacy and online security of any person engaged in bets or
wagers with the licensee's Internet poker facility;
(8) ensure that any user fee required under subsection (e)
is paid to the qualified State agency;
(9) ensure, to a reasonable degree of certainty, that
Internet poker games are fair and honest, and to prevent, to a
reasonable degree of certainty, cheating, including collusion,
and use of cheating devices, including use of software programs
(sometimes referred to as ``bots'') that make bets or wagers
according to algorithms; and
(10) such other mechanisms and safeguards as the qualified
State agency may establish.
(e) Fees for Administrative Expenses.--
(1) User fees.--
(A) In general.--The cost of administering this
title with respect to each applicant, licensee, and
significant vendor, including the cost of any review or
examination of a licensee or its significant vendors to
ensure compliance with the terms of the license and
this title, shall be assessed by the qualified State
agency receiving an application or issuing a license
against the applicant, licensee, or significant vendor,
as the case may be, by written notice in an amount that
the qualified State agency determines is necessary to--
(i) meet the qualified State agency's
expenses in carrying out such administration,
review, or examination; and
(ii) to cover the qualified State agency's
share of the amount determined by the Secretary
under paragraph (3) to cover the expenses
incurred by the Secretary in carrying out the
provisions of this title.
(B) Expenses for review or examination.--Expenses
that are attributable to review or examination of a
particular applicant, licensee, or significant vendor
shall be assessed under subparagraph (A) against that
applicant, licensee, or significant vendor.
(C) Expenses for general administration.--Expenses
for general administration shall be assessed against
all licensees equally.
(D) Disposition of user fees.--Amounts assessed by
a qualified State agency as user fees under this
paragraph shall--
(i) be remitted to the Secretary, in the
amount of that State's share as determined
under paragraph (3) for deposit in the Treasury
in accordance with subparagraph (B) of such
paragraph; and
(ii)(I) be available to the qualified State
agency to cover expenses incurred by the
qualified State agency in carrying out the
provisions of this title; and
(II) not be construed to be Government
funds or appropriated monies, or subject to
apportionment for the purposes of any other
provision of law.
(F) Collection.--
(i) Referral.--If a licensee or significant
vendor fails to pay a user fee to a qualified
State agency under this paragraph after the
assessment of the fee has become final--
(I) the qualified State agency may
recover the amount assessed by action
in a court of the State or Indian tribe
of the qualified State agency or in the
appropriate United States district
court, along with any costs of
collection and attorney fees; and
(II) such failure may be grounds
for denial of an application for a
license under this title or revocation
of a license or certificate of
suitability under this title.
(ii) Assessment reviewable.--In any civil
action under clause (i), a court may review the
validity and adjust the amount of the user
fees.
(G) User fees of significant vendors may be paid by
applicants and licensees.--A user fee assessed against
a significant vendor may be paid by an applicant or
licensee on behalf of the significant vendor.
(2) Direct and exclusive obligation of licensee.--With
respect to a licensee, a user fee shall be the direct and
exclusive obligation of the licensee and may not be deducted
from amounts available as deposits to any person placing a bet
or wager with the licensee.
(3) User fees established by secretary.--
(A) In general.--The Secretary shall determine the
funding requirements necessary to meet the Secretary's
cost of administering this title and notify each
qualified State agency of its proportional share to be
collected by such agency under paragraph (1)(A).
(B) Disposition of user fees.--Amounts remitted to
the Secretary under paragraph (1)(D)(i) shall--
(i) be deposited into a separate account in
the Treasury to be known as the ``Internet
Poker Oversight Fund''; and
(ii) be available to the Secretary in such
amounts, subject to appropriations, to cover
expenses incurred by the Secretary in carrying
out the provisions of this title.
(f) Approval of License.--
(1) In general.--A qualified State agency may issue
licenses under this title for the operation of an Internet
poker facility to any applicant that--
(A) owns or controls a company that operates a
casino gaming facility, qualified race track, or
qualified card room and owned or controlled such
facility, race track, or card room on the date that is
10 days before the date of the enactment of this Act;
(B) for the duration of the 5-year period ending on
the date on which the applicant submits an application
under subsection (b)(1), owned or controlled a casino
gaming facility, qualified race track, or qualified
card room;
(C) is owned or controlled by a person who--
(i) owns or controls a company that
operates a casino gaming facility, qualified
race track, or qualified card room and owned or
controlled such facility, race track, or card
room on the date that is 10 days before the
date of the enactment of this Act; or
(ii) for the duration of the 5-year period
ending on the date on which the applicant
submits an application under subsection (b)(1),
owned or controlled a casino gaming facility,
qualified race track, or qualified card room;
(D) for the duration of the 5-year period ending on
the date on which the applicant submits an application
under subsection (b)(1), under license issued by a
State or Indian tribe manufactured and supplied to
casino gaming facilities with--
(i) not fewer than 500 slot machines; or
(ii) qualified mobile gaming systems; and
(E) meets other criteria established by the
Secretary or by the qualified State agency under this
title.
(3) Expansion of licensees only if no risk to public.--
Beginning on the date that is 2 years after the date of first
issuance specified in section 115(b), the Secretary may, by
rule, authorize the issuance of licenses to applicants other
than those described in paragraph (2) if the Secretary
determines, after providing the public with notice and an
opportunity to comment, that such authorization will not
significantly increase the risk that the standards described in
subsection (d) will not be satisfied by licensees.
(4) Authority of secretary to revoke licenses.--
Notwithstanding any certificate of suitability or license
issued by a qualified State agency, the Secretary may suspend
or revoke such certificate or license if the Secretary has
reason to believe that the recipient does not meet the
suitability requirements established under subsection (c) or,
as applicable, any other requirement imposed on a licensee
under this title. The Secretary may not overturn a decision by
a qualified State agency to deny or to terminate a license or
to deny or revoke a certificate of suitability.
(5) Conflicts between qualified state agencies.--If a
qualified State agency denies a license, terminates a license,
denies a certificate of suitability, or revokes a certificate
of suitability to a person and within 12 months of such denial,
termination, or revocation another qualified State agency
grants such person a license or certificate of suitability, the
Secretary shall--
(A) commence a review of such license or
certificate of suitability; and
(B) not later than 90 days after such commencement,
determine whether to act under paragraph (4).
(6) Control defined.--In this subsection, the term
``control'' means, with respect to a person, the possession,
directly or indirectly, of the power to direct or influence the
direction of the management or policies of the person, whether
through the ownership of voting securities, through a
management, executive officer, or board position, by
shareholders or similar agreement, or otherwise.
(g) Location of Remote Gaming Equipment.--A licensee shall maintain
its remote gaming equipment within the territory of the United States
throughout the term of its license. A qualified State agency may
require applicants that seek a license from such qualified State agency
to locate that equipment within the territory of the State or Indian
tribe of the qualified State agency if the qualified State agency
determines that such requirement will advance the regulatory interests
of this title.
(h) License Is a Privilege Not a Right.--A decision by a qualified
State agency not to grant a person a license or certificate of
suitability, or to terminate a license, or revoke a certificate of
suitability, is not reviewable under Federal law or the law of any
jurisdiction other than the jurisdiction of the qualified State agency.
The State or Indian tribe of the jurisdiction of the qualified State
agency may, but need not, provide an opportunity to appeal.
(i) Term, Renewal, and Transfer of License.--
(1) Term.--Any license issued under this title shall be
issued for a 5-year term beginning on the date of issuance. A
license may be renewed in accordance with requirements
prescribed by the qualified State agency that issued the
license under this title.
(2) Transfer.--A transfer of a license, change of control
of a licensee, or change in significant vendor shall require
prior approval by the qualified State agency that issued the
license. The qualified State agency shall at a minimum ensure
the suitability requirements of subsection (c) continue to be
satisfied before approving any such transfer or change.
(j) Administrative Provisions.--
(1) Determination of internet poker.--
(A) Initial determination by qualified state
agency.--A determination of whether a game, hand,
tournament, or other contest of a licensee is Internet
poker shall be made in the first instance by the
qualified State agency that issued the license to such
licensee under this title.
(B) Challenges.--
(i) Challenge made with secretary.--A
licensee or qualified State agency may file a
challenge with the Secretary regarding any
determination of the State agency under
subparagraph (A) that a game, hand, tournament,
or other contest of another licensee is
Internet poker.
(ii) Determination made by secretary within
30 days.--If a challenge is made under clause
(i), the Secretary shall make a determination
of whether the game, hand, tournament, or other
contest is Internet poker not later than 30
days after the date on which the challenge is
made.
(iii) Operation until determination.--A
licensee that offers a game, hand, tournament,
or other contest that is challenged under
clause (i) may continue to offer such game,
hand, tournament, or other contest until the
Secretary makes a determination under clause
(iii).
(C) Appeals.--Not later than 30 days after the date
on which the Secretary makes a determination under
subparagraph (B)(iii), a licensee or a qualified State
agency may appeal such determination to the United
States District Court for the District of Columbia.
Such court shall set aside the Secretary's
determination if the court determines that the
Secretary's determination was--
(i) arbitrary, capricious, an abuse of
discretion, or otherwise not consistent with
law; or
(ii) without observance of procedure
required by law.
(2) Challenges under state law.--Except as provided in
paragraph (1) and unless otherwise specifically provided in
this title, actions taken by a qualified State agency may be
challenged by applicants and licensees only as permitted under
the law of the State or Indian tribe in which the qualified
State agency is located.
(3) Summons.--
(A) In general.--The Secretary may issue a summons
with respect to an applicant or licensee necessary to
carry out the provisions of this title.
(B) Production at designated site.--A summons
issued by the Secretary pursuant to this paragraph may
require that books, papers, records, or other data
stored or maintained at any place be produced at any--
(i) business location of a licensee or
applicant for a license;
(ii) designated location in the State or
Indian lands of the applicable qualified State
agency; or
(iii) designated location in the District
of Columbia.
(C) No liability for expenses.--The Secretary shall
not be liable for any expense incurred in connection
with the production of books, papers, records, or other
data under this paragraph.
(D) 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 determined by the Secretary.
(E) Authorization to invoke aid of courts.--The
Secretary may invoke the aid of any court of the United
States to compel compliance with the summons 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.
(F) Power of courts to compel appearance.--The
court may issue an order requiring the person summoned
to appear before the Secretary--
(i) to produce books, papers, records, and
other data;
(ii) to give testimony as may be necessary
to explain how such material was compiled and
maintained;
(iii) to allow the Secretary to examine the
business of a licensee; and
(iv) to pay the costs of the proceeding.
(G) Contumacy or refusal.--Any failure to obey the
order of the court under this paragraph may be punished
by the court as a contempt thereof. All process in any
case under this subsection may be served in any
judicial district in which such person may be found.
SEC. 105. ENFORCEMENT.
(a) Disciplinary Action.--
(1) In general.--A licensee may be subject to disciplinary
action, including suspension or revocation of its license, by a
qualified State agency that issued a license to the licensee or
by the Secretary if the licensee fails to comply with any
provision of this title, any regulation prescribed thereunder,
or any other applicable provision of State or tribal law.
(2) Initiating agency.--Only the Secretary or the qualified
State agency which granted the license may initiate
disciplinary action under this title.
(3) Savings provision.--Nothing in this subsection shall be
construed to prohibit a law enforcement authority or regulatory
body that has authority over a licensee or an affiliated
person, independent from this title, from taking action under
the law of that law enforcement authority or regulatory body.
(4) Disciplinary procedures.--
(A) In general.--A qualified State agency shall
commence disciplinary action under this subsection
against a licensee upon service of a formal written
complaint upon the licensee, with a copy forwarded to
the Secretary, that sets forth the grounds for the
disciplinary action and the proposed penalty that is
being sought, which may include any or all of the
imposition of a fine as provided pursuant to subsection
(m)(1) or limitation, condition, suspension or
revocation of the license.
(B) In accordance with law of jurisdiction of
qualified state agency.--The disciplinary process shall
proceed according to the law of the jurisdiction of the
applicable qualified State agency.
(5) Finality of action and appeals.--
(A) Finality.--Any disciplinary action shall be
treated as a final action.
(B) Action by qualified state agencies.--A licensee
aggrieved by disciplinary action by a qualified State
agency may file an appeal in the jurisdiction where the
qualified State agency taking such action is located
only to the extent permitted by the law of such
jurisdiction.
(C) Action by secretary.--A licensee aggrieved by
disciplinary action by the Secretary may file an appeal
in the United States District Court for the District of
Columbia. Such court shall set aside the action if it
determines that the action was--
(i) arbitrary, capricious, an abuse of
discretion, or otherwise not consistent with
law; or
(ii) without observance of procedure
required by law.
(6) Pending appeal.--During the period in which a
suspension or revocation of an existing license is being
challenged through a pending judicial proceeding, the court
handling the challenge may allow the licensee to continue
offering bets and wagers in full compliance with the terms of
its existing license and any other conditions the court
considers necessary, if the court determines that--
(A) the appellant has a reasonable likelihood of
success on the merits; and
(B) allowing the appellant to continue offering
bets and wagers while the appeal is pending will not
threaten the public interest.
(7) Return of customer funds.--If a licensee's license is
revoked and no appeal pursuant to paragraph (5) is pending, the
licensee shall--
(A) return all customer funds in an orderly manner
not later than 30 days after the date of the revocation
of the license; or
(B) place in escrow those sums return of which to
United States customers is not feasible due to change
in customer address, bank details, or similar
difficulty, in an account with a financial institution
in the United States for safekeeping and orderly
disposition by the Secretary.
(8) Referral to attorney general.--If, in the course of
carrying out the provisions of this title, the Secretary or a
qualified State agency finds a substantial basis to believe
that a person has violated section 103, the Secretary or
qualified State agency shall refer such matter to the Attorney
General.
(b) Civil Money Penalties.--
(1) In general.--
(A) Penalties assessed by qualified state
agencies.--A qualified State agency may assess upon any
licensee or other person subject to the requirements of
this title for each violation of this title or any
regulation prescribed or order issued under this title,
a civil penalty of not more than the greater of--
(i) the amount involved in the violation,
if any;
(ii) $250,000 for an individual and
$750,000 for a corporation; or
(iii) such other amount as provided under
the applicable State or tribal law of the
qualified State agency.
(B) Penalties assessed by secretary.--The Secretary
may assess upon any licensee or other person subject to
the requirements of this title for each violation of
this title or any regulation prescribed or order issued
under this title, a civil penalty of not more than the
greater of--
(i) the amount involved in the violation,
if any; or
(ii) $250,000 for an individual and
$750,000 for a corporation.
(C) Not cumulative.--
(i) In general.--The penalties authorized
under subparagraphs (A) and (B) shall not be
cumulative and only one such penalty may be
assessed per violation.
(ii) Construction.--Clause (i) shall not be
construed to limit the authority of a
qualifying body or the Secretary, as the case
may be, to pursue a civil penalty for each
violation of a related series of violations.
(D) Failure to obtain a license.--Notwithstanding
any other provision of law, the Secretary may assess
upon a person that is required to obtain a license
under this title, but fails to obtain a license under
this title, a civil penalty of not more than the
greater of--
(i) the amount of bets or wagers taken by
the person from players in the United States
during the period that a license was needed but
not held by the person; or
(ii) $1,000,000 per day that the person
accepts bets or wagers from players in the
United States during the period that a license
was needed but not held by the person.
(E) Construction.--Nothing in this paragraph shall
be construed to affect the ability of a law enforcement
official to seek criminal penalties against a person.
(2) Assessment.--
(A) Enforcement by qualified state agencies.--
Qualified State agencies and such other entities as are
authorized by applicable State law shall enforce the
provisions of this title under the law of the
applicable State or Indian tribe, and penalties shall
be determined, reviewable, collectable, and disposed of
as provided under such law.
(B) Enforcement by secretary.--
(i) Written notice.--Any penalty imposed
under paragraph (1)(B) shall be assessed and
collected by the Secretary by written notice.
(ii) Finality of assessment.--If, with
respect to any assessment under paragraph
(1)(B), a hearing is not requested pursuant to
clause (v) within the period of time allowed
under such clause, the assessment shall
constitute a final agency order.
(iii) Authority to modify or remit
penalty.--The Secretary may compromise, modify,
or remit any penalty which the Secretary may
assess or has already assessed under paragraph
(1)(B).
(iv) Mitigating factors.--In determining
the amount of any penalty imposed under
paragraph (1)(B), the Secretary shall take into
account the appropriateness of the penalty with
respect to the following:
(I) The size of the financial
resources and the good faith of the
person against whom the penalty is
assessed.
(II) The gravity of the violation.
(III) The history of previous
violations.
(IV) Such other matters as justice
may require.
(v) Hearing.--The person against whom any
penalty is assessed under paragraph (1)(B)
shall be afforded an agency hearing if such
person submits a request for such hearing not
later than 20 days after the date of the
issuance of the notice of assessment.
(vi) Collection.--
(I) Referral.--If any person fails
to pay an assessment after any penalty
assessed under this subparagraph has
become final, the Secretary shall
recover the amount assessed by action
in the appropriate United States
district court.
(II) Scope of review.--In any civil
action under subclause (I), the
validity and appropriateness of the
penalty shall be subject to review for
abuse of agency discretion.
(vii) Disbursement.--All penalties
collected under authority of paragraph (1)(B)
shall be deposited into the Treasury of the
United States.
(3) Condition for licensure.--Payment by a licensee of any
civil penalty assessed under this subsection that has become
final shall be a requirement for the retention of its license.
SEC. 106. COMPULSIVE GAMING, RESPONSIBLE GAMING, AND SELF-EXCLUSION
PROGRAM REQUIREMENTS.
(a) Regulations Required.--Each qualified State agency shall,
before issuing any licenses under this title, establish requirements
for the development of a Compulsive Gaming, Responsible Gaming, and
Self-Exclusion Program that each licensee of that qualified State
agency shall implement as a condition of licensure. Such requirements
shall also provide for the establishment of a program to alert the
public to the existence, consequences, and availability of the self-
exclusion list established under subsection (c).
(b) Minimum Requirements.--At a minimum, each qualified State
agency shall require that licensees--
(1) provide informational materials written in plain
language about responsible gaming, including information about
the self-exclusion list established under subsection (c) and
how a player may request placement on the list, each time a
player signs in to make a bet or wager, which materials shall
be provided via a prominently displayed hyperlink or comparable
mechanism;
(2) provide informational materials about responsible
gaming to any player that requests such materials;
(3) make continuously available individualized responsible
gaming options that any customer may choose, including allowing
customers to self-limit their access to the issuance of credit,
check cashing, or direct mail marketing by the licensee, in
each case as and to the extent that the qualified State agency
may consider appropriate;
(4) ensure to a reasonable degree of certainty that persons
on the list of self-excluded persons established pursuant to
subsection (c) are prevented from initiating any bets or wagers
within the scope of this title; and
(5) ensure that the information required under this
subsection is clearly and prominently made available by the
licensee in each language in which services of the Internet
poker facility of the licensee are offered.
(c) List of Persons Self-Excluded.--
(1) Establishment.--
(A) Lists maintained by qualified state agencies.--
Each qualified State agency shall establish and
maintain a list of persons self-excluded from playing
Internet poker through Internet poker facilities
licensed by the qualified State agency. Each week, each
qualified State agency shall submit to the Secretary a
current copy of the list.
(B) Master list maintained by secretary.--The
Secretary shall establish and maintain a master list of
all persons self-excluded from playing Internet poker
through Internet poker facilities licensed under this
title. Such list shall consist of all persons submitted
under subparagraph (A). The Secretary shall make the
master list available to all qualified State agencies
and licensees.
(C) Placement request.--Any person may request
placement on the list of self-excluded persons by--
(i) acknowledging in a manner to be
established by each qualified State agency with
respect to its licensees that the person wishes
to be denied gaming privileges within the scope
of this title; and
(ii) agreeing that, during any period of
voluntary exclusion, the person may not collect
any winnings or recover any losses resulting
from any gaming activity at any Internet
gambling facility of a licensee.
(2) Limitation on liability.--
(A) In general.--Except as provided in subparagraph
(B), the United States, the Secretary, a qualified
State agency, the State or Indian tribe in which that
qualified State agency is located, an enforcement
agent, licensee, or any employee or agent thereof,
shall not be liable to any self-excluded person or to
any other party in any judicial or administrative
proceeding for any harm, monetary or otherwise, which
may arise as a result of--
(i) any failure to withhold gaming
privileges from, or to restore gaming
privileges to, a self-excluded person;
(ii) otherwise permitting a self-excluded
person to engage in gaming activity while on
the list of self-excluded persons; or
(iii) disclosure of information about
individuals placed on the list of self-excluded
persons.
(B) Licensees.--A licensee or employee or agent
thereof may be liable to a self-excluded person in a
judicial or administrative proceeding for a harm
described in subparagraph (A) to the extent provided
under the law of the State or Indian tribe of the
qualified State agency that issued the license.
(C) Rule of construction.--Nothing in this
paragraph shall be construed to prevent the Secretary
or a qualified State agency from assessing a regulatory
sanction against a licensee or person for failing to
comply with a provision of this section or a regulation
prescribed thereunder or for misuse of any list of
self-excluded persons for purposes not authorized under
this section.
(3) Disclosure provisions.--
(A) In general.--Notwithstanding any other
provision of Federal, State, or tribal law, the list of
self-excluded persons shall not be open to public
inspection.
(B) Affiliate disclosure.--If necessary to
effectuate the self-exclusion purposes of this
subsection, any licensee may disclose the identities of
persons on the self-excluded list to any significant
vendor, service provider, or affiliated company to the
extent that the significant vendor, service provider,
or affiliated company maintains such information under
confidentiality provisions comparable to those in this
subsection.
(d) Gaming by Prohibited Persons.--
(1) Prohibition on benefitting from prohibited gaming
activity.--A person who is prohibited from gaming with a
licensee by law, or by order of the Secretary, a qualified
State agency, or any court of competent jurisdiction, including
any person on the self-exclusion list under subsection (c),
shall not collect, in any manner or proceeding, any winnings or
recover any losses arising as a result of any prohibited gaming
activity.
(2) Forfeiture.--In addition to any other penalty provided
by law, any money or thing of value that has been obtained by,
or is owed to, any prohibited person by a licensee as a result
of bets or wagers made by a prohibited person after the
applicable prohibition has become effective shall be subject to
forfeiture by order of the Secretary or a qualified State
agency, following notice to the prohibited person and
opportunity to be heard.
(3) Deposit of forfeited funds.--Any funds forfeited
pursuant to this subsection shall be deposited into the
Treasury of the United States, or, in the case of a forfeiture
to a qualified State agency, as provided by the applicable
State or tribal law.
(e) Requirements With Respect to Child Support Delinquents.--
(1) In general.--When it is made known to the Secretary or
a qualified State agency by a Federal or State court or a
competent State agency involved with the administration or
enforcement of a court-ordered child support payment that a
particular individual is delinquent with respect to court-
ordered child support payments, the Secretary shall include
that individual on the list established under subsection (c).
(2) Removal from list.--Individuals placed on the list
pursuant to paragraph (1) shall be removed from such list if
the court or agency that made such individual's delinquency
known to the Secretary notifies the Secretary that such
individual is no longer delinquent.
(f) Administrative Provisions.--
(1) Rule of construction.--No provision of this section
shall be construed as creating a legal duty in the Secretary, a
qualified State agency, a licensee, or any employee or agent
thereof to identify or to exclude compulsive players not on the
list of self-excluded persons.
(2) No cause of action.--The Secretary, a qualified State
agency, a licensee, and any employee or agent thereof, shall
not be liable to any person in any proceeding for losses or
other damages of any kind arising out of that person's gaming
activities based on a claim that the person was a compulsive,
problem, or pathological player.
SEC. 107. PROHIBITIONS AND RESTRICTIONS.
(a) Prohibition on Bets or Wagers on Sporting Events and Games
Other Than Internet Poker.--
(1) In general.--No provision of this title shall be
construed to authorize any licensee to accept a bet or wager
on--
(A) any game, event, or activity that is not
Internet poker; or
(B) any sporting event in violation of any
applicable provision of Federal or State law.
(2) Construction.--Nothing in this title shall be construed
to repeal or to amend any provision of Federal or State law
prohibiting, restricting, or otherwise addressing bets or
wagers on sporting events, including provisions of Federal and
State law that permit participation in any fantasy or
simulation sports games.
(b) Prohibition on the Use of Credit Cards for Internet Gambling.--
(1) In general.--No licensee, no person operating on behalf
of a licensee, and no person accepting payment for or
settlement of a bet or wager who intends to transmit such
payment to a person licensee, may accept a bet or wager or
payment for or settlement of a bet or wager that is transmitted
or otherwise facilitated with a credit card (as defined in
section 5362(11) of title 31, United States Code).
(2) Exception.--
(A) Clarification and scope.--For any person
licensed to take bets or wagers in accordance with the
Interstate Horseracing Act of 1978, the prohibition in
paragraph (1) shall only apply to those activities
conducted pursuant to a license under this title.
(B) Intrastate activities.--For any person involved
in legal, land-based or State- or tribal-regulated
intrastate gambling, the prohibition in paragraph (1)
shall only apply to those activities conducted pursuant
to a license under this title.
(c) Public Internet Poker Parlors Prohibited.--
(1) In general.--It shall be considered a violation of this
title to operate a place of public accommodation, club
(including a club or association limited to dues-paying members
or similar restricted groups), or similar establishment in
which computer terminals or similar access devices are made
available to be used principally for the purpose of accessing
Internet gambling facilities.
(2) Criminal penalties.--Any person who violates subsection
(a) shall be fined under title 18, United States Code,
imprisoned for not more than 5 years, or both.
(3) Construction.--Nothing in this title shall be construed
to authorize or otherwise to permit the operation of places of
public accommodation, clubs (including clubs or associations
limited to dues-paying members or similar restricted groups)
and similar establishments that permit access to Internet
gambling facilities.
(4) Relation to state, local, and tribal law.--Places of
public accommodation, clubs, or similar establishments
described in subsection (c) shall be subject to all otherwise
applicable State, local, and tribal police, criminal, zoning,
and other regulatory powers which are not intended to be
limited in any way by this title.
SEC. 108. SAFE HARBOR.
It shall be an affirmative defense to any prosecution or
enforcement action under any provision of Federal, State, or tribal law
that the activity forming the basis of such prosecution or enforcement
action is authorized under and has been carried out lawfully in
accordance with and under the terms of--
(1) this title; or
(2) the Interstate Horseracing Act of 1978 (15 U.S.C. 3001
et seq.).
SEC. 109. RELATION TO SUBCHAPTER IV OF CHAPTER 53 OF TITLE 31, UNITED
STATES CODE.
Subchapter IV of chapter 53 of title 31, United States Code, shall
not apply to any bet or wager--
(1) occurring pursuant to a license issued under this
title, subject to section 109; or
(2) that is permissible under the Interstate Horseracing
Act of 1978 (15 U.S.C. 3001 et seq.).
SEC. 110. CHEATING AND OTHER FRAUD.
(a) Cheating and Cheating Devices Prohibited.--
(1) Cheating prohibited.--No person initiating, receiving,
or otherwise making a bet or wager with a licensee, or sending,
receiving, or inviting information assisting with a bet or
wager with a licensee shall knowingly violate, attempt to
violate, or assist another in violating the rules of play
established by the licensee for the purpose of obtaining
prohibited or unfair advantage in any game authorized under
this title.
(2) Cheating devices.--Except as provided in paragraph (3),
no person initiating, receiving, or otherwise making a bet or
wager with a licensee, or sending, receiving, or inviting
information assisting with a bet or wager with a licensee shall
knowingly use, possess, or assist another in the use of, an
electronic, electrical, or mechanical device or software or
other program or tool which is designed, constructed, or
programmed specifically for use in obtaining an advantage in
any game authorized under this title, where such advantage is
prohibited or otherwise violates the rules of play established
by the licensee.
(3) Permissible uses.--It shall not be a violation of this
subsection for a licensee, its agents, a qualified State
agency, or its agent to use or posses a device described in the
preceding sentence if--
(A) such use or possession is solely for purposes
of testing an Internet poker facility;
(B) such device is not used in live play involving
actual bets or wagers; and
(C) such device is registered with the Secretary
and the qualified State agency that issued the
applicable license.
(4) Disclosure to public not required.--Notwithstanding any
other provision of law, a registration under paragraph (3)(C)
is not required to be made available to the public.
(b) Additional Offense.--
(1) In general.--Except as provided in paragraph (3), no
person initiating, receiving, or otherwise making a bet or
wager with a licensee, or sending, receiving, or inviting
information assisting with a bet or wager with a licensee,
shall knowingly use, possess, or assist another in the use of
any cheating device with intent to cheat or defraud any
licensee or other persons placing bets or wagers with such
licensee.
(2) Bots.--A software program that makes bets or wagers
according to an algorithm shall constitute a type of cheating
device under this subsection.
(3) Permissible uses.--It shall not be a violation of this
subsection for a licensee, its agents, a qualified State
agency, or its agent to use or posses a device described in
paragraph (1) or (2) if--
(A) such use or possession is solely for purposes
of testing an Internet poker facility;
(B) such device is not used in live play involving
actual bets or wagers; and
(C) such device is registered with the qualified
State agency that issued the applicable license.
(4) Disclosure to public not required.--Notwithstanding any
other provision of law, a registration under paragraph (3)(C)
is not required to be made available to the public.
(c) Permanent Injunction.--Upon conviction of a person for
violation of this section, the court may enter a permanent injunction
enjoining such person from initiating, receiving, or otherwise making
bets or wagers or sending, receiving, or inviting information assisting
in the placing of bets or wagers.
(d) Criminal Penalty.--Whoever violates subsection (a) or (b) shall
be fined under title 18, United States Code, or imprisoned for not more
than 3 years, or both.
(e) Reports.--
(1) Recommended minimum standards.--Not later than 180 days
after the date of the enactment of this Act, the Secretary
shall submit to Congress a report containing the
recommendations of the Secretary on what minimum standards
qualifying bodies should adopt to carry out the requirements of
subsection (a).
(2) Identification of threats to operation of internet
poker facilities.--Not later than 1 year after the date that
licenses are first issued under section 118(a), the Director of
the National Institute of Standards and Technology shall submit
to Congress a report that identifies threats to the integrity
of Internet poker facilities operated by licensees, including
identification of technologies that could be used to hack
computer networks, facilitate cheating, or otherwise place
consumers at risk of fraud or monetary loss.
SEC. 111. INAPPLICABILITY OF CERTAIN PROVISIONS TO INTERSTATE OFF-TRACK
WAGERS.
The provisions of this title requiring a license and of subchapter
IV of chapter 53 of title 31, United States Code, restricting
acceptance of bets or wagers made by individuals located in the United
States or requiring the blocking or other prevention of restricted
transactions shall not apply with respect to the placing, transmitting,
or receiving of interstate off-track wagers, as such term is defined in
section 3 of the Interstate Horseracing Act of 1978 (15 U.S.C. 3002),
that are permissible under such Act (15 U.S.C. 3001 et seq.), whether
such off-track wager is made by telephone, Internet, satellite, or
other wire or wireless communication facility, service, or medium.
SEC. 112. CONSTRUCTION AND RELATION TO OTHER LAW.
(a) No Impact on Existing Lawful Games.--
(1) In general.--If bets or wagers on certain games of
skill are not regarded as gambling under all provisions of
Federal, State, or tribal law in effect as of the date of
enactment of this Act--
(A) nothing in this title shall be construed to
require licensing under this title with respect to such
games; and
(B) fees paid to participate in such games shall
not be regarded as bets or wagers for purposes of this
title.
(2) Reliance.--Nothing in this title may be relied on as
support for the legality or permissibility of games described
in paragraph (1) without compliance with the licensing and
other requirements of this title
(b) No Effect on Existing Law.--Nothing in this section shall be
construed to repeal, to amend, or to affect the interpretation of any
provision of Federal or State law that was in effect before the date of
the enactment of this Act that--
(1) prohibits, restricts, or otherwise addresses bets or
wagers; or
(2) prohibits fraud, unfair or deceptive acts or practices,
or other criminal activity.
(c) Preemption of State and Tribal Laws.--
(1) In general.--Except as otherwise expressly provided in
this title, the provisions of this title shall supersede any
provisions of the law of any State or Indian tribe expressly
relating to the permitting, prohibiting, licensing, or
regulating of Internet gambling facilities, including Internet
poker facilities, and the law of any State or Indian tribe
expressly relating to the permitting, prohibiting, licensing,
or regulation of gambling, except to the extent such State or
tribal laws are not inconsistent with this title.
(2) Lotteries.--No provision of this title shall be
construed to have any effect on the rights, privileges, or
obligations of a State or tribal lottery as may be provided
under other applicable Federal, State, or tribal law.
(3) Savings provision.--Nothing in this title may be
construed to limit the applicability or enforcement of any
State or tribal consumer protection law or preempt the
applicability of State or tribal trespass, contract, or tort
law.
(d) Relation to Gambling Devices Transportation Act.--Equipment
used by a licensee or significant vendor in the furtherance of licensed
activities pursuant to this title (but not to the extent it is used for
other purposes) shall not be considered a gambling device within the
meaning of section 1 of the Act of January 2, 1951, prohibiting the
transportation of gambling devices in interstate and foreign commerce
(15 U.S.C. 1171).
(e) Scope of Wire Act.--Section 1084 of title 18, United States
Code, is amended by adding at the end the following new subsection:
``(f) This section, subchapter IV of chapter 53 of title 31, and
any other provision of Federal law that establishes criminal penalties
for any activity involved in placing, receiving, or otherwise
transmitting a bet or wager, information assisting in the placing of
bets or wagers, or a communication which entitles the recipient to
receive money or credit as a result of bets or wagers, shall not apply
to any activity that is permissible under the Interstate Horseracing
Act of 1978 (15 U.S.C. 3001 et seq.) or title I of the Internet
Gambling Prohibition, Poker Consumer Protection, and Strengthening
UIGEA Act of 2011.''.
(f) No Impact on Indian Gaming Regulatory Act.--
(1) In general.--No provision of this title or decision or
action taken by an Indian tribe or State pursuant to this title
shall have any effect on non-Internet gaming activities within
the scope of section of the Indian Gaming Regulatory Act (25
U.S.C. 2710) or any successor provisions or on any Tribal-
State compacts or authorities pursuant thereto.
(2) Tribal status or category not affected.--Tribal
operation of Internet poker facilities under this title shall
not be considered class II or class III gaming under such
section, and an Indian tribe's status, category, or class under
such section shall not impact its status or ability to offer
bets or wagers pursuant to this title.
(3) New negotiations not required.--
(A) Indian tribes.--The fact that an Indian tribe
is operating under a license issued pursuant to this
title or that a tribal regulatory body is acting as a
qualified body pursuant to this title shall not require
an Indian tribe to negotiate a new agreement,
limitation, or other provision of tribal-State compact,
agreement, or other understanding with respect to
gaming or revenue-sharing, with regard to any bet or
wager occurring pursuant to a license issued under this
title.
(B) States.--The fact that a State has prohibited
or limited Internet bets or wagers under section
104(a)(3) or that a State regulatory body is acting as
a qualified body pursuant to this title shall not
require the State to negotiate a new agreement,
limitation, or other provision of tribal-State compact,
agreement, or other understanding with respect to
gaming or revenue-sharing, with regard to any bet or
wager occurring pursuant to a license issued under this
title.
SEC. 113. REGULATIONS.
Not later than 180 days after the date of the enactment of this
Act, the Secretary shall prescribe such regulations as the Secretary
considers necessary and where expressly required or authorized to carry
out this title.
SEC. 114. ANNUAL REPORTS.
(a) Licensing and Regulation of Internet Poker Facilities.--Not
later than 1 year after the date that licenses first issue under this
title and annually thereafter, the Secretary shall transmit to Congress
a report on the licensing and regulation of Internet poker facilities
under this title, including--
(1) the amount of fees collected under section 104(e) and,
in cooperation with the Secretary of Treasury, an estimate of
the amount of income tax revenue that is attributable to the
operation of Internet poker facilities during the period
covered by the report;
(2) a list of qualified State agencies, the number of
licensees reviewed by the qualified State agencies under this
title, and the outcomes of such reviews;
(3) a description of the efforts the Secretary has
undertaken to ensure that qualified State agencies are properly
issuing licenses and regulating licensees under this title;
(4) a detailed description of each type of game offered by
licensees and how each type is consistent with the definition
of poker under section 102; and
(5) any other information the Secretary determines may be
useful to Congress.
(c) Consumer Protection.--Not later than 1 year after the date that
licenses first issue under this title and annually thereafter, the
Secretary shall transmit to the Committee on Energy and Commerce of the
House of Representatives and the Committee on Commerce, Science, and
Transportation of the Senate a report on commercial and regulatory
practices carried out to protect consumers with respect to Internet
poker, including the practices carried out pursuant to the requirements
of section 106 and the regulations prescribed pursuant to such section.
Such report shall include--
(1) a detailed description of the efforts of each qualified
State agency to protect consumers from unfair or deceptive acts
or practices, including deceptive advertising and marketing to
minors;
(2) a description of the practices that the Secretary
recommends qualified State agency to adopt to protect
consumers;
(3) such recommendations as the Secretary may have for
legislative action as the Secretary considers necessary to
protect consumers with respect to Internet poker; and
(4) such other information as the Secretary considers
appropriate.
SEC. 115. EFFECTIVE DATE.
(a) In General.--Except as otherwise provided in this title, the
provisions of this title shall take effect on the date that is 30 days
after the date of the enactment of this Act.
(b) Regulations Required Before Issuing Licenses.--Notwithstanding
any other provision of this title, a qualified State agency may not
issue a license under this title before the later of--
(1) the date on which the Secretary prescribes final
regulations under section 113;
(2) the date on which the Secretary of the Treasury
prescribes final regulations pursuant to subsections (a) and
(d) of section 203; and
(3) the date on which the Director of the Financial Crimes
Enforcement Network submits to the Secretary of the Treasury a
list of unlicensed Internet gambling enterprises pursuant to
section 5369(a)(1)(B) of title 31, United States Code, as added
by section 202(a).
TITLE II--STRENGTHENING OF UNLAWFUL INTERNET GAMBLING ENFORCEMENT ACT
OF 2006
SEC. 201. FINANCIAL TRANSACTION PROVIDERS.
(a) In General.--Subchapter IV of chapter 53 of title 31, United
States Code, is amended by adding at the end the following:
``Sec. 5368. Liability of financial transaction providers
``(a) Liability for Certain Financial Activities and
Transactions.--A financial transaction provider shall not be held
liable for engaging in a financial activity or transaction, including a
payments processing activity, in connection with a bet or wager
permitted by the Internet Gambling Prohibition, Poker Consumer
Protection, and Strengthening UIGEA Act of 2011 or the Interstate
Horseracing Act of 1978 (15 U.S.C. 3001 et seq.) unless the financial
transaction provider has actual knowledge that the financial activity
or transaction was conducted in violation of either such Act or any
other applicable provision of Federal or State law.
``(b) No Liability for Blocking or Refusing to Honor Certain
Transactions.--
``(1) In general.--A financial transaction provider that
takes an action described in paragraph (2) with respect to a
transaction shall not be liable to any party for that action if
the financial transaction provider takes the action because the
originator of the transaction or a party to the transaction
is--
``(A) a person or entity that is included in the
list of unlicensed Internet gambling enterprises
required by section 5369(a);
``(B) a person or entity that the financial
transaction provider reasonably believes is included in
that list;
``(C) a person or entity that is included in a list
of unlicensed Internet gambling enterprises made
available to the financial transaction provider by the
Secretary under section 5369(a)(3);
``(D) a person or entity that the financial
transaction provider reasonably believes is included in
a list described in subparagraph (C);
``(E) a person or entity that is demonstrated to be
an unlicensed Internet gambling enterprise based on
information, other than a list described in
subparagraph (C), that is made available to the
financial transaction provider; or
``(F) a person or entity that the financial
transaction provider reasonably believes is
demonstrated to be an unlicensed Internet gambling
enterprise based on information described in
subparagraph (E).
``(2) Actions described.--A financial transaction provider
takes an action described in this paragraph if the financial
transaction provider--
``(A) identifies and blocks a transaction;
``(B) prevents or prohibits the acceptance of its
products or service in connection with a transaction or
otherwise refuses to honor a transaction; or
``(C) closes an account or ends a financial
relationship.''.
(b) Clerical Amendment.--The table of sections for chapter 53 of
title 31, United States Code, is amended by adding at the end the
following:
``5368. Liability of financial transaction providers.''.
(c) Technical Correction.--Section 5362(11)(B)(i) of title 31,
United States Code, is amended by striking ``section 903(6)(E)'' and
inserting ``section 903(7)(E)''.
SEC. 202. LIST OF UNLICENSED INTERNET GAMBLING ENTERPRISES.
(a) In General.--Subchapter IV of chapter 53 of title 31, United
States Code, as amended by section 201(a), is further amended by adding
at the end the following:
``Sec. 5369. List of unlicensed Internet gambling enterprises
``(a) List of Unlicensed Internet Gambling Enterprises.--
``(1) In general.--The Director shall--
``(A) identify unlicensed Internet gambling
enterprises in accordance with the procedures described
in subsection (b);
``(B) not later than 120 days after the date of the
enactment of the Internet Gambling Prohibition, Poker
Consumer Protection, and Strengthening UIGEA Act of
2011, submit to the Secretary a list of unlicensed
Internet gambling enterprises that includes the
information described in paragraph (2); and
``(C) not less frequently than every 60 days
thereafter, submit to the Secretary an updated list
that reflects the results of subsequent investigations
carried out under this section.
``(2) Information required.--The information described in
this paragraph is, with respect to each unlicensed Internet
gambling enterprise included on the list required by paragraph
(1), the following:
``(A) All known Internet Web site addresses of the
enterprise.
``(B) The name of any person who controls,
finances, manages, supervises, directs, or owns all or
part of the enterprise (as such terms are used in
section 1955 of title 18).
``(C) To the extent known, information identifying
the financial agents and account numbers of the
enterprise and the persons described in subparagraph
(B).
``(3) Distribution of list.--Not later than 10 days after
receiving the list or an updated version of the list required
by paragraph (1) from the Director, the Secretary shall--
``(A) post the information provided under
subparagraphs (A) and (B) of paragraph (2) on the
Internet Web site of the Department of the Treasury;
and
``(B) provide to each person that is required to
comply with the regulations prescribed pursuant to
section 5364 a copy of the information included with
the list required by paragraph (1) in an electronic
format compatible with the list of Specially Designated
Nationals and Blocked Persons maintained by the Office
of Foreign Assets Control.
``(b) Procedures for Identifying Unlicensed Internet Gambling
Enterprises.--
``(1) Investigations.--
``(A) Initial investigation.--Not later than the
date that is 60 days after the date of the enactment of
the Interne Gambling Prohibition, Poker Consumer
Protection, and Strengthening UIGEA Act of 2011, the
Director shall complete an initial investigation of
entities that appear to be unlicensed Internet gambling
enterprises.
``(B) Subsequent investigations.--After completing
the initial investigation required by subparagraph (A),
the Director shall regularly investigate entities that
appear to be unlicensed Internet gambling enterprises.
``(2) Requests.--
``(A) In general.--Any Federal, State, tribal, or
local law enforcement official, any affected sports
organization, any person directly harmed by unlicensed
Internet gaming, any financial transaction provider,
and any interactive computer service shall have the
right, but not the obligation, to make a written
request to the Director for the addition of any person
to the list of unlicensed Internet gambling enterprises
required by subsection (a).
``(B) Determinations; notice to person that
submitted a request.--Not later than 30 days after
receiving a request under subparagraph (A), the
Director shall--
``(i) determine if the request contains
information sufficient to constitute a prima
facie case that an entity is an unlicensed
Internet gambling enterprise; and
``(ii) notify the person that submitted the
request of the determination of the Director.
``(3) Notice.--Not later than 30 days before including a
person in the list of unlicensed Internet gambling enterprises
required by subsection (a), the Director shall provide written
notice to the person of the determination of the Director to
include the person in the list.
``(4) Opportunity to contest.--
``(A) In general.--A person that receives notice
under paragraph (3) that the Director has determined to
include the person in the list of unlicensed Internet
gambling enterprises required by subsection (a) may,
not later than 30 days after receiving the notice,
contest the determination--
``(i) by submitting a written appeal to the
Director; and
``(ii) by agreeing in the written appeal to
submit to the jurisdiction of the United
States.
``(B) Effect of not contesting.--If a person
described in subparagraph (A) does not contest the
determination of the Director to include the person in
the list of unlicensed Internet gambling enterprises
required by subsection (a) in accordance with
subparagraph (A), the Director shall include the person
in the list.
``(5) Opportunity for hearing.--The Director--
``(A) may not include a person that submits a
written appeal pursuant to paragraph (4) in the list of
unlicensed Internet gambling enterprises required by
subsection (a) until the Director provides the person
with an opportunity for a hearing; and
``(B) shall provide the person the opportunity for
a hearing not later than 30 days after receiving the
written appeal from the person.
``(6) Determinations after hearing.--Not later than 10 days
after the date of a hearing provided for a person under
paragraph (5) (without regard to whether the person appears at
the hearing), the Director shall--
``(A) determine if the person should be included in
the list of unlicensed Internet gambling enterprises
required by subsection (a); and
``(B) if the Director determines that the person
should be included in the list, add the person to the
list.
``(7) Injunctive relief.--
``(A) In general.--A person described in
subparagraph (B) may petition for injunctive relief in
the United States District Court for the District of
Columbia, which shall have exclusive jurisdiction to
hear cases arising under this section.
``(B) Person described.--A person described in this
subparagraph is a person that the Director determines
to include in the list of unlicensed Internet gambling
enterprises required by subsection (a)--
``(i) after the person appears at a hearing
described in paragraph (5); or
``(ii) that did not receive the notice
required by paragraph (3).
``(C) Burden of proof.--The petitioner shall have
the burden of establishing that the person should not
be included in the list of unlicensed Internet gambling
enterprises required by subsection (a).
``(D) Standing.--Only persons that the Director
determines to include in the list of unlicensed
Internet gambling enterprises required by subsection
(a) and owners or operators of such enterprises shall
have standing to contest the determination of the
Director.
``(E) Available relief.--The court may direct the
Director and the Secretary not to add, or to remove,
the petitioner from the list of unlicensed Internet
gambling enterprises.
``(F) Unavailability of other remedies.--There
shall be no judicial review of a determination under
this section other than pursuant to this paragraph.
``(c) Effect of List.--A financial transaction provider shall be
deemed to have actual knowledge that a person or entity is an
unlicensed Internet gambling enterprise if--
``(1) the person or entity is included in the list of
unlicensed Internet gambling enterprises required by subsection
(a); or
``(2)(A) the person or entity is included in a list of
unlicensed Internet gambling enterprises made available to the
financial transaction provider by the Secretary under
subsection (a)(3); and
``(B) information in addition to the list described in
subparagraph (A) is available to the financial transaction
provider that demonstrates that the person or entity is an
unlicensed Internet gambling enterprise.
``(d) Definitions.--In this section:
``(1) Director.--The term `Director' means the Director of
the Financial Crimes Enforcement Network appointed under
section 310(b).
``(2) Sports organization.--The term `sports organization'
means an amateur sports organization or a professional sports
organization (as those terms are defined in section 3701 of
title 28).
``(3) Unlicensed internet gambling enterprise.--The term
`unlicensed Internet gambling enterprise' means any person who,
on or after the date of the enactment of the Internet Gambling
Prohibition, Poker Consumer Protection, and Strengthening UIGEA
Act of 2011--
``(A) violates a provision of section 5363;
``(B) knowingly assists a person in conduct
described in subparagraph (A).''.
(b) Clerical Amendment.--The table of sections at the beginning of
such chapter 53, as amended by section 201(b), is further amended by
adding at the end the following:
``5369. Unlicensed Internet gambling enterprises.''.
SEC. 203. REGULATIONS.
(a) Regulations.--Not later than 180 days after the date of the
enactment of this Act, the Secretary of the Treasury shall--
(1) prescribe regulations to carry out sections 5368 and
5369 of title 31, United States Code, as added by sections
201(a) and 202(a), and publish such regulations in final form
in the Federal Register; and
(2) prescribe such regulations as the Secretary of the
Treasury considers necessary to ensure compliance with chapter
2 of title I of Public Law 91-508 (12 U.S.C. 1951 et seq.) and
subchapter II of chapter 53 of title 31, United States Code
(commonly known, collectively, as the ``Bank Secrecy Act''), by
licensees, significant vendors to such licensees, and financial
service providers to such licensees (as such terms are defined
in section 102).
(b) Exclusion of Board of Governors of the Federal Reserve System
From Requirement To Prescribe Regulations Concerning Prevention of
Restricted Transactions.--Subsection (a) of section 5364 of title 31,
United States Code, is amended by striking ``Before the end of the 270-
day period beginning on the date of the enactment of this subchapter,
the Secretary and the Board of Governors of the Federal Reserve System,
in consultation with the Attorney General, shall prescribe regulations
(which the Secretary and the Board jointly determine to be
appropriate)'' and inserting ``The Secretary shall prescribe
regulations''.
(c) Temporary Suspension of Certain Regulations.--
(1) In general.--Subject to paragraph (2), during the
period beginning on the date of the enactment of this Act and
ending on the date set forth in subsection (d), part 233 of
title 12, Code of Federal Regulations, and part 132 of title
31, Code of Federal Regulations, shall have no force or effect
to the extent that those regulations require or impose any
obligation that is inconsistent with the provisions of title I.
(2) Previous violation.--Paragraph (1) shall not apply with
respect to any violation of a regulation described in such
paragraph that occurred before the date of the enactment of
this Act.
(d) Revision of Regulations.--Not later than 180 days after the
date of the enactment of this Act, the Secretary of the Treasury shall
revise part 233 of title 12, Code of Federal Regulations, and part 132
of title 31, Code of Federal Regulations, to conform with the
provisions of title I.
(e) Annual Report.--Not later than 1 year after the date on which
the Secretary of the Treasury prescribes regulations under this
section, and annually thereafter, the Secretary shall submit to
Congress a report on the list required by section 5369(a) of title 31,
United States Code, as added by section 202(a), including the
following:
(1) The size of the list.
(2) The number of persons and Web sites added to and
removed from the list.
(3) The number and description of challenges to inclusion
on the list and a description of how such challenges were
resolved.
SEC. 204. CONFORMING AMENDMENTS.
(a) Duties and Powers of the Director of the Financial Crimes
Enforcement Network.--Section 310(b)(2)(I) of title 31, United States
Code, is amended by striking ``subchapter II'' and inserting
``subchapters II and IV''.
(b) Exclusion of Licensed Internet Poker Facility Operations From
Definition of Unlawful Internet Gambling Enterprise.--Section 5362(10)
of such title is amended--
(1) in subparagraph (D), by striking clause (iii);
(2) by redesignating subparagraph (E) as subparagraph (F);
and
(3) by inserting after subparagraph (D) the following:
``(E) Licensed internet poker facilities.--The term
`unlawful Internet gambling' does not include an
activity carried out by an Internet poker facility, as
such term is defined in section 102 of the Internet
Gambling Prohibition, Poker Consumer Protection, and
Strengthening UIGEA Act of 2011, operated by a person
under a license provided under title I of such Act in
accordance with the provisions of such title.''.
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