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109th Congress                                            Rept. 109-552
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 1

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



 
                   INTERNET GAMBLING PROHIBITION ACT

                                _______
                                

                 July 10, 2006.--Ordered to be printed

                                _______
                                

 Mr. Sensenbrenner, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 4777]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 4777) to amend title 18, United States Code, to 
expand and modernize the prohibition against interstate 
gambling, and for other purposes, having considered the same, 
report favorably thereon with an amendment and recommend that 
the bill as amended do pass.
    The amendment is as follows:
    Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Internet Gambling Prohibition Act''.

SEC. 2. DEFINITIONS.

  Section 1081 of title 18, United States Code, is amended--
          (1) by designating the five undesignated paragraphs that 
        begin with ``The term'' as paragraphs (1) through (5), 
        respectively;
          (2) by amending paragraph (5), as so designated, to read as 
        follows:
          ``(5) The term `communication facility' means any and all 
        instrumentalities, personnel, and services (among other things, 
        the receipt, forwarding, or delivery of communications) used or 
        useful in the transmission of writings, signs, pictures, and 
        sounds of all kinds by aid of wire, cable, radio, or an 
        electromagnetic, photoelectronic or photooptical system, or 
        other like connection (whether fixed or mobile) between the 
        points of origin and reception of such transmission.''; and
          (3) by adding at the end the following:
          ``(6) The term `bets or wagers'--
                  ``(A) means the staking or risking by any person of 
                something of value upon the outcome of a contest of 
                others, a sporting event, or a game predominantly 
                subject to chance, upon an agreement or understanding 
                that the person or another person will receive 
                something of greater value than the amount staked or 
                risked in the event of a certain outcome;
                  ``(B) includes the purchase of a chance or 
                opportunity to win a lottery or other prize (which 
                opportunity to win is predominantly subject to chance); 
                and
                  ``(C) does not include--
                          ``(i) a bona fide business transaction 
                        governed by the securities laws (as that term 
                        is defined in section 3(a)(47) of the 
                        Securities Exchange Act of 1934 (15 U.S.C. 
                        78c(a)(47))) for the purchase or sale at a 
                        future date of securities (as that term is 
                        defined in section 3(a)(10) of the Securities 
                        Exchange Act of 1934 (15 U.S.C. 78c(a)(10)));
                          ``(ii) a transaction on or subject to the 
                        rules of a contract market designated pursuant 
                        to section 5 of the Commodity Exchange Act (7 
                        U.S.C. 7) or to any transaction subject to an 
                        exemption pursuant to section 4(c) of such Act;
                          ``(iii) any over-the-counter derivative 
                        instrument;
                          ``(iv) a contract of indemnity or guarantee;
                          ``(v) a contract for life, health, or 
                        accident insurance;
                          ``(vi) participation in any game or contest 
                        in which participants do not stake or risk 
                        anything of value other than--
                                  ``(I) personal efforts of the 
                                participants in playing the game or 
                                contest or obtaining access to the 
                                Internet; or
                                  ``(II) point or credits that the 
                                sponsor of the game or contest provides 
                                to participants free of charge and that 
                                can be used or redeemed only for 
                                participation in games or contests 
                                offered by the sponsor; or
                          ``(vii) participation in any simulation 
                        sports game or educational game or contest in 
                        which (if the game or contest involves a team 
                        or teams) all teams are fictional and no team 
                        is a member of an amateur or professional 
                        sports organization (as those terms are defined 
                        in section 3701 of title 28) and that meets the 
                        following conditions:
                                  ``(I) All prizes and awards offered 
                                to winning participants are established 
                                and made known to the participants in 
                                advance of the game or contest and 
                                their value is not determined by the 
                                number of participants or the amount of 
                                any fees paid by those participants.
                                  ``(II) All winning outcomes reflect 
                                the relative knowledge and skill of the 
                                participants and are determined 
                                predominantly by accumulated 
                                statistical results of the performance 
                                of individuals (athletes in the case of 
                                sports events) in multiple real-world 
                                sporting or other events.
                                  ``(III) No winning outcome is based--
                                          ``(aa) on the score, point-
                                        spread or any performance or 
                                        performances of any single 
                                        real-world team or any 
                                        combination of such teams; or
                                          ``(bb) solely on any single 
                                        performance of an individual 
                                        athlete in any single real-
                                        world sporting or other event.
          ``(7) The term `foreign jurisdiction' means a jurisdiction of 
        a foreign country or political subdivision thereof.
          ``(8) The term `gambling business' means a business of 
        betting or wagering;
          ``(9) The term `information assisting in the placing of bets 
        or wagers' means information knowingly transmitted by an 
        individual in a gambling business for use in placing, 
        receiving, making, or otherwise enabling or facilitating a bet 
        or wager and does not include--
                  ``(A) any posting or reporting of any educational 
                information on how to make a legal bet or wager or the 
                nature of betting or wagering, as long as such posting 
                or reporting does not solicit or provide information 
                for the purpose of facilitating or enabling the placing 
                or receipt of bets or wagers in a jurisdiction where 
                such betting is illegal; or
                  ``(B) advertising relating to betting or wagering in 
                a jurisdiction where such betting or wagering is legal, 
                as long as such advertising does not solicit or provide 
                information for the purpose of facilitating or enabling 
                the placing or receipt of bets or wagers in a 
                jurisdiction where such betting is illegal.
          ``(10) The term `person' includes a government (including any 
        governmental entity (as defined in section 3701(2) of title 
        28)).
          ``(11) The term `State' means a State of the United States, 
        the District of Columbia, or a commonwealth, territory, or 
        possession of the United States.
          ``(12) The terms `credit', `creditor', and `credit card' have 
        the meanings given such terms in section 103 of the Truth in 
        Lending Act.
          ``(13) The term `electronic fund transfer'--
                  ``(A) has the meaning given such term in section 903 
                of the Electronic Fund Transfer Act; or
                  ``(B) any fund transfer covered by Article 4A of the 
                Uniform Commercial Code, as in effect in any State.
          ``(14) The term `financial institution' has the meaning given 
        such term in section 903 of the Electronic Fund Transfer Act.
          ``(15) The term `insured depository institution'--
                  ``(A) has the same meaning as in section 3(c) of the 
                Federal Deposit Insurance Act; and
                  ``(B) includes any insured credit union (as defined 
                in section 101 of the Federal Credit Union Act).
          ``(16) The terms `money transmitting business' and `money 
        transmitting service' have the meanings given such terms in 
        section 5330(d) of title 31, United States Code.
          ``(17) The terms `own or control' and to be `owned or 
        controlled' have the same meanings as in section 2(a)(2) of the 
        Bank Holding Company Act of 1956.
          ``(18) The term `Secretary' means the Secretary of the 
        Treasury.
          ``(19) The term `Tribe' or `tribal' means an Indian tribe, as 
        defined under section 4(5) of the Indian Gaming Regulatory Act 
        of 1988.''.

SEC. 3. MODIFICATION OF EXISTING PROHIBITION.

  Section 1084 of title 18, United States Code, is amended to read as 
follows:

``Sec. 1084. Use of a communication facility to transmit bets or 
                    wagers; penalties

  ``(a) Except as otherwise provided in this section, whoever, being 
engaged in a gambling business, knowingly uses a communication 
facility--
          ``(1) for the transmission in interstate or foreign commerce, 
        within the special maritime and territorial jurisdiction of the 
        United States, or to or from any place outside the jurisdiction 
        of any nation with respect to any transmission to or from the 
        United States, of bets or wagers, or information assisting in 
        the placing of bets or wagers; or
          ``(2) for the transmission of a communication in interstate 
        or foreign commerce, within the special maritime and 
        territorial jurisdiction of the United States, or to or from 
        any place outside the jurisdiction of any nation with respect 
        to any transmission to or from the United States, which 
        entitles the recipient to receive money or credit as a result 
        of bets or wagers, or for information assisting in the placing 
        of bets or wagers;
shall be fined under this title or imprisoned not more than five years, 
or both.
  ``(b) Except as otherwise provided in this section, whoever, being 
engaged in a gambling business, knowingly accepts, in connection with 
the transmission of a communication in interstate or foreign commerce, 
within the special maritime and territorial jurisdiction of the United 
States, or to or from any place outside the jurisdiction of any nation 
with respect to any transmission to or from the United States of bets 
or wagers or information assisting in the placing of bets or wagers--
          ``(1) credit, or the proceeds of credit, extended to or on 
        behalf of another (including credit extended through the use of 
        a credit card);
          ``(2) an electronic fund transfer or funds transmitted by or 
        through a money transmitting business, or the proceeds of an 
        electronic fund transfer or money transmitting service, from or 
        on behalf of the other person;
          ``(3) any check, draft, or similar instrument which is drawn 
        by or on behalf of the other person and is drawn on or payable 
        through any financial institution; or
          ``(4) the proceeds of any other form of financial transaction 
        as the Secretary of the Treasury may prescribe by regulation 
        which involves a financial institution as a payor or financial 
        intermediary on behalf of or for the benefit of the other 
        person,
shall be fined under this title or imprisoned not more than five years, 
or both.
  ``(c) Nothing in this section prohibits--
          ``(1) the transmission of information assisting in the 
        placing of bets or wagers for use in news reporting if such 
        transmission does not solicit or provide information for the 
        purpose of facilitating or enabling the placing or receipt of 
        bets or wagers in a jurisdiction where such betting is illegal;
          ``(2) the transmission of information assisting in the 
        placing of bets or wagers from a State or foreign country where 
        such betting or wagering is permitted under Federal, State, 
        tribal, or local law into a State or foreign country in which 
        such betting on the same event is permitted under Federal, 
        State, tribal, or local law; or
          ``(3) the interstate transmission of information relating to 
        a State-specific lottery between a State or foreign country 
        where such betting or wagering is permitted under Federal, 
        State, tribal, or local law and an out-of-State data center for 
        the purposes of assisting in the operation of such State-
        specific lottery.
  ``(d) Nothing in this section prohibits the use of a communication 
facility for the transmission of bets or wagers or information 
assisting in the placing of bets or wagers, if--
          ``(1) at the time the transmission occurs, the individual or 
        entity placing the bets or wagers or information assisting in 
        the placing of bets or wagers, the gambling business, and any 
        facility or support service processing those bets or wagers is 
        physically located in the same State, and the State has a 
        secure and effective customer verification and age verification 
        system to assure compliance with age and residence 
        requirements, and for class II or class III gaming under the 
        Indian Gaming Regulatory Act, are physically located on Indian 
        lands within that State;
          ``(2) the State or Tribe has explicitly authorized such bets 
        and wagers;
          ``(3) the State has explicitly authorized and licensed the 
        operation of the gambling business, any facility processing the 
        bets and wagers, and the support service within its borders or 
        the Tribe has explicitly authorized and licensed the operation 
        of such gambling business, any facility processing the bets and 
        wagers, and the support service on Indian lands within its 
        jurisdiction;
          ``(4) with respect to class II or class III gaming, the game 
        is permitted under and conducted in accordance with the Indian 
        Gaming Regulatory Act;
          ``(5) with respect to class III gaming under the Indian 
        Gaming Regulatory Act, the game is authorized under, and is 
        conducted in accordance with, the respective Tribal-State 
        compact of the Tribe having jurisdiction over the Indian lands 
        where the individual or entity placing the bets or wagers or 
        information assisting in the placing of bets or wagers, the 
        gambling business, and any facility or support service 
        processing those bets or wagers are physically located; and
          ``(6) with respect to class III gaming under the Indian 
        Gaming Regulatory Act, each such Tribal-State compact expressly 
        provides that the game may be conducted using a communication 
        facility to transmit bets or wagers or information assisting in 
        the placing of bets or wagers.
  ``(e) Nothing in this section creates immunity from criminal 
prosecution under any laws of any State or Tribe.
  ``(f) Nothing in this section authorizes activity that is prohibited 
under chapter 178 of title 28, United States Code.
  ``(g) When any common carrier, subject to the jurisdiction of the 
Federal Communications Commission, is notified in writing by a Federal, 
State, tribal or local law enforcement agency, acting within its 
jurisdiction, that any communication facility furnished by it is being 
used or will be used by its subscriber for the purpose of transmitting 
or receiving gambling information, in interstate or foreign commerce, 
within the special maritime and territorial jurisdiction of the United 
States, or to or from any place outside the jurisdiction of any nation 
with respect to any transmission to or from the United States in 
violation of Federal, State, tribal or local law, it shall discontinue 
or refuse, the leasing, furnishing, or maintaining of such facility, 
after reasonable notice to the subscriber, but no damages, penalty or 
forfeiture, civil or criminal, shall be found against any common 
carrier for any act done in compliance with any notice received from a 
law enforcement agency. Nothing in this section shall be deemed to 
prejudice the right of any person affected thereby to secure an 
appropriate determination, as otherwise provided by law, in a Federal 
court or in a State, tribal, or local tribunal or agency, that such 
facility should not be discontinued or removed, or should be restored.
  ``(h)(1) A Federal, State, tribal, or local law enforcement agency, 
acting within its jurisdiction may, in a civil action, obtain 
injunctive or declaratory relief to restrain or prevent any person from 
paying or assisting in the payment of bets or wagers, or communicating 
information assisting in the placing of bets or wagers, in interstate 
or foreign commerce, within the special maritime and territorial 
jurisdiction of the United States, or to or from any place outside the 
jurisdiction of any nation with respect to any transmission to or from 
the United States in violation of Federal, State, tribal, or local law.
  ``(2) No damages, penalty, or forfeiture, civil or criminal, shall be 
found against any person or entity for any act done in compliance with 
any notice received from a law enforcement agency.
  ``(3) Relief granted under paragraph (1) against an interactive 
computer service (as defined in section 230(f) of the Communications 
Act of 1934) shall--
          ``(A) be limited to the removal of, or disabling of access 
        to, an online site violating this section, or a hypertext link 
        to an online site violating this section, that resides on a 
        computer server that such service controls or operates; except 
        this limitation shall not apply if the service is violating 
        this section or is in active concert with a person who is 
        violating this section and receives actual notice of the 
        relief;
          ``(B) be available only after notice to the interactive 
        computer service and an opportunity for the service to appear 
        are provided;
          ``(C) not impose any obligation on an interactive computer 
        service to monitor its service or to affirmatively seek facts 
        indicating activity violating this section;
          ``(D) specify the interactive computer service to which it 
        applies; and
          ``(E) specifically identify the location of the online site 
        or hypertext link to be removed or access to which is to be 
        disabled.''.

SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

  In addition to any other sums authorized to be appropriated for this 
purpose, there are authorized to be appropriated to the Department of 
Justice for each of fiscal years 2007 through 2010 $10,000,000 for 
investigations and prosecutions of violations of section 1084 of title 
18, United States Code.

SEC. 5. RULE OF CONSTRUCTION.

  Nothing in this Act may be construed to prohibit any activity that is 
allowed under Public Law 95-515 as amended (15 U.S.C. 3001 et seq.).

SEC. 6. SENSE OF CONGRESS.

  It is the sense of Congress that this Act does not change which 
activities related to horse racing may or may not be allowed under 
Federal law; section 5 is intended to address concerns that this Act 
could have the effect of changing the existing relationship between the 
Interstate Horseracing Act (15 U.S.C. 3001 et seq.), and other Federal 
statutes that were in effect at the time of this Act's consideration; 
this Act is not intended to change that relationship; and this Act is 
not intended to resolve any existing disagreements over how to 
interpret the relationship between the Interstate Horseracing Act and 
other Federal statutes.

SEC. 7. RULE OF CONSTRUCTION.

  Nothing in this Act may be construed to preempt State law prohibiting 
gambling.

                          Purpose and Summary

    H.R. 4777, the ``Internet Gambling Prohibition Act,'' is 
intended to clarify when the operation of a gambling business 
on the Internet is illegal. The primary Federal statute 
prohibiting gambling is the Interstate Wire Communications Act, 
(``Wire Act'') originally passed in 1961.\1\ However, this 
statute was written before the inception of the Internet and 
the use of wireless communication. As a result, the 
applicability of the Wire Act to Internet gambling has been the 
subject of considerable legal dispute. A focus of this 
contention is whether the Wire Act only applies to sports-
related betting, or whether it also covers casino-style 
gambling like online poker, blackjack and roulette.
---------------------------------------------------------------------------
    \1\ Pub. L. No. 87-216, codified at 18 U.S.C. Sec. 1084 (2000).
---------------------------------------------------------------------------
    H.R. 4777 clarifies that the Wire Act prohibits not only 
sports betting, but traditional forms of gambling such as 
online poker. The bill also brings the Wire Act up to date to 
reflect the advent of new technology, and extends its coverage 
to the Internet, and expands application to wireless 
technologies upon which Internet-based communications 
increasingly rely. Specifically, H.R. 4777: prohibits the 
transmission of electronic funds and other non-cash methods to 
pay for gambling bets; grants Federal, State and local law 
enforcement the ability to seek injunctions to prevent the 
transmission of those funds and more effectively enforce 
provisions of the Wire Act; and increases the penalties for all 
violations of the Wire Act from a maximum of two years to a 
maximum of five years in prison.

                Background and Need for the Legislation

    Although States generally regulate gambling, the Federal 
government has proscribed certain gambling activities. In 1961, 
Congress enacted the Wire Act, which prohibits any person who 
is ``engaged in the business of betting or wagering'' from 
``knowingly using a wire communication facility for the 
transmission in interstate or foreign commerce of bets or 
wagers, or information assisting in the placing of bets or 
wagers on any sporting event or contest.'' \2\ The Wire Act 
also grants State and local law enforcement agencies the power 
to direct a communication service provider (``common carrier'') 
to disconnect any persons who are using communication 
facilities to transmit gambling information. In a few specific 
instances Congress has also enacted Federal laws that permit 
gambling. For example, the ``Interstate Horseracing Act,'' \3\ 
was enacted in 1978, permitting interstate off-track wagers in 
specified circumstances. In 1988, Congress enacted the Indian 
Gaming Regulatory Act (``IGRA''), allowing casinos to be built 
on Indian reservations.\4\
---------------------------------------------------------------------------
    \2\ 18 U.S.C. Sec. 1084 (2000).
    \3\ Pub. L. 95-515, codified at 15 U.S.C. Sec. Sec. 3001-3007 
(2000).
    \4\ Pub. L. 100-497, codified at 25 U.S.C. Sec. 2701 (2000).
---------------------------------------------------------------------------
    Gambling on the Internet has become an extremely lucrative 
business. In recent years, industry revenue and the number of 
gambling websites have risen dramatically. In 1997 Internet 
gambling industry revenues were estimated to be $445 million; 
in 2001 those estimates grew to $1.6 billion a year.\5\ 
Internet gambling is now estimated to be a $12 billion 
industry, with approximately $6 billion coming from bettors 
based in the United States.\6\ It has been reported that there 
are as many as 2,300 gambling sites, offering everything from 
sports betting to blackjack and poker.\7\ Most of these virtual 
casinos are organized and operated from off-shore locations, 
where the websites operate free from both State and Federal 
interference.\8\
---------------------------------------------------------------------------
    \5\ CRS Report RS 21275, ``Internet Gambling: A Sketch of 
Legislative Proposals in the 107th Congress,'' (October 8, 2002).
    \6\ CRS Report RS 22418, ``Internet Gambling: Two approaches in the 
109th Congress,'' (April 3, 2006).
    \7\ Testimony of Rep. Bob Goodlatte, Subcommitte on Crime, 
Terrorism and Homeland Security, Legislative Hearing on H.R. 4777, 
(April 5, 2006).
    \8\ CRS Report RS 22418, ``Internet Gambling: Two approaches in the 
109th Congress,'' (April 3, 2006).
---------------------------------------------------------------------------
    The characteristics of Internet gambling are unique: online 
players can gamble 24 hours a day from home; children may play 
without sufficient age verification; and betting with a credit 
card can undercut a player's perception of the value of cash, 
leading to addiction, bankruptcy and crime. The anonymity of 
Internet gambling, and the fact that players are shielded from 
public scrutiny in the comfort of their homes are of particular 
concern as they relate to underage and or compulsive gamblers. 
In addition, the Department of Justice has testified that 
Internet gambling serves as a vehicle for organized crime 
syndicates to conduct illegal activity, including money 
laundering.\9\
---------------------------------------------------------------------------
    \9\ Testimony of Bruce Ohr, Subcommittee on Crime, Terrorism and 
Homeland Security, Legislative Hearing on H.R. 4777, April 5, 2006, and 
CRS Report RS 21487, ``Internet Gambling: A Sketch of Legislative 
Proposals in the 108th and 109th Congresses,'' (April 5, 2006).
---------------------------------------------------------------------------
    State attorneys general have been frustrated in their 
attempts to prevent Internet gambling in their respective 
States. Some have attempted to charge Internet gambling 
providers with violations of State consumer fraud laws, but 
jurisdictional issues and other problems have thwarted these 
efforts. Attorneys general report that citizens are often 
unaware that gambling on the Internet is illegal, even if those 
same persons are aware that their State of residence does not 
allow gaming.\10\
---------------------------------------------------------------------------
    \10\ CRS Report RS 21487, and House Report 107-591, Part 1.
---------------------------------------------------------------------------
    H.R. 4777 brings clarity and certainty to Federal law that 
operating an Internet gambling business is a violation of 
Federal law. However, the legislation does not supersede the 
traditional leadership roles of States in enforcing gambling 
laws within their borders. It addresses a growing problem that 
no single State can adequately address. Because of the uniquely 
interstate and international nature of the Internet, H.R. 4777 
is necessary, and provides the States and the Federal 
government with the tools needed to reduce the prevalence of 
Internet gambling--while providing additional tools to enforce 
these prohibitions.

                                Hearings

    The House Committee on the Judiciary's Subcommittee on 
Crime, Terrorism and Homeland Security held a legislative 
hearing on H.R. 4777 on April 5, 2006. Testifying before the 
Subcommittee were: (1) the Honorable Bob Goodlatte, 6th 
Congressional District of Virginia, Member of Congress; (2) Mr. 
Bruce Ohr, Chief, Organized Crime and Racketeering Section, 
DOJ; (3) Mr. John Kindt, Professor, University of Illinois; (4) 
Mr. Sam Vallandingham, Vice President, the First State Bank, 
West Virginia.

                        Committee Consideration

    On May 3, 2006, the House Committee on the Judiciary's 
Subcommittee on Crime, Terrorism and Homeland Security met in 
open session and ordered favorably reported the bill H.R. 4777 
without amendment, by a voice vote, a quorum being present. On 
May 25, 2006, the Committee on the Judiciary met in open 
session and ordered favorably reported the bill H.R. 4777 as 
amended by a recorded vote of 25 ayes to 11 nays, a quorum 
being present.

                         Vote of the Committee

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee notes that there 
were recorded votes during the Committee consideration of H.R. 
4777.
    1. An amendment to the amendment in the nature of a 
substitute was offered by Mr. Wexler to insert language 
exempting betting and wagering on parimutuel gambling 
activities, (e.g., dog racing and jai alai), authorized and 
licensed or regulated by the state in which the bet or wager is 
received. The amendment was defeated by a rollcall vote of 15 
ayes to 21 nays.
    Subject: Wexler Amendment to the Goodlatte Amendment in the 
Nature of a Substitute to H.R. 4777, which was not agreed to by 
a rollcall vote of 15 ayes to 21 nays.

                   ROLLCALL NO. 1--DATE: MAY 25, 2006
------------------------------------------------------------------------
                                            Ayes       Nays     Present
------------------------------------------------------------------------
Mr. Hyde...............................
Mr. Coble..............................         X
Mr. Smith..............................                    X
Mr. Gallegly...........................                    X
Mr. Goodlatte..........................                    X
Mr. Chabot.............................                    X
Mr. Lungren............................                    X
Mr. Jenkins............................                    X
Mr. Cannon.............................                    X
Mr. Bachus.............................                    X
Mr. Inglis.............................                    X
Mr. Hostettler.........................                    X
Mr. Green..............................                    X
Mr. Keller.............................                    X
Mr. Issa...............................                    X
Mr. Flake..............................
Mr. Pence..............................                    X
Mr. Forbes.............................                    X
Mr. King...............................                    X
Mr. Feeney.............................         X
Mr. Franks.............................                    X
Mr. Gohmert............................                    X
Mr. Conyers............................         X
Mr. Berman.............................         X
Mr. Boucher............................                    X
Mr. Nadler.............................
Mr. Scott..............................         X
Mr. Watt...............................         X
Ms. Lofgren............................         X
Ms. Jackson Lee........................         X
Ms. Waters.............................         X
Mr. Meehan.............................
Mr. Delahunt...........................         X
Mr. Wexler.............................         X
Mr. Weiner.............................         X
Mr. Schiff.............................         X
Ms. Sanchez............................         X
Mr. Van Hollen.........................                    X
Ms. Wasserman Schultz..................         X
Mr. Sensenbrenner, Chairman............                    X
------------------------------------------------------------------------
      TOTAL............................        15         21
------------------------------------------------------------------------

    2. An amendment to the amendment in the nature of a 
substitute was offered by Mr. Conyers, to insert language 
regarding residence and age-verification-systems, and the bet 
or wager to be placed and accepted in a state that authorizes 
such wagers. The amendment was defeated by a rollcall vote of 
14 ayes to 17 nays, and one Member voting present.
    Subject: Conyers Amendment to the Goodlatte Amendment in 
the Nature of a Substitute to H.R. 4777, which was not agreed 
to by a rollcall vote of 14 ayes, 17 nays, and 1 present.

                   ROLLCALL NO. 2--DATE: MAY 25, 2006
------------------------------------------------------------------------
                                            Ayes       Nays     Present
------------------------------------------------------------------------
Mr. Hyde...............................
Mr. Coble..............................                    X
Mr. Smith..............................                    X
Mr. Gallegly...........................
Mr. Goodlatte..........................                    X
Mr. Chabot.............................                    X
Mr. Lungren............................                    X
Mr. Jenkins............................                    X
Mr. Cannon.............................                    X
Mr. Bachus.............................
Mr. Inglis.............................                    X
Mr. Hostettler.........................                    X
Mr. Green..............................         X
Mr. Keller.............................                    X
Mr. Issa...............................                    X
Mr. Flake..............................
Mr. Pence..............................                    X
Mr. Forbes.............................                    X
Mr. King...............................                    X
Mr. Feeney.............................                    X
Mr. Franks.............................
Mr. Gohmert............................                               X
Mr. Conyers............................         X
Mr. Berman.............................         X
Mr. Boucher............................                    X
Mr. Nadler.............................
Mr. Scott..............................         X
Mr. Watt...............................         X
Ms. Lofgren............................         X
Ms. Jackson Lee........................
Ms. Waters.............................         X
Mr. Meehan.............................
Mr. Delahunt...........................         X
Mr. Wexler.............................         X
Mr. Weiner.............................         X
Mr. Schiff.............................         X
Ms. Sanchez............................         X
Mr. Van Hollen.........................         X
Ms. Wasserman Schultz..................         X
Mr. Sensenbrenner, Chairman............                    X
------------------------------------------------------------------------
      TOTAL............................        14         17          1
------------------------------------------------------------------------

    3. An amendment to the amendment in the nature of a 
substitute was offered by Mr. Scott to extend the criminal 
liability provisions of the bill to individuals. The amendment 
was defeated by a rollcall vote of 6 ayes to 30 nays.
    Subject: Scott Amendment to the Goodlatte Amendment in the 
Nature of a Substitute to H.R. 4777, which was not agreed to by 
a rollcall vote of 6 ayes to 30 nays.

                   ROLLCALL NO. 3--DATE: MAY 25, 2006
------------------------------------------------------------------------
                                            Ayes       Nays     Present
------------------------------------------------------------------------
Mr. Hyde...............................
Mr. Coble..............................                    X
Mr. Smith..............................                    X
Mr. Gallegly...........................                    X
Mr. Goodlatte..........................                    X
Mr. Chabot.............................                    X
Mr. Lungren............................                    X
Mr. Jenkins............................                    X
Mr. Cannon.............................                    X
Mr. Bachus.............................                    X
Mr. Inglis.............................                    X
Mr. Hostettler.........................                    X
Mr. Green..............................         X
Mr. Keller.............................                    X
Mr. Issa...............................                    X
Mr. Flake..............................
Mr. Pence..............................                    X
Mr. Forbes.............................                    X
Mr. King...............................                    X
Mr. Feeney.............................                    X
Mr. Franks.............................                    X
Mr. Gohmert............................         X
Mr. Conyers............................         X
Mr. Berman.............................         X
Mr. Boucher............................                    X
Mr. Nadler.............................
Mr. Scott..............................         X
Mr. Watt...............................                    X
Ms. Lofgren............................         X
Ms. Jackson Lee........................                    X
Ms. Waters.............................                    X
Mr. Meehan.............................
Mr. Delahunt...........................                    X
Mr. Wexler.............................                    X
Mr. Weiner.............................                    X
Mr. Schiff.............................                    X
Ms. Sanchez............................                    X
Mr. Van Hollen.........................                    X
Ms. Wasserman Schultz..................                    X
Mr. Sensenbrenner, Chairman............                    X
------------------------------------------------------------------------
      TOTAL............................         6         30
------------------------------------------------------------------------

    4. Final Passage. The motion to report favorably H.R. 4777, 
as amended by the amendment in the nature of a substitute 
offered by Mr. Goodlatte, Mr. Cannon, and Mr. Boucher, as 
amended, was agreed to by a rollcall vote of 25 ayes to 11 
nays.
    Subject: Motion to Favorably Report H.R. 4777 as an 
Amendment in the Nature of the Substitute, as amended, which 
was agreed to by a rollcall vote of 25 ayes to 11 nays.

                   ROLLCALL NO. 4--DATE: MAY 25, 2006
------------------------------------------------------------------------
                                            Ayes       Nays     Present
------------------------------------------------------------------------
Mr. Hyde...............................
Mr. Coble..............................         X
Mr. Smith..............................         X
Mr. Gallegly...........................         X
Mr. Goodlatte..........................         X
Mr. Chabot.............................         X
Mr. Lungren............................         X
Mr. Jenkins............................         X
Mr. Cannon.............................         X
Mr. Bachus.............................         X
Mr. Inglis.............................         X
Mr. Hostettler.........................         X
Mr. Green..............................         X
Mr. Keller.............................         X
Mr. Issa...............................         X
Mr. Flake..............................
Mr. Pence..............................         X
Mr. Forbes.............................         X
Mr. King...............................         X
Mr. Feeney.............................         X
Mr. Franks.............................         X
Mr. Gohmert............................         X
Mr. Conyers............................                    X
Mr. Berman.............................                    X
Mr. Boucher............................         X
Mr. Nadler.............................
Mr. Scott..............................                    X
Mr. Watt...............................                    X
Ms. Lofgren............................                    X
Ms. Jackson Lee........................                    X
Ms. Waters.............................         X
Mr. Meehan.............................
Mr. Delahunt...........................                    X
Mr. Wexler.............................                    X
Mr. Weiner.............................                    X
Mr. Schiff.............................                    X
Ms. Sanchez............................                    X
Mr. Van Hollen.........................         X
Ms. Wasserman Schultz..................         X
Mr. Sensenbrenner, Chairman............         X
------------------------------------------------------------------------
      TOTAL............................        25         11
------------------------------------------------------------------------

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 4777, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under the section 402 of the Congressional Budget Act of 
1974.

                                                     June 26, 2006.
Hon. F. James Sensenbrenner, Jr.,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4777, the Internet 
Gambling Prohibition Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark 
Grabowicz.
            Sincerely,
                                          Donald B. Marron,
                                                   Acting Director.
    Enclosure.

H.R. 4777--Internet Gambling Prohibition Act

    Summary: H.R. 4777 would broaden the coverage of the 
current laws against Internet gambling and would increase 
penalties for such offenses. The bill would authorize the 
appropriation of $10 million for each of fiscal years 2007 
through 2010 for the Department of Justice to investigate and 
prosecute violators of the bill's provisions.
    Assuming appropriation of the authorized amounts, CBO 
estimates that implementing the bill would cost $40 million 
over the 2007-2011 period. H.R. 4777 could affect direct 
spending and receipts, but we estimate that any such effects 
would be less than $500,000 annually.
    H.R. 4777 contains intergovernmental mandates as defined in 
the Unfunded Mandates Reform Act (UMRA), but CBO estimates that 
costs to state, local, and tribal governments, if any, would be 
small, and would not exceed the threshold established in UMRA 
($64 million in 2006, adjusted annually for inflation).
    H.R. 4777 would impose new private-sector mandates, as 
defined in UMRA, on certain gambling businesses that use 
wireless communication systems to transfer data, providers of 
Internet service, and individuals seeking damages against 
providers of Internet service who have taken actions required 
by certain law enforcement notices. Based on information from 
government and industry sources, CBO expects that the aggregate 
direct cost of complying with those mandates would fall below 
the annual threshold established by UMRA for private-sector 
mandates ($128 million in 2006, adjusted annually for 
inflation).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 4777 is shown in the following table. 
For this estimate, CBO assumes that the bill will be enacted by 
the beginning of fiscal year 2007. CBO assumes that the amounts 
authorized by the bill will be appropriated by the start of 
each fiscal year and that outlays will follow the historical 
rate of spending for similar activities. The costs of this 
legislation fall within budget function 750 (administration of 
justice).

------------------------------------------------------------------------
                                      By fiscal year, in millions of
                                                 dollars--
                                 ---------------------------------------
                                   2007    2008    2009    2010    2011
------------------------------------------------------------------------
              CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Authorization Level.............      10      10      10      10       0
Estimated Outlays...............       8      10      10      10       2
------------------------------------------------------------------------

    In addition to the costs shown in the table, enacting H.R. 
4777 could increase collections of civil and criminal fines for 
violations of the bill's provisions. CBO estimates that any 
additional collections would not be significant because of the 
relatively small number of additional cases likely to be 
affected. Civil fines are recorded as revenues. Criminal fines 
are recorded as revenues, deposited in the Crime Victims Fund, 
and subsequently spent without further appropriation.
    Estimated impact on State, local, and tribal governments: 
H.R. 4777 contains intergovernmental mandates as defined in 
UMRA because it would preempt the authority of states to 
regulate certain gambling activities within their borders, 
prohibit the sale by states of lottery tickets over the 
Internet, and require Internet Service Providers (ISPs)--some 
of which are governmental entities--to disable certain features 
when notified by law enforcement agencies. Most gaming 
activities conducted by tribal entities would not be affected.
    CBO estimates that the costs of complying with these 
mandates would be small for several reasons. First, several 
states--including Michigan and Missouri--have passed or are 
considering legislation that would make Internet gambling 
illegal under state law, limiting the effect of this 
legislation on those states. Second, no state currently sells 
lottery tickets over the Internet, so the federal prohibition 
would be unlikely to result in lost revenues over the next five 
years. Finally, based on information from the Department of 
Justice, CBO estimates that the number of public ISPs that 
would be required to act would be small. CBO estimates, 
therefore, that the net costs of these mandates to state, 
local, and tribal governments would not exceed the threshold 
established in UMRA ($64 million in 2006, adjusted annually for 
inflation).
    Estimated impact on the private sector: H.R. 4777 would 
impose new private-sector mandates, as defined in UMRA, on 
certain gambling businesses that use wireless communication 
systems to transfer data, providers of Internet service, and 
individuals seeking damages against providers of Internet 
service who have taken actions required by certain law 
enforcement notices. Based on information from government and 
industry sources, CBO expects that the aggregate direct cost of 
complying with those mandates would fall below the annual 
threshold established by UMRA for private-sector mandates ($128 
million in 2006, adjusted annually for inflation).

Gambling businesses and the use of communication facilities

    The bill would prohibit anyone engaged in a gambling 
business from knowingly using a communication facility for the 
transmission of bets or wagers, or for the transmission of a 
communication that entitles the recipient to receive money or 
credit as a result of bets or wagers when the transmission 
occurs in interstate or foreign commerce, within U.S. special 
maritime or territorial jurisdiction, or into or out of the 
United States. The prohibitions would apply to transmissions by 
wire, cable, radio, or an electromagnetic, photo-electronic or 
photo-optical system. The bill defines bets or wagers to 
include any contest in which participants stake or risk 
``something of value'' and the ``opportunity to win is 
predominantly subject to chance,'' including the purchase of a 
chance to win a lottery. Thus, the bill would prohibit persons 
engaged in a gambling business from conducting lotteries over 
the Internet. The prohibition would not apply to certain 
popular legal games that charge fees, including sports and 
educational contests.
    H.R. 4777 would have only a limited effect on the private 
sector because the Federal Interstate Wire Act (``Wire Act'') 
currently prohibits the use of wire communication facilities to 
place or receive bets or wagers or to transmit information that 
assists persons who place bets or wagers on sporting events and 
certain contests. The Wire Act applies to all wires and cables 
used to transmit information across state lines, including 
telephone lines, cable television systems, and the Internet, 
and effectively prohibits many forms of Internet gambling. 
Other federal statutes, such as racketeering laws, also apply 
to Internet gambling. It is not clear, however, that existing 
federal law prohibits all forms of Internet gambling.
    According to the National Gambling Impact Study Commission 
Report, no known privately operated Internet lotteries are 
located in the United States. Privately operated lotteries are 
generally illegal under state laws. Domestic lotteries are 
generally run by states and Indian tribes. Moreover, according 
to industry sources, almost all Internet gambling businesses 
operate outside of the United States and currently no viable 
gambling business uses the communication systems added under 
this bill. Therefore, CBO expects that the costs of this 
mandate would be minimal.

Interactive computer services

    The bill also would impose a mandate on interactive 
computer services commonly known as Internet Service Providers. 
H.R. 4777 would require ISPs to remove or disable access to a 
specific Internet site when notified by law enforcement 
agencies. Based on information from the Department of Justice, 
CBO estimates that the number of Internet service providers 
that would receive such notices would be low. In addition, 
according to industry sources, many ISPs currently remove or 
disable access when requested by law enforcement. Consequently, 
CBO estimates that the costs to ISPs of complying with this 
mandate would be small.
    In addition, the bill would prohibit a person from 
receiving any damages, penalty, or forfeiture in civil or 
criminal proceedings from a person or entity for any act done 
in compliance with any notice from a law enforcement agency 
pursuant to this bill. Because the bill would eliminate 
existing rights to seek compensation for damages caused by 
certain acts, it would impose a private-sector mandate. The 
direct cost of the mandate would be the forgone net value of 
awards and settlements in such claims. According to government 
and industry sources, no such lawsuits have been filed, and 
those sources expect that it is unlikely that there will be 
many such cases in the future. Consequently, CBO estimates that 
the direct cost of the mandate would be small relative to the 
annual threshold.
    Previous CBO estimates: On May 26, 2006, CBO transmitted a 
cost estimate for H.R. 4411, the Unlawful Internet Gambling 
Enforcement Act of 2006, as ordered reported by the House 
Committee on the Judiciary on May 25, 2006. The bill would 
impose a mandate by requiring the Secretary of the Treasury and 
the Board of Governors of the Federal Reserve System to 
prescribe regulations that would require financial institutions 
to identify and block restricted transactions in connection 
with unlawful gambling. CBO was not able to determine the 
direct cost of complying with the mandate because the 
regulations have not been prescribed.
    On March 30, 2006, CBO transmitted a cost estimate for H.R. 
4411 as ordered reported by the House Committee on Financial 
Services on March 15, 2006. Those two bills are virtually 
identical, the mandates are the same, and CBO estimated that 
implementing either version of H.R. 4411 would cost about $2 
million over the 2007-2011 period, assuming appropriation of 
the necessary amounts.
    Estimate prepared by: Federal Costs: Mark Grabowicz; Impact 
on State, Local, and Tribal Governments: Melissa Merrell; 
Impact on the Private Sector: Paige Piper/Bach.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, H.R. 
4777 is intended to reduce the flow of revenue to gambling 
businesses, and limit the devastating effect Internet gambling 
has on our nation's youth and on compulsive gamblers. The bill 
will also provide Federal, State, local and tribal law 
enforcement with additional tools to investigate effectively 
and prosecute Internet gambling and criminal activity.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in art. I, Sec. 8 of the Constitution.

               Section-by-Section Analysis and Discussion


Section 1. Short title

    This section provides that the legislation may be cited as 
the ``Internet Gambling Prohibition Act.''

Section 2. Definitions

    This section amends the definitions of the Wire Act, 
including adding a definition for ``communication facility'' to 
make it clear that the Wire Act also applies to wireless 
communications, upon which Internet based communications 
increasingly rely.
    Defines ``bets and wagers'' to include bets for contests, 
sporting events or other games predominantly subject to chance, 
as well as purchasing lottery tickets. (Current law is 
ambiguous and many argue it applies only to sports-related 
betting). Expressly provides that ``bets and wagers'' do not 
include:
           Bona fide business transactions under the 
        securities laws;
           Transactions pursuant to the Commodity 
        Exchange Act;
           Over-the-counter derivative instruments;
           Contracts of indemnity or guarantee;
           Contracts for life, health, or accident 
        insurance;
           Certain reward programs or contests 
        conducted by businesses;
           Fantasy sports leagues.
    The Committee does not intend to outlaw on-line contests 
that award prizes to participants who predict the outcome of 
actual events, including sporting events, when there is no 
charge associated with participating in those contests, and 
nothing is staked by the participant to participate. Pursuant 
to 18 U.S.C. Sec. 1081(6), therefore, a free contest to 
determine who can most accurately predict the winners of events 
or contests would not be included in the term ``bets or 
wagers'' for purposes of this legislation since the participant 
is not wagering or paying anything to participate.
    It is the view of the Committee that the definition of 
``bets or wagers'' does not include information exchanged via 
private network if the information is used only to monitor 
gaming device play, display prize amounts, provide security 
information, and provide other accounting information. 
Furthermore, it is the view of the Committee that information 
exchanged via a linked progressive game accounting system that 
does not accept bets or wagers and that does not affect game 
outcome is not included in the definition of the term ``bets or 
wagers.''
    The Committee recognizes that some computer or video games 
played on the Internet are based on skill, and thus not 
intended to be included within the definition of ``bets or 
wagers.'' Also, such computer and video games, including those 
that feature real sports teams and/or teams that are members of 
amateur or professional sports organizations, do not involve 
the staking or risking by any person of something of value.
    Defines ``information assisting in the placing of bets or 
wagers'' as information knowingly transmitted by an individual 
in a gambling business for use in placing, receiving, making or 
otherwise enabling or facilitating a bet or wager. Specifically 
stipulates that ``information assisting in the placing of bets 
or wagers'' does not include:
    (a) Educational information about how to make a bet in 
jurisdictions where such bets are legal, as long as it does not 
solicit or provide info for the purpose of facilitating the 
placing or receipt of bets or wagers, or
    (b) Advertising relating to betting or wagering in a 
jurisdiction where such bets or wagers are legal, as it does 
not solicit or provide info for the purpose of facilitating the 
placing or receipt of bets or wagers.
    Defines ``gambling business'' as a business of betting or 
wagering.

Section 3. Modification of existing prohibitions

    This section only prohibits activities of a ``gambling 
business'', but does not criminalize the actions of the 
individual gambler. Specifically, the section:
    (a) Prohibits anyone engaged in a gambling business from 
using the Internet or other wire or wireless communications 
facilities to:
          1. Transmit bets or wagers or information assisting 
        in the placing of bets or wagers;
          2. Transmit a communication which entitles the 
        recipient to receive money or credit as a result of 
        bets or wagers, or for information assisting in the 
        placing of bets or wagers.
    This crime is punishable by fine and/or imprisonment for up 
to five years.
    (b) Prohibits anyone engaged in a gambling business from 
accepting (in connection with a transmission of a communication 
in interstate or foreign commerce):
          1. Credit, or the proceeds of credit, extended to or 
        on behalf of another;
          2. An electronic funds transfer or funds transmitted 
        by or through a money-transmitting business, or the 
        proceeds of such a transfer;
          3. A check, draft, or similar instrument;
          4. The proceeds of any other form of financial 
        transaction that the Secretary of Treasury may 
        prescribe.
    This crime is punishable by fine and/or imprisonment for up 
to five years.
    (c) Provides that the following interstate communications 
are not prohibited:
          1. Transmitting information assisting in the placing 
        of bets or wagers for use in news reporting in a 
        jurisdiction where the betting is illegal;
          2. Transmitting information assisting in the placing 
        of bets or wagers from a state or foreign country where 
        such betting is permitted by law into another state or 
        foreign country in which such betting on the same event 
        is permitted by law;
          3. Transmission of information related to a state-
        specific lottery, between a state or foreign country 
        where such betting is legal and an out-of-state data 
        center, for the purposes of assisting in the operation 
        of such state-specific lottery.
    (d) (States' rights/intra-state provision) Provides that 
the following is not prohibited:
    Using the Internet or other wire or wireless communications 
facilities to transmit bets or wagers or information assisting 
in the placing of bets or wagers if:
          1. The person or business placing the bets, the 
        gambling business, and any facility processing those 
        bets are located within the same state and the state 
        has an effective resident and age verification system 
        in place (and if the gambling is under the Indian 
        Gaming Regulatory Act [IGRA], then they must be 
        physically located on Indian lands within that state);
          2. The state or tribe has explicitly authorized such 
        bets or wagers;
          3. The state or tribe has explicitly authorized and 
        licensed, the operation of the gambling business, and 
        any facility processing the bets and wagers and support 
        service within its borders;
          4. For class II or class III gaming, the game is 
        permitted and controlled under IGRA;
          5. For class III gaming, the game is authorized under 
        and conducted in accordance with, the respective 
        Tribal-State compact of the tribe with jurisdiction 
        over the lands where the individual or entity placing 
        the bets, the gambling business, and the processing 
        facility are physically located; and
          6. For class III gaming, each Tribal-State compact 
        expressly provides that the game may be conducted using 
        a communication facility to transmit bets or wagers, or 
        information assisting in the placing of bets or wagers.
    (e) Provides that nothing in this section creates immunity 
from criminal prosecution under any laws of any state or tribe.
    (f) Provides that nothing in this section authorizes 
anything prohibited by 28 U.S.C. 178, The Professional and 
Amateur Sports Protection.
    (g) Provides that when a common carrier is notified in 
writing that a communication facility furnished by it is being 
used to violate this Act, then it must discontinue service to 
the offender after reasonable notice to the subscriber is 
given. Further provides that no civil or criminal damages, 
penalty, or forfeiture shall be imposed on the common carrier 
for carrying out this provision. Stipulates that nothing in 
this section prevents the ability of an affected party to seek 
redress in court.
    (h) Provides that:
          1. Federal, State, tribal or local law enforcement 
        may obtain injunctive or declaratory relief to restrain 
        or prevent anyone from paying or assisting in the 
        payment of bets or wagers, or communicating information 
        assisting in the placing of bets and wagers in 
        violation of Federal, State, tribal or local law;
          2. No civil or criminal damages, penalty or 
        forfeiture shall be found against anyone for any act 
        done in compliance with any notice received from a law 
        enforcement agency;
          3. Any relief granted against an interactive computer 
        service must:
                  a. Be limited to the removal of, or disabling 
                access to, an offending online website or a 
                hypertext link to an offending online website 
                that resides on a computer server which that 
                service operates. However, this particular 
                limitation of liability does not apply when the 
                interactive computer service itself is 
                violating the Act or if it is acting in concert 
                with a violator and receives actual notice of 
                the relief;
                  b. Be available only after notice and an 
                opportunity to appear are provided to the 
                interactive computer service;
                  c. Not impose any obligation on the 
                interactive computer service to monitor its 
                service or affirmatively seek facts indicating 
                violating activity;
                  d. Specify the interactive computer service 
                to which it applies;
                  e. Specifically identify the offending 
                website's or hyperlink's location that must be 
                removed or disabled.

Section 4. Authorization of appropriations

    Authorizes, in addition to any other sums, $10,000,000 for 
each of the fiscal years 2007 through 2010, to the Department 
of Justice, to be used exclusively for investigations and 
prosecutions regarding Internet gambling.

Section 5. Rule of construction

    States that nothing in this Act may be construed to 
prohibit any activity that is allowed under the Interstate 
Horseracing Act.

Section 6. Sense of Congress

    This section makes it clear that this Act is neutral as it 
relates to the Interstate Horseracing Act, and does not change 
which activities related to horse racing may or may not be 
allowed under federal law.

Section 7. Rule of construction

    This section makes it clear that nothing in this Act may be 
construed to preempt state law prohibiting gambling.

         Changes in Existing Law Made by the Bill, as Reported

      In compliance with clause 3(e) of rule XIII of the Rules 
of the House of Representatives, changes in existing law made 
by the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

TITLE 18, UNITED STATES CODE

           *       *       *       *       *       *       *



PART I--CRIMES

           *       *       *       *       *       *       *


CHAPTER 50--GAMBLING

           *       *       *       *       *       *       *



Sec. 1081. Definitions

  As used in this chapter:
  (1) The term ``gambling ship'' means a vessel used 
principally for the operation of one or more gambling 
establishments. Such term does not include a vessel with 
respect to gambling aboard such vessel beyond the territorial 
waters of the United States during a covered voyage (as defined 
in section 4472 of the Internal Revenue Code of 1986 as in 
effect on January 1, 1994).
  (2) The term ``gambling establishment'' means any common 
gaming or gambling establishment operated for the purpose of 
gaming or gambling, including accepting, recording, or 
registering bets, or carrying on a policy game or any other 
lottery, or playing any game of chance, for money or other 
thing of value.
  (3) The term ``vessel'' includes every kind of water and air 
craft or other contrivance used or capable of being used as a 
means of transportation on water, or on water and in the air, 
as well as any ship, boat, barge, or other water craft or any 
structure capable of floating on the water.
  (4) The term ``American vessel'' means any vessel documented 
or numbered under the laws of the United States; and includes 
any vessel which is neither documented or numbered under the 
laws of the United States nor documented under the laws of any 
foreign country, if such vessel is owned by, chartered to, or 
otherwise controlled by one or more citizens or residents of 
the United States or corporations organized under the laws of 
the United States or of any State.
  [The term ``wire communication facility'' means any and all 
instrumentalities, personnel, and services (among other things, 
the receipt, forwarding, or delivery of communications) used or 
useful in the transmission of writings, signs, pictures, and 
sounds of all kinds by aid of wire, cable, or other like 
connection between the points of origin and reception of such 
transmission.]
          (5) The term ``communication facility'' means any and 
        all instrumentalities, personnel, and services (among 
        other things, the receipt, forwarding, or delivery of 
        communications) used or useful in the transmission of 
        writings, signs, pictures, and sounds of all kinds by 
        aid of wire, cable, radio, or an electromagnetic, 
        photoelectronic or photooptical system, or other like 
        connection (whether fixed or mobile) between the points 
        of origin and reception of such transmission.
          (6) The term ``bets or wagers''--
                  (A) means the staking or risking by any 
                person of something of value upon the outcome 
                of a contest of others, a sporting event, or a 
                game predominantly subject to chance, upon an 
                agreement or understanding that the person or 
                another person will receive something of 
                greater value than the amount staked or risked 
                in the event of a certain outcome;
                  (B) includes the purchase of a chance or 
                opportunity to win a lottery or other prize 
                (which opportunity to win is predominantly 
                subject to chance); and
                  (C) does not include--
                          (i) a bona fide business transaction 
                        governed by the securities laws (as 
                        that term is defined in section 
                        3(a)(47) of the Securities Exchange Act 
                        of 1934 (15 U.S.C. 78c(a)(47))) for the 
                        purchase or sale at a future date of 
                        securities (as that term is defined in 
                        section 3(a)(10) of the Securities 
                        Exchange Act of 1934 (15 U.S.C. 
                        78c(a)(10)));
                          (ii) a transaction on or subject to 
                        the rules of a contract market 
                        designated pursuant to section 5 of the 
                        Commodity Exchange Act (7 U.S.C. 7) or 
                        to any transaction subject to an 
                        exemption pursuant to section 4(c) of 
                        such Act;
                          (iii) any over-the-counter derivative 
                        instrument;
                          (iv) a contract of indemnity or 
                        guarantee;
                          (v) a contract for life, health, or 
                        accident insurance;
                          (vi) participation in any game or 
                        contest in which participants do not 
                        stake or risk anything of value other 
                        than--
                                  (I) personal efforts of the 
                                participants in playing the 
                                game or contest or obtaining 
                                access to the Internet; or
                                  (II) point or credits that 
                                the sponsor of the game or 
                                contest provides to 
                                participants free of charge and 
                                that can be used or redeemed 
                                only for participation in games 
                                or contests offered by the 
                                sponsor; or
                          (vii) participation in any simulation 
                        sports game or educational game or 
                        contest in which (if the game or 
                        contest involves a team or teams) all 
                        teams are fictional and no team is a 
                        member of an amateur or professional 
                        sports organization (as those terms are 
                        defined in section 3701 of title 28) 
                        and that meets the following 
                        conditions:
                                  (I) All prizes and awards 
                                offered to winning participants 
                                are established and made known 
                                to the participants in advance 
                                of the game or contest and 
                                their value is not determined 
                                by the number of participants 
                                or the amount of any fees paid 
                                by those participants.
                                  (II) All winning outcomes 
                                reflect the relative knowledge 
                                and skill of the participants 
                                and are determined 
                                predominantly by accumulated 
                                statistical results of the 
                                performance of individuals 
                                (athletes in the case of sports 
                                events) in multiple real-world 
                                sporting or other events.
                                  (III) No winning outcome is 
                                based--(aa) on the score, 
                                point-spread or any performance 
                                or performances of any single 
                                real-world team or any 
                                combination of such teams; 
                                or(bb) solely on any single 
                                performance of an individual 
                                athlete in any single real-
                                world sporting or other event.
          (7) The term ``foreign jurisdiction'' means a 
        jurisdiction of a foreign country or political 
        subdivision thereof.
          (8) The term ``gambling business'' means a business 
        of betting or wagering;
          (9) The term ``information assisting in the placing 
        of bets or wagers'' means information knowingly 
        transmitted by an individual in a gambling business for 
        use in placing, receiving, making, or otherwise 
        enabling or facilitating a bet or wager and does not 
        include--
                  (A) any posting or reporting of any 
                educational information on how to make a legal 
                bet or wager or the nature of betting or 
                wagering, as long as such posting or reporting 
                does not solicit or provide information for the 
                purpose of facilitating or enabling the placing 
                or receipt of bets or wagers in a jurisdiction 
                where such betting is illegal; or
                  (B) advertising relating to betting or 
                wagering in a jurisdiction where such betting 
                or wagering is legal, as long as such 
                advertising does not solicit or provide 
                information for the purpose of facilitating or 
                enabling the placing or receipt of bets or 
                wagers in a jurisdiction where such betting is 
                illegal.
          (10) The term ``person'' includes a government 
        (including any governmental entity (as defined in 
        section 3701(2) of title 28)).
          (11) The term ``State'' means a State of the United 
        States, the District of Columbia, or a commonwealth, 
        territory, or possession of the United States.
          (12) The terms ``credit'', ``creditor'', and ``credit 
        card'' have the meanings given such terms in section 
        103 of the Truth in Lending Act.
          (13) The term ``electronic fund transfer''--
                  (A) has the meaning given such term in 
                section 903 of the Electronic Fund Transfer 
                Act; or
                  (B) any fund transfer covered by Article 4A 
                of the Uniform Commercial Code, as in effect in 
                any State.
          (14) The term ``financial institution'' has the 
        meaning given such term in section 903 of the 
        Electronic Fund Transfer Act.
          (15) The term ``insured depository institution''--
                  (A) has the same meaning as in section 3(c) 
                of the Federal Deposit Insurance Act; and
                  (B) includes any insured credit union (as 
                defined in section 101 of the Federal Credit 
                Union Act).
          (16) The terms ``money transmitting business'' and 
        ``money transmitting service'' have the meanings given 
        such terms in section 5330(d) of title 31, United 
        States Code.
          (17) The terms ``own or control'' and to be ``owned 
        or controlled'' have the same meanings as in section 
        2(a)(2) of the Bank Holding Company Act of 1956.
          (18) The term ``Secretary'' means the Secretary of 
        the Treasury.
          (19) The term ``Tribe'' or ``tribal'' means an Indian 
        tribe, as defined under section 4(5) of the Indian 
        Gaming Regulatory Act of 1988.

           *       *       *       *       *       *       *


[Sec. 1084. Transmission of wagering information; penalties

  [(a) Whoever being engaged in the business of betting or 
wagering knowingly uses a wire communication facility for the 
transmission in interstate or foreign commerce of bets or 
wagers or information assisting in the placing of bets or 
wagers on any sporting event or contest, or for the 
transmission of a wire communication which entitles the 
recipient to receive money or credit as a result of bets or 
wagers, or for information assisting in the placing of bets or 
wagers, shall be fined under this title or imprisoned not more 
than two years, or both.
  [(b) Nothing in this section shall be construed to prevent 
the transmission in interstate or foreign commerce of 
information for use in news reporting of sporting events or 
contests, or for the transmission of information assisting in 
the placing of bets or wagers on a sporting event or contest 
from a State or foreign country where betting on that sporting 
event or contest is legal into a State or foreign country in 
which such betting is legal.
  [(c) Nothing contained in this section shall create immunity 
from criminal prosecution under any laws of any State.
  [(d) When any common carrier, subject to the jurisdiction of 
the Federal Communications Commission, is notified in writing 
by a Federal, State, or local law enforcement agency, acting 
within its jurisdiction, that any facility furnished by it is 
being used or will be used for the purpose of transmitting or 
receiving gambling information in interstate or foreign 
commerce in violation of Federal, State or local law, it shall 
discontinue or refuse, the leasing, furnishing, or maintaining 
of such facility, after reasonable notice to the subscriber, 
but no damages, penalty or forfeiture, civil or criminal, shall 
be found against any common carrier for any act done in 
compliance with any notice received from a law enforcement 
agency. Nothing in this section shall be deemed to prejudice 
the right of any person affected thereby to secure an 
appropriate determination, as otherwise provided by law, in a 
Federal court or in a State or local tribunal or agency, that 
such facility should not be discontinued or removed, or should 
be restored.
  [(e) As used in this section, the term ``State'' means a 
State of the United States, the District of Columbia, the 
Commonwealth of Puerto Rico, or a commonwealth, territory or 
possession of the United States.]

Sec. 1084. Use of a communication facility to transmit bets or wagers; 
                    penalties

  (a) Except as otherwise provided in this section, whoever, 
being engaged in a gambling business, knowingly uses a 
communication facility--
          (1) for the transmission in interstate or foreign 
        commerce, within the special maritime and territorial 
        jurisdiction of the United States, or to or from any 
        place outside the jurisdiction of any nation with 
        respect to any transmission to or from the United 
        States, of bets or wagers, or information assisting in 
        the placing of bets or wagers; or
          (2) for the transmission of a communication in 
        interstate or foreign commerce, within the special 
        maritime and territorial jurisdiction of the United 
        States, or to or from any place outside the 
        jurisdiction of any nation with respect to any 
        transmission to or from the United States, which 
        entitles the recipient to receive money or credit as a 
        result of bets or wagers, or for information assisting 
        in the placing of bets or wagers;
shall be fined under this title or imprisoned not more than 
five years, or both.
  (b) Except as otherwise provided in this section, whoever, 
being engaged in a gambling business, knowingly accepts, in 
connection with the transmission of a communication in 
interstate or foreign commerce, within the special maritime and 
territorial jurisdiction of the United States, or to or from 
any place outside the jurisdiction of any nation with respect 
to any transmission to or from the United States of bets or 
wagers or information assisting in the placing of bets or 
wagers--
          (1) credit, or the proceeds of credit, extended to or 
        on behalf of another (including credit extended through 
        the use of a credit card);
          (2) an electronic fund transfer or funds transmitted 
        by or through a money transmitting business, or the 
        proceeds of an electronic fund transfer or money 
        transmitting service, from or on behalf of the other 
        person;
          (3) any check, draft, or similar instrument which is 
        drawn by or on behalf of the other person and is drawn 
        on or payable through any financial institution; or
          (4) the proceeds of any other form of financial 
        transaction as the Secretary of the Treasury may 
        prescribe by regulation which involves a financial 
        institution as a payor or financial intermediary on 
        behalf of or for the benefit of the other person,
shall be fined under this title or imprisoned not more than 
five years, or both.
  (c) Nothing in this section prohibits--
          (1) the transmission of information assisting in the 
        placing of bets or wagers for use in news reporting if 
        such transmission does not solicit or provide 
        information for the purpose of facilitating or enabling 
        the placing or receipt of bets or wagers in a 
        jurisdiction where such betting is illegal;
          (2) the transmission of information assisting in the 
        placing of bets or wagers from a State or foreign 
        country where such betting or wagering is permitted 
        under Federal, State, tribal, or local law into a State 
        or foreign country in which such betting on the same 
        event is permitted under Federal, State, tribal, or 
        local law; or
          (3) the interstate transmission of information 
        relating to a State-specific lottery between a State or 
        foreign country where such betting or wagering is 
        permitted under Federal, State, tribal, or local law 
        and an out-of-State data center for the purposes of 
        assisting in the operation of such State-specific 
        lottery.
  (d) Nothing in this section prohibits the use of a 
communication facility for the transmission of bets or wagers 
or information assisting in the placing of bets or wagers, if--
          (1) at the time the transmission occurs, the 
        individual or entity placing the bets or wagers or 
        information assisting in the placing of bets or wagers, 
        the gambling business, and any facility or support 
        service processing those bets or wagers is physically 
        located in the same State, and the State has a secure 
        and effective customer verification and age 
        verification system to assure compliance with age and 
        residence requirements, and for class II or class III 
        gaming under the Indian Gaming Regulatory Act, are 
        physically located on Indian lands within that State;
          (2) the State or Tribe has explicitly authorized such 
        bets and wagers;
          (3) the State has explicitly authorized and licensed 
        the operation of the gambling business, any facility 
        processing the bets and wagers, and the support service 
        within its borders or the Tribe has explicitly 
        authorized and licensed the operation of such gambling 
        business, any facility processing the bets and wagers, 
        and the support service on Indian lands within its 
        jurisdiction;
          (4) with respect to class II or class III gaming, the 
        game is permitted under and conducted in accordance 
        with the Indian Gaming Regulatory Act;
          (5) with respect to class III gaming under the Indian 
        Gaming Regulatory Act, the game is authorized under, 
        and is conducted in accordance with, the respective 
        Tribal-State compact of the Tribe having jurisdiction 
        over the Indian lands where the individual or entity 
        placing the bets or wagers or information assisting in 
        the placing of bets or wagers, the gambling business, 
        and any facility or support service processing those 
        bets or wagers are physically located; and
          (6) with respect to class III gaming under the Indian 
        Gaming Regulatory Act, each such Tribal-State compact 
        expressly provides that the game may be conducted using 
        a communication facility to transmit bets or wagers or 
        information assisting in the placing of bets or wagers.
  (e) Nothing in this section creates immunity from criminal 
prosecution under any laws of any State or Tribe.
  (f) Nothing in this section authorizes activity that is 
prohibited under chapter 178 of title 28, United States Code.
  (g) When any common carrier, subject to the jurisdiction of 
the Federal Communications Commission, is notified in writing 
by a Federal, State, tribal or local law enforcement agency, 
acting within its jurisdiction, that any communication facility 
furnished by it is being used or will be used by its subscriber 
for the purpose of transmitting or receiving gambling 
information, in interstate or foreign commerce, within the 
special maritime and territorial jurisdiction of the United 
States, or to or from any place outside the jurisdiction of any 
nation with respect to any transmission to or from the United 
States in violation of Federal, State, tribal or local law, it 
shall discontinue or refuse, the leasing, furnishing, or 
maintaining of such facility, after reasonable notice to the 
subscriber, but no damages, penalty or forfeiture, civil or 
criminal, shall be found against any common carrier for any act 
done in compliance with any notice received from a law 
enforcement agency. Nothing in this section shall be deemed to 
prejudice the right of any person affected thereby to secure an 
appropriate determination, as otherwise provided by law, in a 
Federal court or in a State, tribal, or local tribunal or 
agency, that such facility should not be discontinued or 
removed, or should be restored.
  (h)(1) A Federal, State, tribal, or local law enforcement 
agency, acting within its jurisdiction may, in a civil action, 
obtain injunctive or declaratory relief to restrain or prevent 
any person from paying or assisting in the payment of bets or 
wagers, or communicating information assisting in the placing 
of bets or wagers, in interstate or foreign commerce, within 
the special maritime and territorial jurisdiction of the United 
States, or to or from any place outside the jurisdiction of any 
nation with respect to any transmission to or from the United 
States in violation of Federal, State, tribal, or local law.
  (2) No damages, penalty, or forfeiture, civil or criminal, 
shall be found against any person or entity for any act done in 
compliance with any notice received from a law enforcement 
agency.
  (3) Relief granted under paragraph (1) against an interactive 
computer service (as defined in section 230(f) of the 
Communications Act of 1934) shall--
  (A) be limited to the removal of, or disabling of access to, 
an online site violating this section, or a hypertext link to 
an online site violating this section, that resides on a 
computer server that such service controls or operates; except 
this limitation shall not apply if the service is violating 
this section or is in active concert with a person who is 
violating this section and receives actual notice of the 
relief;
  (B) be available only after notice to the interactive 
computer service and an opportunity for the service to appear 
are provided;
  (C) not impose any obligation on an interactive computer 
service to monitor its service or to affirmatively seek facts 
indicating activity violating this section;
  (D) specify the interactive computer service to which it 
applies; and
  (E) specifically identify the location of the online site or 
hypertext link to be removed or access to which is to be 
disabled.

           *       *       *       *       *       *       *


                           Markup Transcript



                            BUSINESS MEETING

                         THURSDAY, MAY 25, 2006

                  House of Representatives,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:04 a.m., in 
Room 2141, Rayburn House Office Building, the Honorable F. 
James Sensenbrenner, Jr. (Chairman of the Committee) presiding.
    Chairman Sensenbrenner. The Committee will be in order. A 
working quorum is present.
    Before proceeding to today's legislative business, the 
Chair would like to announce that the Committee intends to 
publish a non-legislative report entitled ``Plane Clothes: Lack 
of Anonymity at the Federal Air Marshals Service Compromises 
Aviation and National Security.'' Rule VII of the Judiciary 
Committee Rules of Procedure requires that following the 
announcement to publish a non-legislative report, Members of 
the Committee shall be given at least 3 calendar days to file 
supplemental, additional, or dissenting views as a part of the 
report. Committee Members and their staff may obtain a copy of 
this draft report in the Committee's 2138 Rayburn Office. Views 
also should be submitted to that location no later than 5:00 
p.m. on Wednesday, May 31.
    Pursuant to notice, I now call up H.R. 4777, the ``Internet 
Gambling Prohibition Act.'' The Chair recognizes Mr. Coble, the 
Chairman of the Subcommittee on Crime, Terrorism, and Homeland 
Security, for a motion.
    The Chair recognizes the gentleman from North Carolina for 
a motion.
    Mr. Coble. Mr. Chairman, I move--the Subcommittee on Crime, 
Terrorism, and Homeland Security reports favorably H.R. 4777, 
the ``Internet Gambling Prohibition Act'' and moves its 
favorable recommendation to the full House.
    Chairman Sensenbrenner. Without objection, the bill will be 
considered as read and open for amendment at any point.
    [The bill, H.R. 4777, follows:]
      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


    Chairman Sensenbrenner. The Chair recognizes the gentleman 
from North Carolina to strike the last word.
    Mr. Coble. I thank the Chairman.
    On April 5, 2006, the Subcommittee held a legislative 
hearing on the bill. The hearing examined the problems 
associated with Internet Gambling, particularly as it relates 
to children, addictive gamblers, and organized crime. The 
Subcommittee was pleased to have four distinguished witnesses, 
including the primary sponsor of the bill, the distinguished 
gentleman from Virginia, Mr. Goodlatte.
    On May 3, 2006, Mr. Chairman, the Subcommittee favorably 
reported the bill without amendment. I want to take a moment 
and thank Mr. Goodlatte for his tireless effort on this matter, 
and I understand that Mr. Goodlatte would like to be heard, and 
I yield my time to him.
    Mr. Goodlatte. I thank the gentleman from North Carolina 
for yielding to me, and I'd like to thank him as the 
Subcommittee Chairman and Chairman Sensenbrenner for moving 
this legislation forward. This is an important piece of 
legislation that we have been working on for many years. It 
actually went through a hiatus for a few years until there was 
a revelation here in Washington of all of the measures that 
were taken by some lobbyists who were acting in a manner that 
was inconsistent with the truth to misrepresent what the 
legislation did.
    We are now bringing this legislation back again with very 
strong support. More than 140 cosponsors in the House are 
anxious to have the opportunity to expunge that smear on the 
House of Representatives that occurred based upon those 
activities of a number of years ago. The legislation is badly 
needed because during the time that has transpired, the amount 
of money going to these illegal, unregulated offshore 
enterprises has quadrupled to $12 billion a year, of which it's 
estimated about $6 billion is coming out of the United States.
    In the United States, gambling is essentially illegal 
unless regulated by the States. This is a measure to work 
through that to make sure that the States are indeed protected 
in their right to continue to regulate gambling. Some States, 
like the State of Utah, represented by the gentleman from Utah, 
Mr. Cannon, have no legal gambling enterprises. Other States 
choose to have a number of different types of enterprises. 
Forty-nine of the 50 States Attorney Generals have asked the 
Congress to act on this measure because the Wire Act, which is 
the Federal measure to enforce gambling place by electronic 
means is over 40 years out-of-date. It was passed in the 1960s, 
and today it does not adequately address modern technology, nor 
is it completely clear that it covers all forms of gambling. 
This legislation makes it clear that it does cover all forms of 
gambling and all forms of technology.
    I have worked with the gentleman from Utah, and I am 
pleased that he has offered improvements to the bill, which we 
will subsequently offer today, along with the gentleman from 
Virginia, Mr. Boucher, who has been a longtime supporter and 
champion of this measure as well. And I appreciate their 
efforts to improve the bill, and we will offer that manager's 
amendment at the appropriate time.
    At this time I would urge all of my colleagues to support 
this measure and we'll discuss the details of some of the 
amendments that may be offered as they are offered.
    Thank you, Mr. Chairman.
    Mr. Coble. Mr. Chairman, I yield back.
    Chairman Sensenbrenner. The gentleman from Virginia, Mr. 
Scott, do you have an opening statement on behalf of the 
Democrats?
    Mr. Conyers. Mr. Chairman, could I start it off?
    Mr. Scott. I have a statement.
    Chairman Sensenbrenner. The gentleman from Michigan, Mr. 
Conyers.
    Mr. Conyers. Then yield to my dear friend from Virginia.
    Mr. Scott. Thank you, Mr. Chairman, for holding the markup 
on H.R. 4777, the ``Internet Gambling Prohibition Act of 
2006.'' The bill provides for Federal regulation of gambling 
over the Internet. I believe that all gambling should be 
tightly regulated. Traditionally, the regulation of gambling 
has been primarily a State responsibility, and it should 
continue to do so in my judgment, although the Federal 
Government has had and should continue to have a role to assist 
the States in the total regulatory scheme.
    The Federal Government undertook such a role in passing the 
1961 Wire Communications Act as a way to assist in the fight 
against gambling by organized crime syndicates. The Department 
of Justice contends that it can prosecute Internet gambling 
businesses under that law, but there's a question as to whether 
that is the case under the Interstate Horse Racing Act. 
Clearly, the 1961 act was not designed with Internet gambling 
in mind. And while I appreciate the desire of the author of the 
bill, my friend and colleague from Virginia, Mr. Goodlatte, to 
update the ability of the Department to address illegal 
gambling over the Internet, I do not believe that H.R. 4777 is 
likely to be an effective way to do so.
    Regulating anything over the Internet is problematic, even 
when desirable. Most law enforcement jurisdiction--most law 
enforcement is jurisdiction dependent. The Internet has no 
jurisdiction, and as a result I suspect that even if we were 
successful in closing down business sites physically located in 
the United States or in countries that we can get to cooperate, 
because of the nature of the Internet and the ingenuity of 
people using it, the approach in H.R. 4777 will ultimately be 
ineffective.
    As we've heard during the hearing on this bill, as written 
it will create an enforcement nightmare for financial 
institutions that it requires to look up and stop illegal 
gambling transactions. Identifying Internet gambling 
transactions will be very difficult, if not impossible. While 
some companies may be able to identify some gaming transactions 
by the codes used, such enforcement can easily be thwarted. 
Business may have one code for payment purposes, but may engage 
in several activities, including Internet gambling, under that 
code.
    For example, Caesar's Palace or a foreign company could 
have a hotel and a gaming operation that are paid as a single 
account over the Internet, or an e-cash or electronic payment 
system, or any escrow agent can relocate to another country, 
and, therefore, evade enforcement mechanisms in the bill or 
even do so domestically. All the bank may know is that the 
payment came from, say, PayPal and with some gaming activities 
that use the Internet being legal, how would the financial 
institution be able to distinguish between a legal and illegal 
check to that business?
    Furthermore, Mr. Chairman, we should not overestimate the 
cooperation we will get from other countries. According to one 
consulting firm, the Internet gambling websites brought in $14 
billion worldwide last year, which was up from $8 billion the 
year before. That number is expected to almost double to $24 
billion by 2010. Presently, over 85 foreign governments 
specifically authorize some kind of gambling online, and that 
number is likely to grow as well. So what governments are 
likely to cooperate with us in prosecuting businesses that they 
authorize to operate? And even if we are successful in getting 
cooperation from such countries, it would simply be increasing 
the profit opportunities for uncooperative countries, 
especially those with whom the United States does not have 
normal diplomatic relations.
    This bill as written does not prohibit Internet gambling. 
It prohibits running the operation. If we want it to be 
effective in prosecuting illegal gambling over the Internet, we 
would prosecute the individual gamblers. A few sting operations 
would get the word out that if you gamble over the Internet, 
you are at the mercy of law enforcement because they leave a 
trail, a paper trail that they can follow. So long as 
individuals can gamble over the Internet with impunity, the 
market will be provided for them, which the regulatory scheme 
in this bill will not be able to stop.
    Just look at our experience in the War on Drugs. Although 
we prohibit the sale of drugs and the purchase of drugs, we see 
that as long as there's a demand, we'll only have limited 
success. But if we look at the approach in this bill, we would 
be prosecuting the seller but not the buyer and have even less 
success than we're having today.
    Mr. Chairman, I believe that there are more effective 
ways--there are more effective Internet gambling regulatory 
approaches than provided in 4777. H.R. 1223, authorized by the 
full Committee Ranking Member, Mr. Conyers, in the last 
Congress is one such approach. It initially created a study 
commission that would study the issue and make recommendations 
for a regulatory scheme for Internet gambling that would be 
controlled by the individual States. Under the bill's 
regulatory----
    Chairman Sensenbrenner. The time of the gentleman from 
Michigan has expired.
    Mr. Scott. Mr. Chairman, could he have an additional 1 
minute?
    Chairman Sensenbrenner. Without objection.
    Mr. Scott. Under the bill's regulatory scheme, if Nevada 
opted to allow Internet gambling within its borders, it could. 
If Utah prohibited individuals in that State from gambling over 
the Internet, it could. And that would be enforceable by the 
Federal Government, by the States that allow the gambling, and 
by the State of Utah as well because in the fullness of time, a 
gambler would be required to provide a mailing address in order 
to get paid.
    Legal gambling in this country and around the world is a 
fact of life, and so is the Internet. As more and more of our 
daily activities intersect with the Internet, it is only 
logical that gambling would as well. I believe that we should 
regulate Internet gambling, but we should do so effectively. We 
should not subject any single business sector to the sole or 
principal responsibility for doing the bulk work of 
enforcement, whether it's the banking industry, as in this 
bill, or the Internet service industry, as tried in prior 
bills. There are ways to regulate----
    Chairman Sensenbrenner. The time of the gentleman has once 
again expired.
    Mr. Scott. Mr. Chairman, if I could have one more sentence?
    Chairman Sensenbrenner. Without objection, the filibuster 
will----
    Mr. Scott. There are ways to regulate the Internet gambling 
effectively, and I believe that some amendments offered today 
will help us do so, and so I thank--Mr. Chairman, I thank you 
for holding the markup to allow us to explore these issues.
    Chairman Sensenbrenner. Without objection, all Members may 
place opening statements in the record at this point.
    [The prepared statement of Mr. Conyers follows:]

Prepared Statement of the Honorable John Conyers, Jr., a Representative 
 in Congress from the State of Michigan, and Ranking Member, Committee 
                            on the Judiciary

    Aside from an updated bill number and a few modest changes in 
drafting, many of the problems that existed in the internet gambling 
bill we considered last Congress continue to exist in this measure.
    For example, while the bill claims to ban all forms of online 
gambling, it specifically exempts betting on horseracing and state-
owned and operated lotteries. In other words, the bill only establishes 
a ``partial ban'' on internet gambling.
    In the past, the Department of Justice has gone to great lengths to 
highlight this fact. However, proponents of this measure have been 
unwilling to eliminate the bill's numerous carve-outs for its favorite 
industries.
    Second, contrary to the assertions of some, the bill is not likely 
to lead to a meaningful reduction in the current number of Americans 
that place bets online. Major financial service organizations already 
employ the bill's main enforcement mechanisms, and Americans can easily 
circumvent these prohibitions by using third-party payers or foreign 
banks.
    Third, by eliminating a customer's access to the U.S. financial 
services industry, the bill may make the most pressing dangers posed by 
the internet gambling industry even worse. After all, credit cards play 
a vital role in determining an individual bettor's age and tracking his 
or her potential earnings or losses. By prohibiting their use, we 
effectively lose access to this key information.
    Finally, the bill proposes to establish a complex regulatory system 
for banks that is all but impossible to comply with. Under the specific 
provisions of this bill, banks would be asked to determine the legality 
of a particular transaction based upon the type of gambling activity 
involved; the location of the transaction; and whether or not the 
transaction involved interstate commerce. Just this week, the Chamber 
of Commerce supplied members of this Committee with a letter indicating 
their opposition to such language.
    If we really want to gain effective control of the online gambling 
industry, we must regulate it. Establishing a ``partial ban'' that 
allows some forms of gambling to continue without the benefit of 
adequate checks and balances only threatens to make the current 
situation even more problematic.

    Are there amendments? The gentleman from Virginia, Mr. 
Goodlatte.
    Mr. Goodlatte. Mr. Chairman, I have an amendment in the 
nature of a substitute offered by myself, Mr. Cannon, and Mr. 
Boucher.
    Chairman Sensenbrenner. The clerk will report the 
amendment.
    The Clerk. Amendment to H.R. 4777, offered by Mr. Goodlatte 
(for himself, Mr. Cannon, and Mr. Boucher). Strike all after 
the enacting clause and insert the following----
    Chairman Sensenbrenner. Without objection, the amendment is 
considered as read.
    [The amendment follows:]

    
    
    Chairman Sensenbrenner. The gentleman from Virginia is 
recognized for 5 minutes.
    Mr. Goodlatte. Mr. Chairman, I offer this substitute 
amendment with Congressman Cannon to further strengthen this 
legislation. At the request of the Department of Justice, 
additional language has been included in this amendment to 
ensure that it is not technology specific and will accommodate 
future advances in new technology, such as fiberoptics. In 
addition, we have included language that has been negotiated 
with the Department of Justice to further tighten the bill by 
clarifying that this act does not change which activities 
related to horse racing may or may not be allowed under Federal 
law. This additional language satisfies the concerns expressed 
by the Department of Justice by ensuring that this act does not 
have the effect of changing the existing relationship between 
the Interstate Horse Racing Act and other Federal statutes 
currently in effect.
    Lastly, the manager's amendment clarifies that the $10 
million authorized for enforcement and prosecution under this 
act should be appropriated to the Department of Justice.
    I thank Mr. Cannon and Mr. Boucher for working with me on 
this legislation. I urge Members of the Committee to support 
this amendment, and I would note the importance of not only the 
portion of this legislation that we have brought forward to 
modernize the Wire Act to make it clear that it applies to all 
forms of gambling, that there are no carve-outs, no exceptions 
in this bill, that it protects the right of the States to do 
what they have historically done to regulate gambling as they 
see fit. And it also gives the States another new tool that 
they desire, and the Justice Department, and that is to work 
with the financial services industry through our legal system, 
as they have done with money laundering, as they have done with 
drug smuggling, as they have done with other efforts by 
criminals to transfer funds using our banking system to 
criminal enterprises. This legislation will give that new tool 
to the States and the Federal Government with regard to 
preventing this money from going out of the country by all the 
host of different means that are used to send money.
    I am under no illusion that we can stop a determined 
gambler from sending money to these offshore sites, but I think 
the vast majority of it, if it's made inconvenient by no longer 
making it available through the normal banking transactions 
that take place, much of it will be cut off.
    I again thank the gentleman from Utah, and I urge my 
colleagues to support this substitute.
    Chairman Sensenbrenner. Does the gentleman yield back?
    Mr. Goodlatte. I yield back.
    Mr. Conyers. Mr. Chairman?
    Chairman Sensenbrenner. The gentleman from Michigan, Mr. 
Conyers.
    Mr. Conyers. I am sorry to rise to oppose the amendment, 
but it's the same reason that we have reservations in the 
underlying text of the base bill. It fails to close the 
numerous exemptions which would allow gamblers to continue to 
cast bets on such activities as horse racing and State 
lotteries.
    Moreover, with regard to such activities, it fails to 
include the necessary safeguards to protect against underage 
gambling and concerns regarding money laundering.
    This substitute fails to address the concerns of countless 
local bankers who've testified before this Committee and 
pointed out that the underlying bill proposes to establish a 
complex regulatory system virtually impossible to comply with. 
It won't work. This latter concern has been echoed by members 
of the Chamber of Commerce, and ultimately proponents of a ban 
on Internet gambling simply can't have it both ways, as section 
5 attempts to accomplish.
    I'll read the section to you: ``It is the sense of Congress 
that this act does not change which activities related to horse 
racing may or may not be allowed under Federal law.'' So if the 
goal of the underlying bill and the amendment before us to 
prohibit online gambling, then why would both bills continue to 
allow betting on horse racing? Well, we know, thanks to a 
recent Baltimore Sun article, that the horse racing industry 
intends to use this exemption to encourage youth to bet on the 
sport. And so until these issues are adequately addressed, I 
encourage my colleagues to oppose the amendment, the substitute 
before us, and I return my time.
    [The prepared statement of Mr. Conyers follows:]

Prepared Statement of the Honorable John Conyers, Jr., a Representative 
 in Congress from the State of Michigan, and Ranking Member, Committee 
                            on the Judiciary

    I'm opposed to this amendment for the same reasons that I oppose 
the underlying text of the base bill.
    Namely, it fails to close the numerous exemptions which would allow 
gamblers to continue to cast bets on such activities as horseracing and 
state lotteries. Moreover, with regard to such activities, it fails to 
include the necessary safeguards to protect against underage gambling 
and concerns regarding money laundering.
    The manager's amendment also fails to address the concerns of 
countless local bankers who have testified before this Committee and 
pointed out that the underlying bill proposes to establish a complex 
regulatory system that is virtually impossible to comply with. This 
latter concern has been echoed by members of the Chamber of Commerce.
    Ultimately, proponents of a ban on internet gambling simply can't 
have it both ways, as section 5 attempts to accomplish. That section, 
in relevant part, reads: ``It is the sense of Congress that this Act 
does not change which activities related to horse racing MAY or MAY NOT 
be allowed under federal law.''
    If, as the sponsors contend, the goal of the underlying bill and 
the manager's amendment before us is to prohibit online gambling, then 
why would both bills continue to allow betting on horse racing? We 
know, thanks to a recent article printed in the Baltimore Sun, that the 
horse racing industry intends to use this exemption to encourage youth 
to bet on their sport.
    Until these issues are adequately addressed, I strongly encourage 
my colleagues to oppose this amendment and the underlying bill.

    Chairman Sensenbrenner. Are there any second-degree 
amendments to the amendment in the nature of a substitute 
offered by Mr. Goodlatte?
    Mr. Cannon. Mr. Chairman?
    Chairman Sensenbrenner. The gentleman from Utah, Mr. 
Cannon.
    Mr. Cannon. I have an amendment at the desk.
    Chairman Sensenbrenner. The clerk will report the second-
degree amendment.
    The Clerk. Amendment to H.R. 4777, offered by Mr. Cannon of 
Utah and Mr. Goodlatte of Virginia. At the end the following: 
Rule of Construction. Nothing in this act may be construed to 
preempt State tax law prohibiting gambling.
    [The amendment follows:]
      
      

  


    Chairman Sensenbrenner. The gentleman from Utah is 
recognized for 5 minutes.
    Mr. Cannon. Mr. Chairman, this amendment is a reaffirmation 
that this legislation in no way preempts States' rights as it 
relates to the State's decision on prohibiting gambling. Over 
the years, I have consistently worked to make this bill work in 
the peculiar circumstances of the State of Utah, my home State. 
We don't have gambling. I have fought and won amendments on 
this Committee with the support of the Chair to strike out 
provisions that have been referred to as ``carveouts.''
    One particular carveout related to the Interstate Horse 
Racing Act. In 1978, Congress passed the Interstate Horse 
Racing Act, which is what originally allowed off-track betting 
facilities to take bets on horse races in other States. 
Obviously, the statute was written long before the advent of 
the Internet. Over the years, the Department of Justice and the 
horse racing industry have been at loggerheads on whether 
betting over the Internet would constitute a violation of the 
Wire Act and contribute to a proliferation of Internet 
gambling. It was my concern that previous versions of the 
legislation pronounced horse racing as the winner in this 
debate. If previous versions had become law, it was my concern 
that the law would regulate the Internet so that certain forms 
of gambling would be legalized, especially in Utah.
    More particularly, it was my apprehension, which was shared 
by the Department of Justice, that individuals, especially the 
people of Utah, could bet from their living rooms or, worse, a 
child could bet from his bedroom. I couldn't let Federal law 
allow that.
    In the intervening time from the Subcommittee mark to 
today's full Committee mark, we have reached accommodation with 
the Department of Justice and with the author of this 
legislation to make sure this legislation prevents this type of 
activity. We have accomplished that in two ways. First, the 
horse racing carveout language has been removed. It is not an 
amendment to the Wire Act. If the horse racing language 
remained in that section, it would have made it a peculiar--a 
particular exception to the law that could have affected the 
right of States to prohibit gambling.
    Although I am happy with this change, I still have concerns 
about some of the language in the bill. So Mr. Goodlatte and I 
have worked out further protections to maintain the rights of 
States to determine what is permissible within their borders. 
That is the reason for the amendment that I have offered and 
which Mr. Goodlatte has supported with me. That preserves the 
rights of States and that nothing in this act will interfere 
with the State law that prohibits gambling. This amendment will 
help shut the door on any ambiguity and rightfully reaffirm 
Utah's and any other State's right to determine what is 
permissible on this crucial issue.
    After years of working on this issue, it appears the dust 
has settled and we have finally reached an accommodation that 
even recently was not conceivable, and I'd like to thank Mr. 
Goodlatte, who's worked extraordinarily hard with a broad array 
of people to get to a point where we can actually move a bill 
that is very sensible. I also want to thank Branden Ritchie of 
his staff, Will Michel of the Department of Justice, who spent 
a great deal of time and effort on this, and his staff, and my 
staff, especially Matt Iandoli, who has worked diligently on 
this. And I want to thank all of them for helping to develop a 
position that is workable on this issue, and I yield back the 
balance of my time----
    Mr. Goodlatte. Would the gentleman yield?
    Mr. Cannon. Yes, I'd be happy to yield to Mr. Goodlatte.
    Mr. Goodlatte. I thank the gentleman for yielding and for 
his comments, and I strongly support his amendment, which is an 
improvement to the bill, and urge my colleagues to support it 
as well.
    Mr. Cannon. Thank you, Mr. Chairman. I yield back.
    Chairman Sensenbrenner. The question is on agreeing to the 
second-degree amendment to the amendment in the nature of a 
substitute offered by Mr. Cannon. Those in favor will say aye? 
Opposed, no?
    The ayes appear to have it. The ayes have it. The second-
degree amendment is agreed to.
    Are there further second-degree amendments?
    Mr. Wexler. Mr. Chairman?
    Chairman Sensenbrenner. For what purpose does the gentleman 
from Florida seek recognition?
    Mr. Wexler. To offer an amendment, Mr. Chairman.
    Chairman Sensenbrenner. The clerk will report the 
amendment.
    Mr. Wexler. I think it's the amendment labeled Wexler 26.
    The Clerk. Amendment to H.R. 4777, offered by Mr. Wexler of 
Florida. Page 14, after line 3, insert the following: Section 
(h) Nothing in this section prohibits the use of a 
communications facility for the transmission of bets or 
wagers----
    Chairman Sensenbrenner. Without objection, the amendment is 
considered as read.
    [The amendment follows:]
      
      

  


    Chairman Sensenbrenner. The gentleman from Florida is 
recognized for 5 minutes.
    Mr. Wexler. Thank you, Mr. Chairman.
    If I could try to sum this up--and we've had this 
discussion and debate in this Committee in the past. If this 
bill were only about regulating offshore gambling via the 
Internet, there would be no controversy. At least there'd be no 
controversy with me.
    We are not doing that in this bill alone. We are doing more 
than that. And if I could sum up the positions as they have 
been expressed in the past and in effect are being expressed 
today, Mr. Cannon in effect in the past has said he's against 
any expansion of gambling--no ifs, no ands, no buts--and as a 
result in the past offered amendments which would have stripped 
from the bill any opportunity for any of the industries to 
argue that there was an opportunity to expand gambling on the 
Internet.
    I took the position that I'm not really for expanding 
gambling on the Internet, and I'm not against it. But if you're 
going to allow it or you're going to prohibit--you know, don't 
allow it, do it evenly. Don't pick and choose between lawful 
businesses. If you're going to allow parimutuels that are 
allowed under State law like horses to do it, then allow dog 
tracks and jai-alai to do it if they, too, are permitted under 
State law. If you're not going to allow horses, don't allow 
dogs, don't allow jai-alai.
    But this Congress should not be in the business, in my 
view, of picking between lawful businesses and saying, okay, a 
State may authorize jai-alai, horses, and dogs, but we, the 
great mighty Congress, we're only going to say horses alone can 
do gambling on the Internet.
    So I offered amendments that said treat them all even. 
That's what this amendment is.
    Now, Mr. Goodlatte, in fairness, what he usually says and 
what I imagine he will say next is, No, Wexler, you got it all 
wrong, that his bill doesn't allow horses to gamble over the 
Internet because---- [Laughter.]
    People to bet on horses. [Laughter.]
    But if you allowed horses, you should allow dogs. What Mr. 
Goodlatte will say is, no, horses are regulated under an 
entirely different statute and, therefore, we really don't say 
that in this bill. It just so happens we incorporate that 
statute into this bill.
    Now, with all due respect, let's forget the legality. The 
bottom line is here. We've got legal parimutuel industries in 
America. You can be for them, you can be against them. That's 
the way it stands. In Utah, I believe they don't allow them. In 
Florida, they do, under strict regulation. What this amendment 
simply says, if--whatever rules you've got for horse tracks, 
you have them for dog tracks, you have them for jai-alai. It's 
fairness. It would be absolutely absurd for this Committee to 
pick between legal, law-abiding, tax-paying businesses and 
saying, one, you're okay, one, you're not. That is an absurd 
result.
    Thank you, Mr. Chair--oh, and if I may just add one thing. 
This isn't partisan. And the colleagues on this side, please 
don't be persuaded by the offeror of the amendment. In the 
past---- [Laughter.]
    In the past, Mr. Chairman, Chairman Sensenbrenner has 
supported an identical amendment. Mr. Hyde has supported an 
identical amendment. Mr. Coble has supported an identical 
amendment. Many of the newer Members have not had an 
opportunity yet to voice their view on this. Of course, I don't 
speak for anyone else, but I wouldn't want anyone to have the 
impression that there was anything partisan about this. There 
is not.
    Mr. Goodlatte. Mr. Chairman?
    Chairman Sensenbrenner. For what purpose does the gentleman 
from Virginia, Mr. Goodlatte, seek recognition?
    Mr. Goodlatte. To speak in opposition to the amendment.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Goodlatte. Mr. Wexler, you are wrong. [Laughter.]
    I oppose this amendment, and we have worked through this, 
and we've had discussions about this. In fact, in my original 
bill, offered many years ago, we included a carveout for dogs 
and jai-alai, and that was indeed a carveout. But the 
difference is your amendment offered today is to a very 
different bill, and the amendment would create the first 
carveout in this bill.
    This amendment seeks to create a specific exception in the 
bill for dog racing and would create the first carveout in the 
bill. The author argues that this legislation created a 
carveout for horse racing, but that is simply not the case. 
H.R. 4777 does not have a carveout for horse racing. Horse 
racing is unique because almost 30 years ago Congress passed 
the Interstate Horse Racing Act. There is no Interstate Dog 
Racing Act. If the gentleman wants to go and get such a thing 
passed, he would have the same argument the horse racing 
industry has, but he would also have the same problem the horse 
racing industry has, which is that the United States Department 
of Justice disagrees that the Interstate Horse Racing Act 
allows the horse racing industry to do what they're doing.
    We have very carefully stayed out of that debate because 
this legislation is about dealing with offshore gambling, and 
it is about protecting the rights of the States to regulate 
gambling. That dispute should be kept out of this debate and 
handled separately. While the Interstate Horse Racing Act 
addresses these activities, there is an ongoing dispute with 
the Justice Department and the horse racing industry as to 
whether these activities would be prohibited under certain 
other Federal statutes. H.R. 4777 and the language that Mr. 
Cannon and I have offered does not in any way alter the ongoing 
debate on that, but it does make it perfectly clear that this 
legislation in no way enhances the horse racing industry. And, 
therefore, it would be absolutely inappropriate to the purpose 
of this legislation to accept an amendment that does alter the 
status of the dog racing industry by putting them ahead of 
everybody else. And there are many other gambling enterprises 
who would like to have that same type of a carveout. We are 
being as strong as we have ever been--in fact, Mr. Cannon would 
certainly argue much stronger--in making absolutely sure that 
this legislation does not have carveouts and does not get into 
the issue of whether or not the States or the Federal 
Government should legalize any particular type of gambling 
enterprise. This is about strengthening law enforcement by 
modernizing the Wire Act and about making sure that it is more 
difficult to send this money out of this country. So whether 
you like gambling or not, there are many reasons to support 
this bill and many reasons to oppose the amendment.
    I oppose gambling because I think it causes many, many 
problems in our society, family problems, problems with 
bankruptcy, problems with minors gambling, problems with 
gambling addiction, problems with organized crime, problems 
with money laundering, problems with even the possibility of 
terrorist organizations using these offshore sites which are in 
many countries receiving almost no oversight, using them to 
raise money for terrorist organizations and other types of 
criminal activities. This legislation goes after that problem. 
Let's not get sidetracked on carveouts.
    I urge my colleagues to oppose the amendment and yield 
back.
    Chairman Sensenbrenner. For what purpose does the gentleman 
from California, Mr. Schiff, seek recognition?
    Mr. Schiff. Move to strike the last word.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Schiff. Mr. Chairman, I don't have a horse in this 
race, and I don't have a dog in this race, either. [Laughter.]
    I don't have a dog in this fight, and I certainly don't 
have any jai-alai, so I will yield my time to the gentleman 
from Florida.
    Mr. Wexler. Thank you very much.
    Mr. Goodlatte, I wish it were so. Everyone, please, on the 
bill turn to page 16. ``Rule of Construction,'' at the top. 
``Nothing in this act may be construed to prohibit any activity 
that is allowed under Public Law 95-515 as amended.'' That's 
the law that allows horse track betting.
    Mr. Goodlatte. Would the gentleman yield?
    Mr. Wexler. Sure.
    Mr. Goodlatte. The United States Department of Justice 
doesn't agree with that. It simply says we're not overturning 
that law, whatever that law means.
    Mr. Wexler. If we were only doing what you wanted to do 
regarding law enforcement, there'd be no reason for this 
provision. Let's at least get it straight. For the purists who 
do not want gambling, you shouldn't vote for this bill because 
you are, in fact, giving horse track betting a better 
opportunity to argue that Internet gambling is okay.
    Now, I'm all for that, but don't delude yourselves if 
you're against gambling to think that you somehow are not 
adding to gambling opportunities. If you took out this section, 
I guess I'd be all right because horses--horse tracks couldn't 
gamble, dog tracks couldn't gamble, jai-alai couldn't. But if 
you've got this section in, horses are treated better than dogs 
or jai-alai----
    Mr. Cannon. Would the gentleman from California yield?
    Mr. Schiff. Yes. I can tell this debate is going to the 
dogs, and I'd be delighted to yield----
    Mr. Cannon. As long as I have the time, let us throw the 
bone to the dogs at the Justice Department and look at the 
letter that has been sent, I think today, to Mr. Sensenbrenner 
from the--everybody has a copy now, and I think that the 
argument of the gentleman was persuasive historically. But the 
fundamental changes--one of the fundamental changes to the bill 
today is that it is actually clearly neutral and does not 
change either to make it more difficult to bet on horse racing 
or less difficult. And that I think is what has been clarified 
with great effort and through the hearings that we've had on 
this subject matter.
    Thank you, and I yield back to the----
    Mr. Wexler. May I ask a question?
    Mr. Schiff. Reclaiming my time----
    Mr. Wexler. Why do we----
    Mr. Schiff.--and yielding it to the gentleman with the 
argument of the horse----
    Mr. Wexler. If it's so clear, why do we need to make it 
clearer with the Rule of Construction? The Rule of Construction 
here is designed for one purpose only. Let's at least be 
honest. It's to protect the horse tracks from betting on the 
Internet. I'm willing to say yes, let them do it, and I'm 
willing to support the bill with this in it. But don't argue, 
respectfully, that we're somehow being neutral, when we're not. 
If you pass this bill with this Rule of Construction in it, 
you're saying horse tracks, you go ahead and gamble away on the 
Internet, and you've got an extraordinary competitive advantage 
over your legal competitors, and let the States do that, let 
the people who regulate it do it, if that's what they're going 
to do. But why in God's name would we do it?
    Mr. Goodlatte. Would the gentleman from California yield?
    Mr. Schiff. Yes, I'd be delighted to yield.
    Mr. Goodlatte. I would just call again the attention of 
every Member to the letter from the Justice Department. They 
have strongly and publicly disputed what the gentleman says 
about whether the horse racing industry can do what they claim 
to be able to do under the Interstate Horse Racing Act. That's 
a separate Federal statute. As I've said earlier, the gentleman 
can offer an Interstate Dog Racing Act as a separate measure if 
he wishes to. But in this legislation, the gentleman is barking 
up the wrong tree. [Laughter.]
    Mr. Schiff. On that, I reclaim my time and----
    Mr. Smith. Mr. Chairman?
    Mr. Schiff. As I'm all out of puns, I yield back my time.
    Mr. Smith. Mr. Chairman?
    Chairman Sensenbrenner. For what purpose does the gentleman 
from Texas, Mr. Smith, seek----
    Mr. Smith. Mr. Chairman, I move to strike the last word.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Smith. Mr. Chairman, I oppose this amendment, and I 
support the underlying bill, as I have in the past.
    Mr. Chairman, let me change the subject a little and also 
lower the decibel level. I know that organized gambling does 
not like this bill, but this legislation protects families and 
upholds the rule of law. The fact is that any gambling not 
currently regulated by the States is illegal in this country. 
But the Internet has given anyone who knows how to use a 
computer, including children, access to unlimited gambling.
    Unfortunately, illegal gambling businesses are rarely 
prosecuted. These 24-hour-a-day businesses hook children and 
adults and can lead to addiction, criminal behavior, financial 
troubles, and worse. These Internet gambling sites establish 
themselves offshore so they are not subject to U.S. laws. But 
what they do impacts every American.
    Also, officials from the FBI recently testified that 
Internet gambling serves as a vehicle for money-laundering 
activities by terrorists. The Internet Gambling Prohibition Act 
simply updates current law to make sure that all methods of 
gambling, even those done using the latest and ever-changing 
technologies, are covered under the established law known as 
the Wire Act. The bill marginalizes organized gambling by 
banning those businesses from taking checks, wire transfers, 
and credit cards in payment for illegal gambling.
    Mr. Chairman, I'd like to thank Mr. Goodlatte for offering 
this legislation, and I urge my colleagues to oppose the 
amendment and support the underlying bill. And I'll yield back 
my----
    Ms. Jackson Lee. Mr. Chairman? Mr. Chairman?
    Chairman Sensenbrenner. For what purpose does the 
gentlewoman from Texas seek recognition?
    Ms. Jackson Lee. Strike the last word.
    Chairman Sensenbrenner. The gentlewoman's recognized for 5 
minutes.
    Ms. Jackson Lee. Mr. Chairman, let me commend the gentleman 
from Virginia for the effort that he is making and the issues 
that he is attempting to address with this legislation, and as 
he well knows, I had originally had great interest in it for 
its value as it relates to children and gambling. But I rise to 
support the gentleman's amendment from Florida and express at 
the same time this degree of unreadiness. The very fact that 
we're debating the confusion that seems to exist in the bill, 
whether one aspect of gambling is acceptable and one is not, 
says to me that there is additional work to be done.
    Particularly, I know that this bill attempts to clarify the 
Wire Act and to prohibit not only sports betting but 
traditional gambling such as online poker. But my concern is 
whether the factual record regarding the need for amending the 
Wire Act has not been demonstrated and, more important, we do 
not have the benefit of the views of senior prosecutors in the 
Department of Justice. As I recall, unless there was an 
additional witness, the witness that came was not a 
Presidential appointee and he was not authorized to speak for 
the Administration. There may be subsequent letters, but I do 
think there is a great need for additional work so that the 
discriminatory aspect of this bill does not go forward. And so 
I see a lack of legislative-executive coming together on this 
bill.
    My second concern is, of course--is that the carveout that 
I see in H.R. 4777 on horse racing will place the United States 
at risk of being found in violation of trade laws by the World 
Trade Organization. The bill as written can arguably be 
characterized as disadvantaging European and Australian-based 
Internet gambling companies who would be excluded from the 
American market.
    And then I am concerned about the involvement of our 
community independent banks. When we heard from the Vice 
President of First State Bank testified with great knowledge 
and conviction that financial institutions especially 
relatively small ones, like the ones he represents, to 
identify, monitor, and track Internet gambling transactions of 
its account holders would be a very difficult concept. And he 
informed the Subcommittee that financial institutions simply 
did not possess the sophisticated detection technology that 
could be made--that could make it conceivable to identify 
problematic accounts.
    Now, since the risks of violation of H.R. 4777 is great, it 
carries penal sanctions, it does not appear wise or prudent at 
this time to burden small financial institutions.
    Now, I am moved by the proponents of this bill's comments 
as it relates to terrorism, and anytime we hear that word in 
this Congress, we are bound by our duty to stand alert. If that 
is the case, I would seek the jurisdiction of the Homeland 
Security Committee to investigate potential terrorist 
activities and Internet gambling connections to terrorism and 
money laundering, particularly as it relates to terrorism, and 
I certainly welcome the expressions of the proponents of this 
bill to raise that issue in the Homeland Security Committee, as 
they are raising it in this Committee with respect to its 
jurisdiction on crime and terrorism.
    But in that vein, then, I think that again, although this 
bill has come up again, there is a sense of unreadiness and 
possibly needing additional work as we make our way to the 
floor.
    I conclude by simply saying we should all be concerned 
about children accessing the Internet and accessing this 
gambling process. And I would like to work along those lines 
for some comfort level that this is the direct focus of this 
legislation as opposed to the broad-based impact that it seems 
to have.
    So I indicate to the gentleman that I hope that this will 
be clear as it makes its way to the floor, and I yield back my 
time.
    Ms. Wasserman Schultz. Mr. Chairman?
    Chairman Sensenbrenner. For what purpose does the 
gentlewoman from Florida, Ms. Wasserman Schultz, seek 
recognition.
    Ms. Wasserman Schultz. I move to strike the last word.
    Chairman Sensenbrenner. The gentlewoman is recognized for 5 
minutes.
    Ms. Wasserman Schultz. Mr. Chairman, some people would 
agree--or would argue that we should just let sleeping dogs lie 
and not allow an exemption for dog racing. However, that dog 
just won't hunt.
    I support this bill, and I'm a cosponsor of the Leach bill, 
as a matter of fact, but we should be consistent in our 
application of policy. It's a dog-eat-dog world, Mr. Chairman, 
particularly in the parimutuel industry. Therefore, I must 
associate myself with the gentleman from Florida's remarks and 
urge my colleagues to support this amendment and support a 
level playing field when it comes to Internet gambling and the 
parimutuel industry as that is the only fair approach to this 
whole issue in this dog-eat-dog world, or this whole issue will 
go to the dogs. And I yield back the balance of my time.
    Chairman Sensenbrenner. The question is on the amendment 
offered by the gentleman from Florida, Mr. Wexler. All those in 
favor of the amendment will please say ``woof.'' [Laughter.]
    Those opposed, say no.
    The ``woofs'' appear to be defeated, and the noes have it.
    Mr. Wexler. Recorded vote.
    Chairman Sensenbrenner. A recorded vote is ordered. Those 
in favor of the Wexler amendment will, as your names are 
called, answer aye, those opposed no, and the clerk will call 
the roll.
    The Clerk. Mr. Hyde?
    [No response.]
    The Clerk. Mr. Coble?
    [No response.]
    The Clerk. Mr. Smith?
    Mr. Smith. No.
    The Clerk. Mr. Smith, no. Mr. Gallegly?
    Mr. Gallegly. No.
    The Clerk. Mr. Gallegly, no. Mr. Goodlatte?
    Mr. Goodlatte. No.
    The Clerk. Mr. Goodlatte, no. Mr. Chabot?
    Mr. Chabot. No.
    The Clerk. Mr. Chabot, no. Mr. Lungren?
    Mr. Lungren. No.
    The Clerk. Mr. Lungren, no. Mr. Jenkins?
    Mr. Jenkins. No.
    The Clerk. Mr. Jenkins, no. Mr. Cannon?
    Mr. Cannon. No.
    The Clerk. Mr. Cannon, no. Mr. Bachus?
    Mr. Bachus. No.
    The Clerk. Mr. Bachus, no. Mr. Inglis?
    [No response.]
    The Clerk. Mr. Hostettler?
    Mr. Hostettler. No.
    The Clerk. Mr. Hostettler, no. Mr. Green?
    Mr. Green. No.
    The Clerk. Mr. Green, no. Mr. Keller?
    Mr. Keller. No.
    The Clerk. Mr. Keller, no. Mr. Issa?
    Mr. Issa. No.
    The Clerk. Mr. Issa, no. Mr. Flake?
    [No response.]
    The Clerk. Mr. Pence?
    Mr. Pence. No.
    The Clerk. Mr. Pence, no. Mr. Forbes?
    Mr. Forbes. No.
    The Clerk. Mr. Forbes, no. Mr. King?
    Mr. King. No.
    The Clerk. Mr. King, no. Mr. Feeney?
    Mr. Feeney. Yes.
    The Clerk. Mr. Feeney, yes. Mr. Franks?
    Mr. Franks. No.
    The Clerk. Mr. Franks, no. Mr. Gohmert?
    Mr. Gohmert. No.
    The Clerk. Mr. Gohmert, no. Mr. Conyers?
    Mr. Conyers. Aye.
    The Clerk. Mr. Conyers, aye. Mr. Berman?
    Mr. Berman. Aye.
    The Clerk. Mr. Berman, aye. Mr. Boucher?
    Mr. Boucher. No.
    The Clerk. Mr. Boucher, no. Mr. Nadler?
    [No response.]
    The Clerk. Mr. Scott?
    Mr. Scott. Aye.
    The Clerk. Mr. Scott, aye. Mr. Watt?
    Mr. Watt. Woof. [Laughter.]
    The Clerk. Mr. Watt, aye. Ms. Lofgren?
    Ms. Lofgren. Aye.
    The Clerk. Ms. Lofgren, aye. Ms. Jackson Lee?
    Ms. Jackson Lee. Aye.
    The Clerk. Ms. Jackson Lee, aye. Ms. Waters?
    Ms. Waters. Aye.
    The Clerk. Ms. Waters, aye. Mr. Meehan?
    [No response.]
    The Clerk. Mr. Delahunt?
    [No response.]
    The Clerk. Mr. Wexler?
    Mr. Wexler. Aye.
    The Clerk. Mr. Wexler, aye. Mr. Weiner?
    Mr. Weiner. Aye.
    The Clerk. Mr. Weiner, aye. Mr. Schiff?
    Mr. Schiff. Aye.
    The Clerk. Mr. Schiff, aye. Ms. Sanchez?
    Ms. Sanchez. Aye.
    The Clerk. Ms. Sanchez, aye. Mr. Van Hollen?
    Mr. Van Hollen. No.
    The Clerk. Mr. Van Hollen, no. Ms. Wasserman Schultz?
    Ms. Wasserman Schultz. Aye.
    The Clerk. Ms. Wasserman Schultz, aye. Mr. Chairman?
    Chairman Sensenbrenner. No.
    The Clerk. Mr. Chairman, no.
    Mr. Coble. Mr. Chairman?
    Chairman Sensenbrenner. Further Members who wish to cast or 
change their vote? The gentleman from North Carolina, Mr. 
Coble.
    Mr. Coble. If ``woof'' is aye, I vote aye.
    The Clerk. Mr. Coble, aye.
    Chairman Sensenbrenner. The gentleman from South Carolina, 
Mr. Inglis?
    Mr. Inglis. No.
    The Clerk. Mr. Inglis, no.
    Chairman Sensenbrenner. The gentleman from Massachusetts, 
Mr. Delahunt?
    Mr. Delahunt. Woof.
    The Clerk. Mr. Delahunt, aye.
    Chairman Sensenbrenner. Further Members who wish to cast or 
change their votes? If not, the clerk will report.
    The Clerk. Mr. Chairman, there are 15 ayes and 21 nays.
    Chairman Sensenbrenner. And the amendment is not agreed to.
    Are there further second-degree amendments to the amendment 
in the nature of a substitute?
    Mr. Wexler. Mr. Chairman?
    Chairman Sensenbrenner. The gentleman from Florida, Mr. 
Wexler.
    Mr. Wexler. I have one other amendment, please.
    Chairman Sensenbrenner. The clerk will report the 
amendment.
    The Clerk. Amendment to the Goodlatte amendment in the 
nature of a substitute to H.R. 4777, offered by Mr. Wexler of 
Florida. Beginning on page 11, strike line 6 and all that 
follows through line----
    Chairman Sensenbrenner. Without objection, the amendment is 
considered as read.
    [The amendment follows:]
    
    
    Chairman Sensenbrenner. The gentleman from Florida is 
recognized for 5 minutes.
    Mr. Wexler. Thank you, Mr. Chairman.
    This amendment is, in effect, the identical amendment that 
Mr. Cannon in the past had filed. I will not repeat the 
arguments of the past debate. I will simply point out what, in 
effect, this amendment would do.
    This amendment would strike sections 5 and 6, which is page 
16, the last page of the bill. In effect, if this amendment 
were adopted, we would do exactly what Mr. Goodlatte said we're 
out to do: send the Senate a clean bill that does all the 
proper law enforcement objectives that Mr. Goodlatte outlined. 
What we won't do is protect a certain industry.
    If things were exactly as Mr. Goodlatte argued they were, 
why do we need not only section 5, which says this tough law 
enforcement bill that we're about to pass shouldn't be 
construed to prohibit any behavior that's allowed under another 
statute, and number 6, which is the sense of Congress, simply 
says even though we just passed a great law enforcement bill 
and we're going after all these offshore online gambling guys, 
we don't want anyone to think that Congress wishes to change 
activities already related to horse racing, which may or may 
not be allowed under Federal law?
    Well, nobody, I don't think, here reasonably believes that 
this bill is going to shut down Yonkers Race Track, do we? Do 
we think we're shutting down horse track betting in the United 
States of America? Of course we're not. What might we be doing 
if numbers 5--section 5 and 6 weren't in this bill? We might 
truly be limiting online gambling. What a thought.
    Let's at least be honest. Let's at least be pure. Either 
shut it all down or let all the legal businesses do it. I would 
prefer to let all the legal businesses do it, but I lost that 
vote. So having lost that vote, now I'm simply offering what 
Mr. Cannon in the past has offered, which is don't even give 
anybody the opportunity to make the argument that horses 
somehow fall under an exemption because we passed this bill so 
many years ago before the Internet was even around. If you're 
against expansion for gambling, you must vote for this 
amendment. If you are not against necessarily the expansion of 
gambling but think that if it is going to be permitted, it 
should be permitted in an equitable way, you should be for this 
amendment, too.
    Thank you, Mr. Chairman.
    Chairman Sensenbrenner. Does the gentleman yield back?
    Mr. Goodlatte. Mr. Chairman?
    Chairman Sensenbrenner. The gentleman from Virginia, Mr. 
Goodlatte.
    Mr. Goodlatte. Mr. Chairman, I move to strike the last 
word.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Goodlatte. Mr. Chairman, I strongly oppose this 
amendment. This amendment would infringe on the State's rights 
and is the proverbial poison pill of this bill, regardless of 
the intentions of the gentleman from Florida in offering it. 
Forty-nine of 50 States Attorney General have come out in 
support of a ban on Internet gambling. This amendment restricts 
the rights of the States to continue to permit certain types of 
gambling within their borders and threatens to derail the bill 
by removing State support for the bill. States have always had 
the right to allow or prohibit gambling activities within their 
borders. This legislation continues to ensure that States have 
that right while imposing strict safeguards to ensure that the 
activity stays within State borders and does not extend to 
other States.
    These safeguards include requiring that the bettor, the 
gambling business, any facility processing bets and wagers, and 
any support service all be physically located within the 
authorizing State and that age and residency requirements are 
effective and in place. Furthermore, it ensures that a State 
explicitly authorizes each type of gambling activity and the 
gambling business and facilities and support services 
processing the bets or wagers.
    As an additional protection, H.R. 4777 gives new authority 
to the Federal, State, local, and tribal law enforcement to 
enforce the provisions of this bill to ensure that States 
comply with the intrastate safeguards established in the bill 
and that the law is enforced to the greatest extent possible.
    For example, if the Virginia lottery were to cross State 
lines and communicate information assisting in the placing of 
bets or wagers to citizens in North Carolina, then North 
Carolina's Attorney General could obtain injunctive relief to 
prevent such activities and would have the incentive to do so. 
This amendment would eliminate all of these explicit 
protections in H.R. 4777 which ensure that legal gambling stays 
within the State that provided for it.
    In addition, the gentleman again raises the horse racing 
industry. This bill does not have a carveout for horse racing. 
Horse racing is unique because for almost 30 years Congress has 
passed the Interstate Horse Racing Act, which provides rules 
for horse racing-related betting across State lines, in States 
where that conduct is legal.
    While that act addresses those activities, there is, as I 
said before, an ongoing dispute with the Department of Justice 
and the horse racing industry as to whether these activities 
would be prohibited by certain other Federal statutes. All of 
the language that Mr. Cannon and I have put in the bill at the 
request of the United States Department of Justice is being 
struck by the gentleman from Florida in this amendment. H.R. 
4777 does not alter this ongoing debate one way or the other. 
The bill recognizes that the act is in existence without taking 
any sides in the dispute between the Department of Justice and 
the horse racing industry. This amendment clearly is nothing 
more than a poison pill to kill the legislation.
    For the past two Congresses, this amendment or one very 
similar was narrowly adopted by the Committee. After this 
amendment was adopted in both the previous Congresses, the 
legislation was stopped dead in its tracks and progressed no 
further than the Committee. Had this legislation passed in the 
107th Congress, we would not be here talking about all the ills 
of Internet gambling once again. We would not have seen the 
industry quadruple. In fact, Internet gambling has exploded in 
volume since then. This is the poison pill that was promoted by 
Jack Abramoff 5 years ago. Don't support it today.
    Mr. Cannon. Would the gentleman yield? The gentleman from 
Virginia yield? Mr. Goodlatte, would you yield?
    Mr. Goodlatte. I yield to the gentleman.
    Mr. Cannon. Thank you. Listen, unfortunately, the gentleman 
just mentioned by the gentleman from Virginia had some 
involvement in this issue sometime before. I don't think that 
was the--what was happening, and as the gentleman from Florida 
had just suggested, I was deeply involved in this issue in the 
past, and I would just suggest to the gentleman from Florida, 
if you wish to introduce a bill to eliminate horse racing in 
America, I will be your prime cosponsor. So if you'd just let 
me know about that, we'll try and take care of your concerns in 
a way that is direct instead of a way that would impede the 
advance of this bill that would constrain and control gambling 
on the Internet.
    Thank you, Mr. Goodlatte.
    Mr. Goodlatte. Reclaiming my time, let me just say to the 
gentleman from Utah, I very much appreciate those comments, and 
as we have noted before, this is a new bill and a new day, and 
those who have expressed concerns in the past that are 
legitimate have been addressed. This undoes all the concerns 
that the gentleman from Utah worked to accomplish in the bill.
    Mr. Cannon. That's exactly the case, and I yield back.
    Chairman Sensenbrenner. Does the gentleman from Virginia 
yield back?
    Mr. Goodlatte. Sorry, Mr. Chairman. Yes, I yield back.
    Chairman Sensenbrenner. For what purpose does the gentleman 
from California, Mr. Schiff, seek recognition?
    Mr. Schiff. Mr. Chairman, move to strike the last word.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Schiff. Mr. Chairman, I think we're at risk of beating 
a dead horse here, so I'm going to yield to the gentleman from 
Florida if he promises not to take the full 5 minutes.
    Mr. Wexler. Forty-five seconds. Section 5 and section 6 of 
this bill do nothing other than relate to the horse racing 
industry. If we were not seeking to protect the horse racing 
industry in this bill, there'd be no reason for section 5 and 
section 6. All this amendment does is strike them. You've got 
all your law enforcement provisions left in there. It just 
takes out the protection for a certain industry.
    That's it. I'm done.
    Mr. Schiff. Mr. Chairman, I yield back.
    Chairman Sensenbrenner. Thank you.
    The question is on agreeing to the Wexler amendment in the 
second degree to the amendment in the nature of a substitute 
offered by the gentleman from Virginia, Mr. Goodlatte. Those in 
favor will say aye? Opposed, no?
    The noes appear to have it. The noes have it. The amendment 
is not agreed to.
    Are there further amendments?
    Mr. Conyers. Mr. Chairman, I have an amendment at----
    Chairman Sensenbrenner. The clerk will report the 
amendment.
    The Clerk. Amendment to the Manager's Amendment to H.R. 
4777, offered by Mr. Conyers. On page 16, line 4----
    Mr. Conyers. Mr. Chairman, I ask unanimous consent the 
amendment be considered as read.
    Chairman Sensenbrenner. Without objection, so ordered.
    [The amendment follows:]
    
    
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Conyers. Ladies and gentlemen of the Committee, this is 
a straightforward amendment that makes sure underage kids 
cannot gamble on the Internet, whether it is interstate or 
intrastate. This is something that I hope all Members can agree 
on on a bipartisan basis. To me, children being taken advantage 
of on the Internet is one of the most important things that we 
can do as a Committee to prevent. They should not be taken 
advantage of whether it's with regard to gambling, pornography, 
or in any other respect. Children should be off limits to 
predators of any form on the Internet.
    The problem is, as currently drafted, the bill has a 
loophole. Intrastate bets have protections for children, and 
ironically, interstate bets, which is squarely within our 
congressional jurisdiction, are left out. My concerns are not 
hypothetical. The Baltimore Sun just ran an article where the 
horse racing industry admitted that they hoped to prosper by 
reaching out to underage children, and I'd like to ask 
unanimous consent to enter this article into the record.
    Mr. Smith. [Presiding.] Without objection, the article will 
be a part of the record.
    [The article follows:]
    
    
    Mr. Conyers. In conclusion, to me this isn't right. We 
ought to make sure that this legislation, which is purportedly 
designed to limit Internet gambling, does not actually 
encourage it, especially for children. The last thing we should 
be doing as a Congress is putting children at risk on the 
Internet. My amendment would eliminate the loophole in the bill 
for interstate bets by children. I ask the Members of the 
Committee to join me in supporting this common-sense----
    Ms. Jackson Lee. Would the gentleman yield?
    Mr. Conyers. Of course.
    Ms. Jackson Lee. Let me say to the gentleman that that is 
the clearest pronouncement, if you will, of where I think all 
of us are trying to go, and I thank the gentleman for offering 
such an instructive and insightful amendment.
    From MySpace to OurSpace, we know that children are on the 
Internet, and we also know that they're victims of the 
Internet. So I thank the gentleman for offering that amendment, 
and as we could cite any number of statistics, all we have to 
do is go to Missing and Exploited Children's website to know 
how children are victimized. It's a very important amendment, 
and I thank the gentleman and----
    Mr. Conyers. I thank the gentlelady.
    Ms. Jackson Lee.--I hope that they will support it. I yield 
back.
    Mr. Conyers. I yield back my time.
    Chairman Sensenbrenner. The gentleman from Virginia, Mr. 
Goodlatte.
    Mr. Goodlatte. Mr. Chairman, I speak in opposition to----
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Goodlatte. First of all, I commend the gentleman from 
Michigan for his effort to keep children from being able to 
gamble on the Internet. However, this is injecting itself once 
again into the issue of horse racing because this relates to 
the interpretation under the separate Federal statute, the 
Interstate Horse Racing Act, and I believe that the language in 
this amendment, which says that the State has explicitly 
authorized placing such wagers contradicts the actions of a 
number of States that have cooperated in that regard. And I 
think that this Committee should again stay out of this 
specific issue with regard to this measure and let that be 
resolved between the Department of Justice and those who have 
participated in this activity. The Department of Justice is 
satisfied with the language that they have in this legislation, 
protecting their right to take that action if they determine to 
do so, and I would, therefore, urge my colleague to oppose it.
    Mr. Conyers. Would the gentleman yield for a moment?
    Mr. Goodlatte. Yes.
    Mr. Conyers. Thank you. Today, only 17 States have 
expressly authorized the placement of advance deposit horse 
bets, including Internet bets. Yet one provider of Internet 
horse betting services, Youbet, takes bets from over 40 States, 
Mr. Goodlatte, despite having received cease-and-desist letters 
from the Attorneys General. And that's why I'm trying to make 
this very clear that it's not a carveout or it's not a penalty 
to anybody, but we've got to protect our kids better than we're 
doing right now.
    Mr. Goodlatte. I appreciate the gentleman's comments on 
that. I would just say that we have to let the Department of 
Justice do its job, and I think they have certainly, by their 
engagement on this issue, their testimony before this 
Committee, gotten that message. And so I appreciate the 
gentleman's effort to reinforce it, but I do not think that 
this legislation is the place to get into this issue.
    Chairman Sensenbrenner. Does the gentleman yield back?
    Mr. Goodlatte. I do.
    Chairman Sensenbrenner. The question is on the Conyers 
amendment. Those in favor will say aye? Opposed, no?
    The noes appear to have it----
    Mr. Conyers. A record vote is requested.
    Chairman Sensenbrenner. A rollcall is ordered. Those in 
favor of the Conyers amendment in the second degree to the 
amendment in the nature of a substitute offered by the 
gentleman from Virginia, Mr. Goodlatte, will as your names are 
called answer aye, those opposed no, and the clerk will call 
the roll.
    The Clerk. Mr. Hyde?
    [No response.]
    The Clerk. Mr. Coble?
    [No response.]
    The Clerk. Mr. Smith?
    Mr. Smith. No.
    The Clerk. Mr. Smith, no. Mr. Gallegly?
    [No response.]
    The Clerk. Mr. Goodlatte?
    Mr. Goodlatte. No.
    The Clerk. Mr. Goodlatte, no. Mr. Chabot?
    [No response.]
    The Clerk. Mr. Lungren?
    [No response.]
    The Clerk. Mr. Jenkins?
    Mr. Jenkins. No.
    The Clerk. Mr. Jenkins, no. Mr. Cannon?
    Mr. Cannon. No.
    The Clerk. Mr. Cannon, no. Mr. Bachus?
    [No response.]
    The Clerk. Mr. Inglis?
    Mr. Inglis. No.
    The Clerk. Mr. Inglis, no. Mr. Hostettler?
    Mr. Hostettler. No.
    The Clerk. Mr. Hostettler, no. Mr. Green?
    Mr. Green. Pass.
    The Clerk. Mr. Green, pass. Mr. Keller?
    Mr. Keller. No.
    The Clerk. Mr. Keller, no. Mr. Issa?
    Mr. Issa. Pass.
    The Clerk. Mr. Issa, pass. Mr. Flake?
    [No response.]
    The Clerk. Mr. Pence?
    Mr. Pence. No.
    The Clerk. Mr. Pence, no. Mr. Forbes?
    Mr. Forbes. No.
    The Clerk. Mr. Forbes, no. Mr. King?
    Mr. King. Pass.
    The Clerk. Mr. King, pass. Mr. Feeney?
    Mr. Feeney. No.
    The Clerk. Mr. Feeney, no. Mr. Franks?
    [No response.]
    The Clerk. Mr. Gohmert?
    Mr. Gohmert. Pass.
    The Clerk. Mr. Gohmert, pass. Mr. Conyers?
    Mr. Conyers. Aye.
    The Clerk. Mr. Conyers, aye. Mr. Berman?
    Mr. Berman. Aye.
    The Clerk. Mr. Berman, aye. Mr. Boucher?
    Mr. Boucher. No.
    The Clerk. Mr. Boucher, no. Mr. Nadler?
    [No response.]
    The Clerk. Mr. Scott?
    Mr. Scott. Aye.
    The Clerk. Mr. Scott, aye. Mr. Watt?
    Mr. Watt. Aye.
    The Clerk. Mr. Watt, aye. Ms. Lofgren?
    Ms. Lofgren. Aye.
    The Clerk. Ms. Lofgren, aye. Ms. Jackson Lee?
    [No response.]
    The Clerk. Ms. Waters?
    Ms. Waters. Aye.
    The Clerk. Ms. Waters, aye. Mr. Meehan?
    [No response.]
    The Clerk. Mr. Delahunt?
    [No response.]
    The Clerk. Mr. Wexler?
    Mr. Wexler. Aye.
    The Clerk. Mr. Wexler, aye. Mr. Weiner?
    Mr. Weiner. Aye.
    The Clerk. Mr. Weiner, aye. Mr. Schiff?
    Mr. Schiff. Aye.
    The Clerk. Mr. Schiff, aye. Ms. Sanchez?
    Ms. Sanchez. Aye.
    The Clerk. Ms. Sanchez, aye. Mr. Van Hollen?
    Mr. Van Hollen. Aye.
    The Clerk. Mr. Van Hollen, aye. Ms. Wasserman Schultz?
    Ms. Wasserman Schultz. Aye.
    The Clerk. Ms. Wasserman Schultz, aye. Mr. Chairman?
    Chairman Sensenbrenner. No.
    The Clerk. Mr. Chairman, no.
    Chairman Sensenbrenner. Further Members who wish to cast or 
change their vote? The gentleman from North Carolina, Mr. 
Coble.
    Mr. Coble. No.
    The Clerk. Mr. Coble, no.
    Chairman Sensenbrenner. The gentleman from California, Mr. 
Issa.
    Mr. Issa. No.
    The Clerk. Mr. Issa, no.
    Chairman Sensenbrenner. The gentleman from Wisconsin, Mr. 
Green.
    Mr. Green. Aye.
    The Clerk. Mr. Green, aye.
    Chairman Sensenbrenner. Further Members who wish to cast 
or--the gentleman from Massachusetts, Mr. Delahunt.
    Mr. Delahunt. Aye.
    The Clerk. Mr. Delahunt, aye.
    Chairman Sensenbrenner. The gentleman from Ohio, Mr. 
Chabot.
    Mr. Chabot. No.
    The Clerk. Mr. Chabot, no.
    Chairman Sensenbrenner. The gentleman from Iowa, Mr. King.
    Mr. King. No.
    The Clerk. Mr. King, no.
    Chairman Sensenbrenner. The gentleman from California, Mr. 
Lungren.
    Mr. Lungren. No.
    The Clerk. Mr. Lungren, no.
    Chairman Sensenbrenner. Further Members who wish to cast or 
change their vote? If not, the clerk will report.
    The Clerk. Mr. Chairman, there are 14 ayes, 17 nays, and 
two present.
    Chairman Sensenbrenner. And the amendment is not agreed to.
    Are there further amendments? The gentleman from Virginia, 
Mr. Scott, for what purpose do you seek recognition?
    Mr. Scott. Mr. Chairman, I move to strike the last word.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Scott. Mr. Chairman, if I could get the attention of my 
colleague from Virginia, Mr. Chairman, as my statement 
indicated, my opening statement indicated, I've been critical 
of the requirements imposed on the banking industry because my 
view is that those requirements are overburdensome and probably 
ineffective. Those same concerns were highlighted in a letter 
that was forwarded to the Committee from the Chamber of 
Commerce of the United States just yesterday. I had amendments 
to address some of these concerns, but it's my understanding, 
Mr. Chairman, that my colleague from Virginia, Mr. Goodlatte, 
has been working with the industry, and so I would inquire to 
him if it is his intention to continue working with the banking 
industry and business groups to try to address many of their 
concerns.
    I yield to the gentleman from Virginia.
    Mr. Goodlatte. I thank the gentleman from Virginia for 
yielding, and yes, indeed, we have been discussing and will 
continue to discuss with representatives of various aspects of 
the banking industry the most appropriate way to ensure that 
funds are not transferred to these offshore sites illegally 
taking bets from the United States, but not do so in a way that 
is disruptive to their businesses, particularly small banks.
    As the gentleman may know, this legislation differs from 
the legislation offered in the Financial Services Committee, 
which is more of a regulatory approach. Ours is injunctive 
relief, and when a law enforcement entity seeks injunctive 
relief and goes to the court to ask them to require a bank to 
do certain things, there are many tests that the court applies. 
Two of those are the cost of compliance and the ease with which 
it can be complied with. And so we believe that there are 
protections existing already, but we would be happy to work to 
see if additional ones can be achieved. And it is not set forth 
in the bill that any of the--some of the things that have been 
cited as things that banks would have to do, they're not 
contained in the bill. That is speculation. But we can work to 
try to ease those concerns.
    Mr. Scott. Reclaiming my time, Mr. Chairman, I have another 
amendment. Could I yield back on this and then seek----
    Chairman Sensenbrenner. The gentleman yields back his time. 
For what purpose does the gentleman from Virginia seek 
recognition?
    Mr. Scott. Mr. Chairman, I have an amendment at the desk.
    Chairman Sensenbrenner. The clerk will report the 
amendment.
    The Clerk. Amendment to the Goodlatte amendment in the 
nature of a substitute to H.R. 4777, offered by Mr. Scott of 
Virginia. Page 15, line 16, strike close quotation mark and the 
period which----
    Chairman Sensenbrenner. Without objection, the amendment is 
considered as read.
    [The amendment follows:]
      
      

  


    Chairman Sensenbrenner. The gentleman from Virginia is 
recognized for 5 minutes.
    Mr. Scott. Thank you, Mr. Chairman.
    Mr. Chairman, this simply states that whoever knowingly 
places a bet or wager with a gambling business, using a 
communication facility in or affecting interstate or foreign 
commerce, shall, in the transmission--if the transmission is 
unlawful, they would be fined or imprisoned. This bill--this 
amendment addresses the fact that the bill does not prohibit 
Internet gambling, notwithstanding the title. It prohibits 
running the operation.
    Now, if we're going to be effective in prosecuting illegal 
gambling over the Internet, we should prosecute individual 
gamblers. A few sting operations would get the word around that 
if you gamble over the Internet, you're at the mercy of law 
enforcement because you will leave a paper trail. So long as 
individuals can gamble over the Internet with impunity, a 
market will be provided for them, which the regulatory scheme 
in this bill will not stop. This amendment, Mr. Chairman, just 
simply conforms the substance of the bill to the bill title and 
addresses all of the concerns that have been expressed, such as 
those articulated by the gentleman from Texas, Mr. Smith, about 
the concerns of Internet gambling. This would prohibit gambling 
on the Internet, plain and simple.
    I yield back.
    Mr. Goodlatte. Mr. Chairman?
    Chairman Sensenbrenner. The gentleman from Virginia, Mr. 
Goodlatte.
    Mr. Goodlatte. Move to strike the last word.
    Chairman Sensenbrenner. The gentleman's recognized for 5 
minutes.
    Mr. Goodlatte. Thank you, Mr. Chairman.
    Mr. Chairman, I speak in opposition to this amendment. The 
current Wire Act targets entities engaged in a gambling 
enterprise. The gentleman correctly notes that this 
modernization of the Wire Act does the same thing. It does not 
target individual bettors. The legislation is meant to help 
prevent gambling businesses that may be legal in one State from 
circumventing the laws of others that prohibit gambling 
activities, and particularly offshore enterprises that are 
doing that.
    Gambling laws have traditionally been left to the 
individual States to decide. Some States already have on the 
books to prohibit individuals from betting. In fact, most 
States do, unless it is within a regulated gambling enterprise. 
Other States have decided that individuals within their borders 
should be allowed to gamble.
    Regulating an individual's conduct is a matter that should 
continue to be left to the States where enforcement is more 
likely and appropriate. When States have technical or 
jurisdictional problems enforcing these laws, then the Federal 
Government has come in to assist the States in their efforts. 
This legislation is another effort to do just that. The 
Internet presents a serious jurisdictional problem for 
enforcing State gambling laws. Thus, this legislation is needed 
to ensure that the legal intrastate gambling activity continues 
to stay wholly within the borders of the State that allows it.
    In addition, this bill would help prevent offshore, fly-by-
night gambling businesses from violating the laws of all States 
by making clear that all technologies, not just the phone 
lines, are covered and that all forms of gambling, not just 
sports-related bets, are illegal under the Wire Act. This 
clarity is what the Department of Justice needs to bring 
prosecutions against these offshore operations and against 
those businesses within the United States that violate State 
prohibitions on gambling. We should not get involved in what 
has always historically been the province of the States in 
deciding whether or not the activities of individual bettors 
should be legal or illegal, and I urge my colleagues to oppose 
the amendment.
    Chairman Sensenbrenner. Does the gentleman yield back?
    Mr. Goodlatte. I yield back.
    Chairman Sensenbrenner. The question is----
    Mr. Watt. Mr. Chairman?
    Chairman Sensenbrenner. The gentleman from North Carolina, 
Mr. Watt, for what purpose do you seek recognition?
    Mr. Watt. Move to strike the last word.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. Watt. Mr. Chairman, I am going to vote against Mr. 
Scott's amendment, but I rise to speak because it does make the 
point that a number of people have been making. I think the 
proponents of this bill want to have their cake and eat it, 
too. And you can't do that. I mean, you either got to go with 
gambling or you got to leave it alone, in my opinion. So I 
just--I think Mr. Scott's amendment--I guess if I voted for it, 
it would be voting for something I don't support because I 
didn't like the bill that I don't support either. So I guess my 
best course of action is to vote against both of them and let 
it go at that.
    And with that, I'll yield back the balance of my time, 
having told my good colleague from Virginia what I'm going to 
do on his bill and why--on his amendment. Thanks.
    Chairman Sensenbrenner. The question is on the amendment 
offered by the gentleman from Virginia, Mr. Scott, as a second-
degree amendment to the amendment in the nature of a substitute 
offered by the gentleman from Virginia, Mr. Goodlatte. Those in 
favor will say aye.
    Opposed, no.
    The noes appear to have it. They have it and the amendment 
is not----
    Mr. Scott. Recorded vote, please.
    Chairman Sensenbrenner. Recorded vote is ordered. Those in 
favor of the Scott amendment to the Goodlatte amendment, will, 
as your names are called, answer aye, those opposed no, and the 
clerk will call the roll.
    The Clerk. Mr. Hyde?
    [No response.]
    The Clerk. Mr. Coble?
    Mr. Coble. No.
    The Clerk. Mr. Coble, no. Mr. Smith?
    Mr. Smith. No.
    The Clerk. Mr. Smith, no. Mr. Gallegly?
    Mr. Gallegly. No.
    The Clerk. Mr. Gallegly, no. Mr. Goodlatte?
    Mr. Goodlatte. No.
    The Clerk. Mr. Goodlatte, no. Mr. Chabot?
    Mr. Chabot. No.
    The Clerk. Mr. Chabot, no. Mr. Lungren?
    Mr. Lungren. No.
    The Clerk. Mr. Lungren, no. Mr. Jenkins?
    Mr. Jenkins. No.
    The Clerk. Mr. Jenkins, no. Mr. Cannon?
    Mr. Cannon. No.
    The Clerk. Mr. Cannon, no. Mr. Bachus?
    Mr. Bachus. No.
    The Clerk. Mr. Bachus, no. Mr. Inglis?
    [No response.]
    The Clerk. Mr. Hostettler?
    Mr. Hostettler. No.
    The Clerk. Mr. Hostettler, no. Mr. Green?
    Mr. Green. Aye.
    The Clerk. Mr. Green, aye. Mr. Keller?
    Mr. Keller. No.
    The Clerk. Mr. Keller, no. Mr. Issa?
    Mr. Issa. No.
    The Clerk. Mr. Issa, no. Mr. Flake?
    [No response.]
    The Clerk. Mr. Pence?
    Mr. Pence. No.
    The Clerk. Mr. Pence, no. Mr. Forbes?
    Mr. Forbes. No.
    The Clerk. Mr. Forbes, no. Mr. King?
    Mr. King. No.
    The Clerk. Mr. King, no. Mr. Feeney?
    Mr. Feeney. No.
    The Clerk. Mr. Feeney, no. Mr. Franks?
    Mr. Franks. No.
    The Clerk. Mr. Franks, no. Mr. Gohmert?
    [No response.]
    The Clerk. Mr. Conyers?
    Mr. Conyers. Aye.
    The Clerk. Mr. Conyers, aye. Mr. Berman?
    Mr. Berman. Aye.
    The Clerk. Mr. Berman, aye. Mr. Boucher?
    Mr. Boucher. No.
    The Clerk. Mr. Boucher, no. Mr. Nadler?
    [No response.]
    The Clerk. Mr. Scott?
    Mr. Scott. Aye.
    The Clerk. Mr. Scott, aye. Mr. Watt?
    Mr. Watt. No.
    The Clerk. Mr. Watt, no. Ms. Lofgren?
    [No response.]
    The Clerk. Ms. Jackson Lee?
    Ms. Jackson Lee. No.
    The Clerk. Ms. Jackson Lee, no. Ms. Waters?
    Ms. Waters. No.
    The Clerk. Ms. Waters, no. Mr. Meehan?
    [No response.]
    The Clerk. Mr. Delahunt?
    [No response.]
    The Clerk. Mr. Wexler?
    [No response.]
    The Clerk. Mr. Weiner?
    Mr. Weiner. Pass.
    The Clerk. Mr. Weiner, pass. Mr. Schiff?
    Mr. Schiff. Pass.
    The Clerk. Mr. Schiff, pass. Ms. Sanchez?
    Ms. Sanchez. Pass.
    The Clerk. Ms. Sanchez, pass. Mr. Van Hollen?
    Mr. Van Hollen. No.
    The Clerk. Mr. Van Hollen, no. Mrs. Wasserman Schultz?
    Ms. Wasserman Schultz. No.
    The Clerk. Ms. Wasserman Schultz, no. Mr. Chairman?
    Chairman Sensenbrenner. No.
    The Clerk. Mr. Chairman, no.
    Chairman Sensenbrenner. Further Members wish to cast or 
change their votes? Gentleman from South Carolina, Mr. Inglis?
    Mr. Inglis. No.
    The Clerk. Mr. Inglis, no.
    Chairman Sensenbrenner. Gentleman from California, Mr. 
Schiff?
    Mr. Schiff. No.
    The Clerk. Mr. Schiff, no.
    Chairman Sensenbrenner. Gentlewoman from California, Ms. 
Lofgren?
    Ms. Lofgren. Aye.
    The Clerk. Ms. Lofgren, aye.
    Chairman Sensenbrenner. Further Members who wish to cast or 
change--gentleman from Florida, Mr. Wexler?
    Mr. Wexler. No.
    The Clerk. Mr. Wexler, no.
    Chairman Sensenbrenner. Further Members who wish to cast or 
change their votes? Gentleman from Texas, Mr. Gohmert.
    Mr. Gohmert. Yes.
    The Clerk. Mr. Gohmert, yes.
    Chairman Sensenbrenner. Gentleman from New York, Mr. 
Weiner?
    Mr. Weiner. No.
    The Clerk. Mr. Weiner, no.
    Chairman Sensenbrenner. Further Members who wish to cast or 
change their vote? Gentlewoman from California, Ms. Sanchez?
    Ms. Sanchez. No.
    The Clerk. Ms. Sanchez, no.
    Chairman Sensenbrenner. Further Members who wish to cast or 
change their votes? If not, the clerk will--gentleman from 
Massachusetts, Mr. Delahunt?
    Mr. Delahunt. No.
    The Clerk. Mr. Delahunt, No.
    Chairman Sensenbrenner. The clerk will try again.
    [Pause.]
    The Clerk. Mr. Chairman, there are 6 ayes and 30 nays.
    Chairman Sensenbrenner. And the amendment is not agreed to. 
Are there further amendments to the amendment in the nature of 
a substitute? If not, the question occurs on agreeing to the 
Goodlatte----
    Mr. King. Mr. Chairman? Mr. Chairman, over here on your 
right.
    Chairman Sensenbrenner. Gentleman from Iowa, Mr. King.
    Mr. King. Thank you. I move to strike the last word.
    Chairman Sensenbrenner. The gentleman is recognized for 5 
minutes.
    Mr. King. Thank you, Mr. Chairman. I will be brief, but I 
wanted to bring up a point here.
    And first I want to congratulate Mr. Goodlatte for his work 
on this, and I'm a proud cosponsor of this underlying bill. I 
speak in support of the substitute amendment and the underlying 
bill.
    And I also speak at a point of clarification I think that 
needs to be emphasized, and that is that the prohibition for 
Internet online lottery sales is the prohibition that limits 
those requirements to being age verifications and residency 
verifications. And that is in the bill currently. It's 
impossible to circumvent that with current technology, and I 
just wish to stipulate that the intent of this language, as I 
understand it, is to prohibit and not to allow the Internet 
online lottery sales, and I hope to continue to monitor this 
situation, but I'm fully in support of the bill and the intent 
of the language that's there, and I congratulate and thank the 
gentleman from Virginia for his work, and I intend to support 
the bill.
    Thank you, and I yield back.
    Chairman Sensenbrenner. The question is on agreeing to the 
Goodlatte amendment in the nature of a substitute as amended. 
All in favor will aye.
    Opposed no.
    The ayes appear to--the ayes appear to have it. The ayes 
have it. The amendment in the nature of a substitute as amended 
is agreed to.
    Mr. Conyers. A record vote is----
    Ms. Jackson Lee. Mr. Chairman?
    Chairman Sensenbrenner. The request for a record vote is 
withdrawn. The question now occurs on the motion----
    Ms. Jackson Lee. Mr. Chairman?
    Chairman Sensenbrenner. For what purpose does the 
gentlewoman from Texas seek recognition?
    Ms. Jackson Lee. While the bill is open, I'd like to 
indicate that if I had been present--I was detained--I would 
have voted aye on the Conyers amendment regarding children. I'd 
like it placed in the record.
    Chairman Sensenbrenner. Would the gentlewoman yield back 
the balance?
    Ms. Jackson Lee. Yield back.
    Chairman Sensenbrenner. A reporting quorum is present. The 
question occurs on the motion to report the bill, H.R. 4777, 
favorably as amended. All in favor will say aye.
    Opposed, no.
    The ayes appear to have it. The ayes have it, and the 
motion to report favorably is----
    Mr. Conyers. Record vote is requested.
    Chairman Sensenbrenner. Record vote is requested. Those in 
favor of reporting the bill favorably as amended, will, as your 
names are called, answer aye, those opposed no, and the clerk 
will call the roll.
    The Clerk. Mr. Hyde?
    [No response.]
    The Clerk. Mr. Coble?
    Mr. Coble. Aye.
    The Clerk. Mr. Coble, aye. Mr. Smith?
    Mr. Smith. Aye.
    The Clerk. Mr. Smith, aye. Mr. Gallegly?
    Mr. Gallegly. Aye.
    The Clerk. Mr. Gallegly, aye. Mr. Goodlatte?
    Mr. Goodlatte. Aye.
    The Clerk. Mr. Goodlatte, aye. Mr. Chabot?
    Mr. Chabot. Aye.
    The Clerk. Mr. Chabot, aye. Mr. Lungren?
    Mr. Lungren. Aye.
    The Clerk. Mr. Lungren, aye. Mr. Jenkins?
    Mr. Jenkins. Aye.
    The Clerk. Mr. Jenkins, aye. Mr. Cannon?
    Mr. Cannon. Aye.
    The Clerk. Mr. Cannon, aye. Mr. Bachus?
    Mr. Bachus. Aye.
    The Clerk. Mr. Bachus, aye. Mr. Inglis?
    Mr. Inglis. Aye.
    The Clerk. Mr. Inglis, aye. Mr. Hostettler?
    Mr. Hostettler. Aye.
    The Clerk. Mr. Hostettler, aye. Mr. Green?
    Mr. Green. Aye.
    The Clerk. Mr. Green, aye. Mr. Keller?
    Mr. Keller. Aye.
    The Clerk. Mr. Keller, aye. Mr. Issa?
    Mr. Issa. Aye.
    The Clerk. Mr. Issa, aye. Mr. Flake?
    [No response.]
    The Clerk. Mr. Pence?
    Mr. Pence. Aye.
    The Clerk. Mr. Pence, aye. Mr. Forbes?
    Mr. Forbes. Aye.
    The Clerk. Mr. Forbes, aye. Mr. King?
    Mr. King. Aye.
    The Clerk. Mr. King, aye. Mr. Feeney?
    Mr. Feeney. Aye.
    The Clerk. Mr. Feeney, aye. Mr. Franks?
    Mr. Franks. Aye.
    The Clerk. Mr. Franks, aye. Mr. Gohmert?
    Mr. Gohmert. Aye.
    [No response.]
    The Clerk. Mr. Conyers?
    Mr. Conyers. No.
    The Clerk. Mr. Conyers, no. Mr. Berman?
    Mr. Berman. No.
    The Clerk. Mr. Berman, no. Mr. Boucher?
    Mr. Boucher. Aye.
    The Clerk. Mr. Boucher, aye. Mr. Nadler?
    [No response.]
    The Clerk. Mr. Scott?
    Mr. Scott. No.
    The Clerk. Mr. Scott, no. Mr. Watt?
    Mr. Watt. No.
    The Clerk. Mr. Watt, no. Ms. Lofgren?
    Ms. Lofgren. No.
    The Clerk. Ms. Lofgren, no. Ms. Jackson Lee?
    Ms. Jackson Lee. No.
    The Clerk. Ms. Jackson Lee, no. Ms. Waters?
    Ms. Waters. Aye.
    The Clerk. Ms. Waters, aye. Mr. Meehan?
    [No response.]
    The Clerk. Mr. Delahunt?
    Mr. Delahunt. No.
    The Clerk. Mr. Delahunt, no. Mr. Wexler?
    Mr. Wexler. No.
    The Clerk. Mr. Wexler, no. Mr. Weiner?
    Mr. Weiner. No.
    The Clerk. Mr. Weiner, no. Mr. Schiff?
    Mr. Schiff. No.
    The Clerk. Mr. Schiff, no. Ms. Sanchez?
    Ms. Sanchez. No.
    The Clerk. Ms. Sanchez, no. Mr. Van Hollen?
    Mr. Van Hollen. Aye.
    The Clerk. Mr. Van Hollen, aye. Ms. Wasserman Schultz?
    Ms. Wasserman Schultz. Aye.
    The Clerk. Ms. Wasserman Schultz, aye. Mr. Chairman?
    Chairman Sensenbrenner. Aye.
    The Clerk. Mr. Chairman, Aye.
    Chairman Sensenbrenner. Any Members who wish to cast or 
change their votes? Gentleman from Texas, Mr. Gohmert?
    Mr. Gohmert. Aye.
    The Clerk. Mr. Gohmert, aye.
    Chairman Sensenbrenner. Further Members who wish to cast or 
change their vote? If not, the clerk will report.
    [Pause.]
    The Clerk. Mr. Chairman, there are 25 ayes and 11 nays.
    Chairman Sensenbrenner. And the bill as amended is 
favorably reported. Without objection, the bill will be 
reported favorably to the House in the form of a single 
amendment in the nature of a substitute, incorporating the 
amendments agreed to here today. Without objection, the staff 
will be directed to make any technical and conforming changes, 
and all Members will be given 2 days, as provided by the House 
rules, in which to submit additional dissenting supplemental or 
minority views.
    Mr. Scott. Mr. Chairman?
    Chairman Sensenbrenner. For what purpose is the gentleman 
from Virginia----
    Mr. Scott. Reserving the right to object just a moment. Mr. 
Chairman, I'd like unanimous consent to insert into the record 
a letter from Antigua outlining some WTO reservations about 
this legislation.
    Chairman Sensenbrenner. Without objection.
    The gentleman withdraws his reservation?
    Mr. Scott. Withdrawn.
    [Intervening business.]
    [Whereupon, at 1:53 p.m., the Committee was adjourned.]

                            DISSENTING VIEWS

    We, respectfully, submit the following set of dissenting 
views to express our serious concerns with H.R. 4777, the 
``Internet Gambling Prohibition Act,'' and the approach that it 
takes to deal with this very important issue.
    As an initial matter, instead of providing minors with 
greater protections, H.R. 4777 threatens to make it much easier 
for minors to utilize the services of online gambling companies 
that operate across state lines. In addition, the legislation 
has the potential to generate a substantial increase in acts of 
money laundering and undoubtedly will expose various banks and 
Internet service providers to excessive liability and 
burdensome regulations.
    According to the bill's lead sponsor, Representative Bob 
Goodlatte (R-VA), one of the primary purposes behind the 
introduction of H.R. 4777 was to stop online gambling from 
occurring.\1\ However, in its current form, the legislation 
only prohibits certain forms of online gambling while expressly 
permitting several other forms to proceed unfettered. 
Interestingly enough, these `special interest carve-outs' were 
the main focal point of a recent article in The Hill 
newspaper.\2\
---------------------------------------------------------------------------
    \1\ Hearing on H.R. 4777, the ``Internet Gambling Prohibition 
Act,'' before the Subcomittee on Crime, Terrorism and Homeland Security 
of the House Committee on the Judiciary, 109th Cong. (2006) (testimony 
of Rep. Goodlatte, Member, House Comm. on the Judiciary).
    \2\ Patrick O'Connor, Abramoff Gets Payback in Gaming Bill, The 
Hill, March 29, 2006, pg. 1.
---------------------------------------------------------------------------
    In that article, H.R. 4777 was compared to a similar 
Internet gambling bill that had been introduced by Rep. 
Goodlatte and defeated in a previous Congress. The article 
determined that,

          The same Internet gambling legislation Abramoff 
        fought so hard to defeat on behalf of a client that 
        helped states conduct lotteries over the Internet now 
        includes an exemption to protect those lotteries.\3\ 
        (emphasis added)
---------------------------------------------------------------------------
    \3\ Id.

    The article went on to point out that in addition to the 
exemption for lotteries, H.R. 4777 also includes language to 
protect wagering on interstate pari-mutuel betting on horse 
races from the scope of the bill's ban. \4\
---------------------------------------------------------------------------
    \4\ Id.
---------------------------------------------------------------------------
    These blanketed exemptions are obviously the byproduct of 
powerful gambling interests and can be directly traced back to 
three particular provisions of the bill--sections 3, 5 and 6. 
Section 3, for example, includes language which expressly 
exempts gambling on intrastate sanctioned activities, such as 
lotteries.
    Section 5, a late addition to the underlying text of the 
bill and only added during the course of the Full Committee's 
markup, incorporates a rule of construction which maintains 
that

          Nothing in this Act may be construed to prohibit any 
        activity that is allowed under Public Law 95-515 as 
        amended (15 U.S.C. 3001 et seq.).\5\ (emphasis added)
---------------------------------------------------------------------------
    \5\ See, Section 5 of H.R. 4777, the ``Internet Gambling 
Prohibition Act,'' as reported by the House Committee on the Judiciary, 
109th Cong. (2006).

    It's worth noting that it has been the longstanding 
position of members of the horse racing industry that Public 
Law 95-515 (often referred to as the ``Interstate Horseracing 
Act''), along with its subsequent amendments, provides 
individuals with the right to legally cast bets on interstate 
pari-mutuel horse racing contests.\6\
---------------------------------------------------------------------------
    \6\ Letter from Honorable William E. Moschella, Assistant Attorney 
General, U.S. Department of Justice to F. Jams Sensenbrenner, Chairman, 
House Committee on the Judiciary (May 24, 2006) (on file at the U.S. 
Department of Justice).
---------------------------------------------------------------------------
    Finally, Section 6 of the bill, which was also added during 
the course of the Full Committee's markup of the legislation, 
incorporates language expressing the Sense of Congress that,

          [H.R. 4777] does not change which activities related 
        to horse racing may or may not be allowed under Federal 
        law.\7\ (emphasis added)
---------------------------------------------------------------------------
    \7\ See, Section 6 of H.R. 4777, the ``Internet Gambling 
Prohibition Act,'' as reported by the House Committee on the Judiciary, 
109th Cong. (2006).

    In other words, this new language, in unmistakable terms, 
makes clear once-and-for-all that the scope of the bill's ban 
does not expressly prohibit online gambling on interstate 
competitions involving horse races.
    To fully understand the impact this exemption will have on 
Internet gambling companies who provide services in this 
sector, one only need to consider the public statements made by 
representatives of the horse racing industry the day after our 
full committee's markup of H.R. 4777. On that day, the National 
Thoroughbred Racing Association (NTRA) issued a press release 
that included the following:
    The House of Representatives Judiciary Committee on 
Thursday passed a bill sponsored by Representative Bob 
Goodlatte (R-VA) that would crack down on off-shore gambling 
and on gambling with the assistance of the Internet.

           *       *       *       *       *       *       *

    The bill includes an exemption that would allow the United 
States horse racing industry to continue to conduct interstate, 
account, and Internet wagering. (emphasis added)

           *       *       *       *       *       *       *

    ``Today was excellent news for the racing industry,'' said 
Greg Avioli, the NTRA's Executive Vice President. ``Not only 
did the bill pass by a significant margin, but three separate 
amendments to either slip out or substantially limit our 
exception were all defeated.''

           *       *       *       *       *       *       *

    ``Despite that opposition and close to 90 minutes of heated 
debate, we were able to prevail on every vote.''

           *       *       *       *       *       *       *

    ``For the horse racing industry, this is particularly 
important because having that exception allows horse racing to 
continue to operate interstate simulcasting and account 
wagering,'' Avioli said. ``If that bill would have passed 
without the exception in it, it would have effectively outlawed 
those activities.'' \8\ (emphasis added)
---------------------------------------------------------------------------
    \8\ NTRA Press Release available at http://www.ntra.com/
content.aspx?type=pac&id;=18064.
---------------------------------------------------------------------------
    These statements are reminiscent of comments made by the 
NTRA when a similar bill introduced by Congressman Goodlatte 
was considered in 2001. As reported by the National Journal:
          [Gregory Avioli] said that as a result of ``well-
        spent contributions we made in Washington to various 
        campaign committees, excellent work by our lobbyists, 
        and just a lot of time educating Congressman Goodlatte 
        and his staff, on the day before they introduced the 
        bill they went back and made one final revision to say, 
        `This does not apply to any wagering [conducted in 
        accordance] with the Interstate Horseracing Act.'' \9\
---------------------------------------------------------------------------
    \9\ Lobbying and Law--High Stakes on Web Gambling, The National 
Journal, May 13, 2006.
---------------------------------------------------------------------------
    It is for these reasons, and those that follow, that we 
respectfully dissent.

1. H.R. 4777 only bans certain forms of online gambling, while 
        legalizing many others

    H.R. 4777 proposes to address the concerns and problems 
created by Internet gambling by prohibiting those in the 
gambling business from transmitting or facilitating the 
placement of a bet or wager. However, despite its title and 
language, H.R. 4777 is not a prohibition on Internet gambling. 
Rather, the legislation is simply a regulatory bill that 
prohibits certain types of Internet gambling while expressly 
sanctioning others. The legislation expressly exempts (1) 
interstate Internet betting on horse racing; (2) intra-state 
Internet betting on lotteries; (3) intra-tribal Internet 
betting; and (4) certain intra-state Internet betting. At the 
same time, the bill prohibits (1) Internet betting on dog 
racing; (2) Internet betting on jai alai; (3) interstate 
Internet betting on lotteries; and (4) Internet betting on 
casino games.
    When one compares the activities that are prohibited and 
those that are allowed, it is difficult to determine exactly 
where the line is being drawn. There seems to be little 
difference between betting on a dog race and betting on a horse 
race; all of these involve similar amounts of chance. Earlier 
this year, the Department of Justice expressed similar concerns 
stating that the legislation ``would permit gambling over the 
Internet from the home and favor certain industries over 
others.'' \10\
---------------------------------------------------------------------------
    \10\ Hearing on H.R. 4777, the ``Internet Gambling Prohibition 
Act,'' before the Subcommittee on Crime, Terrorism and Homeland 
Security of the House Committee on the Judiciary, 109th Cong. (2006) 
(testimony of Bruce G. Ohr, Chief of the Organized Crime and 
Racketeering Section, U.S. Department of Justice).
---------------------------------------------------------------------------

2. H.R. 4777 exposes banks to burdensome regulations that create 
        compliance concerns

    H.R. 4777 would amend the prohibition against interstate 
gambling and criminalize the knowing acceptance of credit, 
credit proceeds, electronic fund transfers or other such 
monetary payments by anyone in the gambling business. The 
burden of regulation and compliance created by this proposal is 
substantial, as a key enforcement mechanism would require banks 
to identify and block transactions between bank customers and 
Internet gaming companies.
    This proposal does not recognize that the check clearing 
system and the Automated Clearing House (ACH) network do not 
have the same capabilities as the credit card association 
networks to identify different types of transactions. These 
systems were never intended to identify illegal activity, 
monitor individual transactions and regulate enforcement 
functions. The payments system was not designed to be a 
transaction monitoring service. It was designed to be an 
effective and efficient method for transferring dollars from 
one party to another. This legislation, if passed, would not 
only necessitate a massive overhaul of our Nation's check 
clearing and ACH systems, but also create enormous regulatory 
burden requiring the deputization of financial institutions to 
identify and block illegal transactions.
    According to National Automated Clearing House Association 
(``NACHA''), over twelve billion transactions worth more than 
$28 trillion were conducted by the Automated Clearing House 
Network in 2004, up from the approximately three billion 
transactions worth $10 trillion in 1994. Financial institutions 
rely heavily on ACH transfers as a more efficient and less 
expensive means of moving funds than the primary alternatives 
of paper checks and wire transfers. As is clear from the sheer 
volume of ACH transactions, the efficient operations of ACH 
networks is critical to the functioning of the United States 
financial system.
    ACH transactions, however, involve only the information 
necessary to process the payments quickly and effectively. The 
ACH itself, which is merely a conduit for transactions, has no 
means of obtaining additional information beyond what banks 
provide. Banks research their customers before opening their 
accounts and monitor the accounts for suspicious activity 
patterns, but they have no practical means of learning the 
facts surrounding each individual transaction in which a 
customer engages. Given that banks originate and receive 
literally billions of ACH transactions each year, many of them 
automatically requested, it would be virtually impossible for 
banks to inquire about and describe each ACH transaction in 
detail.
    One of the most difficult aspects of implementing the 
proposed regulation is that financial institutions would have 
the judicial-like duty of distinguishing between legal and 
illegal transactions because, as earlier mentioned, H.R. 4777 
does not prohibit all forms of Internet gambling. Rather, it 
creates a distinction between legal and illegal Internet 
gambling. This distinction turns on the type of gambling 
(horseracing versus poker), the location of the transaction 
(interstate versus intrastate or tribal) and the source of the 
gambling (offshore Internet website versus U.S.--based casino). 
Thus, the burden is placed on a bank to identify if a 
transaction originated at an Internet gambling site, to 
distinguish what portion of the transaction was legal or 
illegal and to determine where the transaction occurred. 
Particularly, in the case of checks that move with the 
customer, it is impossible for a bank to determine the location 
of a transaction and thus, whether a wager was legal or 
illegal.
    H.R. 4777, if passed, would necessitate a cumbersome and 
expensive overhaul of the ACH and check networks. This overhaul 
would impede their efficiency and accuracy and increase 
inconvenience and costs to customers. Not surprisingly, similar 
sentiments were recently echoed in a letter written by R. Bruce 
Josten, Executive Vice-President, Chamber of Commerce to 
Chairman Sensenbrenner and Ranking Member Conyers.\11\ Among 
other things, Mr. Josten proclaimed that,
---------------------------------------------------------------------------
    \11\ Letter from R. Brice Josten, Executive Vice President of 
Government affairs, U.S. Chamber of Commerce to F. James Sensenbrener 
and John Conyers, Jr., Chairman and Ranking Member (respectively), 
House Committee on the Judiciary (May 24, 2006) (on file with the 
author).
---------------------------------------------------------------------------
          requiring financial institutions to seek to determine 
        the purpose of such transactions is a substantial 
        regulatory burden which could require substantial 
        changes to the systems by which such instruments are 
        processed.\12\ (emphasis added)
---------------------------------------------------------------------------
    \12\ Id.
---------------------------------------------------------------------------
    Ultimately, our Nation's payments system is the global 
model of speed and efficiency. It was designed to permit 
consumers and businesses to complete transactions quickly and 
accurately. The proposed legislation would undermine the system 
and threaten the economy. Under this proposed regulatory 
framework, the simple act of writing a check would require 
recording extensive additional information, including the 
location of the transaction, business of the payee and legal 
character of each part of the transaction. The likely result is 
that banks would deny many legal transactions and the payments 
system will be significantly slowed.

3. H.R. 4777's failure to ban all forms of online gambling will likely 
        result in an increase in the number of underage gamblers

    As previously mentioned, while H.R. 4777 portends to 
prohibit all forms of online gambling, the legislation includes 
numerous exemptions for several of the more powerful and 
popular gambling industries. One exemption, in particular, 
relates to the horse racing industry and the ability of an 
individual bettor, even after the enactment of this bill, to 
legally cast bets on interstate pari-mutuel contests involving 
horses. This exemption is of great concern.
    Recent studies have often demonstrated the ease by which 
minors have been able to gain access to various Internet gaming 
sites to engage in online wagering. In fact, a 2004 study 
conducted by GamCare, Citizencard and the Children's Charities' 
Coalition on Internet Safety (CHIS) tested 37 such sites to 
ascertain the level of difficulty minors would encounter when 
trying to set up accounts for purposes of online gambling.\13\ 
Not surprisingly, the study's findings determined that a minor 
was able to successfully open up an account and access gambling 
systems on 30 of these sites.\14\
---------------------------------------------------------------------------
    \13\ BBC News, Children ``able to gamble on net''  (July 27, 2004), 
available at http://news.bbc.co.uk/2/hi/uk_news/3927645.stm
    \14\ Id.
---------------------------------------------------------------------------
    Unfortunately, reports such as this are becoming far too 
common. Just last fall, the Annenberg Public Policy Center 
announced that almost 600,000 youth (ages 14-22) reported 
gambling on the Internet on a weekly basis.\15\ This figure is 
roughly double the number of youth who reported engaging in 
such conduct in the prior year (2004),\16\ but significantly 
less than the nearly 20% of young men (ages 14-22) who 
acknowledge using one or more Internet gambling sites on a 
monthly basis.\17\
---------------------------------------------------------------------------
    \15\ Press Release, The Annenberg Public Policy Center of the 
University of Pennsylvania, Card Playing Trend in Young People 
Continues (September 28, 2005) (available at http://
www.annenbergpublicpolicycenter.org/07_adolescent___risk/
GamblingRelease20050928.pdf
    \16\ Id.
    \17\ Id.
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    Figures such as these, when coupled with H.R. 4777's 
current exemption and the recent comments of horse racing 
executives, are of great concern. After all, earlier this 
month, individuals within the industry were reported to have 
publicly acknowledged that they intend to use the Internet to 
target youth as potential gambling customers.\18\ As reported 
in the Baltimore Sun:

    \18\ Bill Ordine, Horse racing is betting on Internet wagering; Md 
industry chief De Francis says it could attract youth, The Baltimore 
Sun, May 15, 2006, at A1.
---------------------------------------------------------------------------
          Over the 25 years I've been in this industry, not one 
        day has gone by when I haven't heard people complaining 
        that our customer base is getting older and we can't 
        attract young people,' said Joseph A. De Francis, chief 
        executive officer of the Maryland Jockey Club and 
        executive vice president for operations of interactive 
        betting channels for parent Magna Entertainment corp. 
        ``And this gives us an opportunity to expand into the 
        youth market unlike any we've ever had before.'' \19\ 
        (emphasis added)
---------------------------------------------------------------------------
    \19\ Id.
---------------------------------------------------------------------------

4. H.R. 4777 may invite retaliation by trading partners and allies, 
        including the United Kingdom

    In signing the General Agreement on Trade in Services 
(GATS), the United States committed to provide foreign entities 
access to its market for remote gambling and betting services. 
In April 2005, a WTO Appellate Body held that U.S. federal laws 
prohibiting Internet gambling are inconsistent with U.S.'s GATS 
commitment, because they restrict foreign nations from 
accessing the gambling market via the Internet. Most federal 
U.S. prohibitions were held to be permissible, however, under 
the GATS exemption for ``laws necessary to protect public 
morals.'' This exemption is permitted so long as the law in 
question is applied in a nondiscriminatory manner.
    The court held that one U.S. federal law, the Interstate 
Horseracing Act (IHA), does not meet the criteria for this 
exemption, because it appears to permit betting on horseracing 
over the Internet and phones across state lines while 
prohibiting the foreign supply of this service. The decision 
also makes clear that, if properly pled before an international 
body, inconsistent U.S. state laws regarding Internet gambling 
would likely violate the GATS agreement as well.
    The present case was brought by the nation of Antigua and 
Barbuda, but was supported by the U.K., E.U. and Japan. The 
U.S. had until April 3, 2006, to bring its laws into conformity 
with its international commitments, and having failed to do so, 
Antigua and Barbuda may now seek to impose trade retaliations 
and, more importantly, major trading partners may bring 
litigation permitting them to do the same. These trading 
partners, like most other developing nations, have taken steps 
to regulate Internet gaming, rather than prohibiting it 
outright.
    The Office of the U.S. Trade Representative has indicated 
its strategy for complying with the WTO ruling is to confirm 
that all forms of Internet gaming are prohibited, including 
online horserace betting, whether foreign or domestic. However, 
any statute that permits some forms of Internet gaming while 
prohibiting others could undermine the U.S.'s claim to the 
``public morals'' exception under the GATS, and expose it to 
additional trade sanctions.
    By validating certain forms of Internet gambling to the 
exclusions of others, H.R. 4777 further entrenches U.S. 
violation of these commitments and exposes the U.S. to costly 
retaliation by the United Kingdom, European Union, Japan, and 
other major trading partners that are moving to regulate 
Internet gambling, rather than simply prohibit it.

Description of amendments offered by Democratic Members

            1. Amendment Offered by Rep. Robert Wexler (#1)

    Description of amendment: The Wexler amendment sought to 
eliminate from the scope of the definition of ``unlawful 
Internet gambling,'' bets made in connection with pari-mutuel 
animal racing or jai-alai activities that were expressly 
authorized or licensed by the state in which they were cast or 
received.
    The amendment was defeated by a vote of 15 to 21. Ayes: 
Representatives Conyers, Berman, Boucher, Scott, Watt, Lofgren, 
Waters, Wexler, Weiner, Schiff, Sanchez, Wasserman Schultz, 
Coble, Feeney, Delahunt. Nays: Representatives Smith, Gallegly, 
Goodlatte, Chabot, Lungren, Jenkins, Cannon, Bachus, 
Hostettler, Green, Keller, Issa, Pence, Forbes, King, Feeney, 
Franks, Gohmert, Van Hollen. Sensenbrenner, Inglis.

            2. Amendment Offered by Rep. Robert Wexler (#2)

    Description of amendment: The Wexler amendment proposed to 
strike sections 5 and 6, in their entirety, from the text of 
the underlying bill. As earlier mentioned, Section 5 provided a 
rule of construction regarding the Interstate Horseracing Act. 
While, Section 6 added language declaring it to be the Sense of 
the Congress that none of the bill's prohibitions were intended 
to affect the horse racing industry.
    The amendment was defeated by voice-vote.

             3. Amendment Offered by Rep. John Conyers, Jr.

    Description of amendment: The Conyers amendment proposed to 
modify section 5 of the bill to require all interstate gambling 
transactions covered under that provision to occur with secure 
and effective age and identification verification technology.
    The amendment was defeated by a vote of 14 to 17, with one 
member (Gohmert) having voted present. Ayes: Representatives 
Green, Conyers, Berman, Scott, Watt, Lofgren, Waters, Delahunt, 
Wexler, Weiner, Schiff, Sanchez, Van Hollen, Wasserman Schultz. 
Nays: Representatives Coble, Smith, Goodlatte, Chabot, Lungren, 
Jenkins, Cannon, Inglis, Hostettler, Keller, Issa, Pence, 
Forbes, King, Feeney, Boucher, Sensenbrenner.

                4. Amendment Offered by Rep. Bobby Scott

    Description of amendment: The Scott amendment sought to 
impose a fine or criminal penalty of up to 2 years imprisonment 
against any individual who unlawfully places a bet or wager 
with an illegal gambling entity, as defined under the terms of 
the bill.
    The amendment was defeated by a vote of 6 to 30. Ayes: 
Representatives Green, Gohmert, Conyers, Berman, Scott, 
Lofgren. Nays: Representatives Coble, Smith, Gallegley, 
Goodlatte, Chabot, Lungren, Jenkins, Cannon, Bachus, Inglis, 
Hostettler, Keller, Issa, Pence, Forbes, King, Feeney, Franks, 
Boucher, Watt, Jackson Lee, Waters, Delahunt, Wexler, Weiner, 
Schiff, Sanchez, Van Hollen, Wasserman Schultz, Sensenbrenner.
                                   John Conyers, Jr.
                                   Sheila Jackson-Lee.
                                   Robert Wexler.
                                   Linda T. Sanchez.