skip to main content

S. 474 (105th): Internet Gambling Prohibition Act of 1997


The text of the bill below is as of Oct 23, 1997 (Reported by Senate Committee). The bill was not enacted into law.


S 474 RS

105th CONGRESS

1st Session

S. 474

To amend sections 1081 and 1084 of title 18, United States Code.

IN THE SENATE OF THE UNITED STATES

March 19, 1997

Mr. KYL (for himself, Mrs. FEINSTEIN, Mr. GRAHAM, Mr. HUTCHINSON, Mr. GRASSLEY, Mr. JOHNSON, Mr. LIEBERMAN, Mr. GORTON, Mr. BRYAN, Mr. REID, Mr. ASHCROFT, and Mr. BOND) introduced the following bill; which was read twice and referred to the Committee on the Judiciary

October 23, 1997

Reported by Mr. HATCH, with an amendment

[Strike out all after the enacting clause and insert the part printed in italic]

A BILL

To amend sections 1081 and 1084 of title 18, United States Code.

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

[Struck out->] SECTION 1. SHORT TITLE. [<-Struck out]

    [Struck out->] This Act may be cited as the ‘Internet Gambling Prohibition Act of 1997’. [<-Struck out]

[Struck out->] SEC. 2. DEFINITIONS. [<-Struck out]

    [Struck out->] Section 1081 of title 18, United States Code, is amended-- [<-Struck out]

      [Struck out->] (1) in the matter immediately following the colon, by designating the first 5 undesignated paragraphs as paragraphs (1) through (5), respectively, and indenting each paragraph accordingly; [<-Struck out]

      [Struck out->] (2) in paragraph (5), as so designated-- [<-Struck out]

        [Struck out->] (A) by striking ‘wire communication’ and inserting ‘communication’; [<-Struck out]

        [Struck out->] (B) by striking ‘transmission of writings’ and inserting ‘transmission or receipt of data, writings’; and [<-Struck out]

        [Struck out->] (C) by striking ‘or other like’ and all that follows before the period and inserting ‘radio, electromagnetic, photo-optical, photoelectric, or other similar facility’; and [<-Struck out]

      [Struck out->] (3) by adding at the end the following: [<-Struck out]

      [Struck out->]

      ‘(6) BETS OR WAGERS- The term ‘bets or wagers’-- [<-Struck out]

        [Struck out->]

        ‘(A) means the staking or risking by any person of something of value upon the outcome of a contest of chance or a future contingent event not under the control or influence of the person, upon an agreement or understanding that the person or another person will receive something of value in the event of a certain outcome; [<-Struck out]

        [Struck out->]

        ‘(B) includes the purchase of a chance or opportunity to win a lottery or other prize; and [<-Struck out]

        [Struck out->]

        ‘(C) does not include-- [<-Struck out]

          [Struck out->]

          ‘(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))); [<-Struck out]

          [Struck out->]

          ‘(ii) a contract of indemnity or guarantee; or [<-Struck out]

          [Struck out->]

          ‘(iii) a contract for life, health, or accident insurance.’. [<-Struck out]

[Struck out->] SEC. 3. TRANSMISSION OF WAGERING INFORMATION; PENALTIES. [<-Struck out]

    [Struck out->] Section 1084 of title 18, United States Code, is amended-- [<-Struck out]

      [Struck out->] (1) by striking subsections (a) and (b) and inserting the following: [<-Struck out]

    [Struck out->]

    ‘(a) IN GENERAL- [<-Struck out]

      [Struck out->]

      ‘(1) PERSONS ENGAGED IN THE BUSINESS OF BETTING OR WAGERING- Whoever, being engaged in the business of betting or wagering knowingly uses a communication facility for the transmission or receipt in interstate or foreign commerce of bets or wagers, information assisting in the placing of bets or wagers, or a communication that entitles the transmitter or receiver to the opportunity to receive money or credit as a result of bets or wagers, shall be fined not more than $10,000, imprisoned not more than 2 years, or both. [<-Struck out]

      [Struck out->]

      ‘(2) OTHER PERSONS- Whoever (other than a person described in paragraph (1)) knowingly uses a communication facility for the transmission or receipt in interstate or foreign commerce of bets or wagers, information assisting in the placing of bets or wagers, or a communication that entitles the transmitter or receiver to the opportunity to receive money or credit as a result of bets or wagers, shall be fined not more than $5,000, imprisoned not more than 1 year, or both. [<-Struck out]

    [Struck out->]

    ‘(b) EXCEPTIONS- [<-Struck out]

      [Struck out->]

      ‘(1) NEWS REPORTING; LEGAL BETS AND WAGERS- Nothing in this section shall be construed to prohibit the transmission or receipt in interstate or foreign commerce of any information-- [<-Struck out]

        [Struck out->]

        ‘(A) for use in the news reporting of any activity, event, or contest upon which bets or wagers are based; or [<-Struck out]

        [Struck out->]

        ‘(B) relating to the placing of bets or wagers, if such betting or wagering-- [<-Struck out]

          [Struck out->]

          ‘(i) is legal in the State or foreign country in which the transmission originates; and [<-Struck out]

          [Struck out->]

          ‘(ii) is legal in each State and each foreign country in which the transmission is received. [<-Struck out]

      [Struck out->]

      ‘(2) STATE LAW- Nothing in this section shall be construed to preempt any State law.’; and [<-Struck out]

      [Struck out->] (2) in subsection (d)-- [<-Struck out]

        [Struck out->] (A) by striking ‘(d) When’ and inserting the following: [<-Struck out]

    [Struck out->]

    ‘(d) DUTIES OF COMMON CARRIERS AND INTERACTIVE COMPUTER SERVICE PROVIDERS- [<-Struck out]

      [Struck out->]

      ‘(1) IN GENERAL- If’; [<-Struck out]

        [Struck out->] (B) by inserting ‘or interactive computer service provider’ after ‘common carrier’ each place that term appears; [<-Struck out]

        [Struck out->] (C) by striking ‘Nothing’ and inserting the following: [<-Struck out]

      [Struck out->]

      ‘(3) JUDICIAL ACTION- Nothing’; and [<-Struck out]

        [Struck out->] (D) by inserting after paragraph (1), as so designated by subparagraph (A) of this paragraph, the following: [<-Struck out]

      [Struck out->]

      ‘(2) INJUNCTIVE RELIEF- Any Federal, State, or local law enforcement agency acting within its jurisdiction, shall have the authority, following the issuance of a notice under paragraph (1), to seek an injunction or other appropriate relief from a Federal or State court of competent jurisdiction barring access to the communication facility at issue or preventing the use of such facility for the purpose of transmitting or receiving gambling information in interstate or foreign commerce in violation of Federal, State, or local law.’. [<-Struck out]

[Struck out->] SEC. 4. SENSE OF THE SENATE. [<-Struck out]

    [Struck out->] It is the sense of the Senate that the Federal Government should have extraterritorial jurisdiction over the transmission to or receipt from the United States of-- [<-Struck out]

      [Struck out->] (1) bets or wagers (as that term is defined in section 1081 of title 18, United States Code); [<-Struck out]

      [Struck out->] (2) information assisting in the placing of bets or wagers; and [<-Struck out]

      [Struck out->] (3) any communication that entitles the transmitter or recipient to the opportunity to receive money or credit as a result of bets or wagers. [<-Struck out]

[Struck out->] SEC. 5. REPORT. [<-Struck out]

    [Struck out->] Not later than 360 days after the date of enactment of this Act, the Attorney General shall submit a report to Congress that includes-- [<-Struck out]

      [Struck out->] (1) an analysis of the problems, if any, associated with enforcing section 1084 of title 18, United States Code, as amended by this Act; [<-Struck out]

      [Struck out->] (2) recommendations for the best use of the resources of the Department of Justice to enforce that section; [<-Struck out]

      [Struck out->] (3) recommendations for the best use of the resources of the Federal Communications Commission to enforce that section; and [<-Struck out]

      [Struck out->] (4) an estimate of the amount of activity and money being used to gamble on the Internet (as that term is defined in section 230(e)(1) of the Communications Act of 1934 (47 U.S.C. 230(e)(1)). [<-Struck out]

SECTION 1. SHORT TITLE.

    This Act may be cited as the ‘Internet Gambling Prohibition Act of 1997’.

SEC. 2. DEFINITIONS.

    Section 1081 of title 18, United States Code, is amended--

      (1) in the matter immediately following the colon, by designating the first 5 undesignated paragraphs as paragraphs (1) through (5), respectively, and indenting each paragraph accordingly; and

      (2) by adding at the end the following:

      ‘(6) BETS OR WAGERS- The term ‘bets or wagers’--

        ‘(A) means the staking or risking by any person of something of value (other than a de minimis amount) upon the outcome of a contest, sporting event, or game of chance, upon an agreement or understanding that the person or another person will receive something of value 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 which purchase requires consideration in an amount exceeding a de minimis amount); 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 contract of indemnity or guarantee; or

          ‘(iii) a contract for life, health, or accident insurance.’.

SEC. 3. PROHIBITION ON INTERNET GAMBLING.

    (a) IN GENERAL- Chapter 50 of title 18, United States Code, is amended by adding at the end the following:

‘Sec. 1085. Internet gambling

    ‘(a) DEFINITIONS- In this section--

      ‘(1) the term ‘interactive computer service’ means any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that provides access to the Internet;

      ‘(2) the term ‘Internet’ means the international computer network of both Federal and non-Federal interoperable packet switched data networks; and

      ‘(3) 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.

    ‘(b) GAMBLING-

      ‘(1) PROHIBITION- It shall be unlawful for a person to place, receive, or otherwise make a bet or wager, via the Internet or any other interactive computer service in any State.

      ‘(2) PENALTIES- A person who willfully violates paragraph (1) shall be--

        ‘(A) fined in an amount that is not more than the greater of--

          ‘(i) the amount that the person is found to have wagered via the Internet; or

          ‘(ii) $2,500;

        ‘(B) imprisoned not more than 6 months; or

        ‘(C) both.

    ‘(c) GAMBLING INFORMATION-

      ‘(1) PROHIBITION- It shall be unlawful for a person engaged in the business of betting or wagering to engage in that business through the Internet or through any other interactive computer service in any State.

      ‘(2) PENALTIES- A person engaged in the business of betting or wagering who violates paragraph (1) shall be--

        ‘(A) fined in an amount that is not more than the greater of--

          ‘(i) the amount that such person is found to have received in bets or wagers as a result of engaging in that business in violation of this subsection; or

          ‘(ii) $20,000;

        ‘(B) imprisoned not more than 4 years; or

        ‘(C) both.’.

    (b) TECHNICAL AMENDMENT- The analysis for chapter 50 of title 18, United States Code, is amended by adding at the end the following:

      ‘1085. Internet gambling.’.

SEC. 4. CIVIL REMEDIES.

    (a) The district courts of the United States shall have original and exclusive jurisdiction to prevent and restrain violations of section 1085 of title 18, United States Code, as added by this Act, by issuing appropriate orders.

    (b)(1) The Attorney General of the United States may institute proceedings under this section. Upon application of the Attorney General, the district court may enter a restraining order or an injunction, or may take any other action necessary to prevent a violation of section 1085 of title 18, United States Code, as added by this Act, if, prior to the filing of an indictment or information by the United States, the court determines that there is a substantial probability that such violation has occurred or will occur. Upon the filing of an indictment or information by the United States, the district court shall enter a preliminary injunction, or may take any other action necessary to prevent a violation of section 1085 of title 18, United States Code, as added by this Act. Notwithstanding any other provisions of this paragraph the court may not enter an order affecting the transmission of bets, wagers, or related gambling information in, into, or through any State other than the State in which the court is situated.

    (2) The attorney general of a State (or other appropriate State official) in which a violation of section 1085 of title 18, United States Code, as added by this Act, is alleged to have occurred, after providing written notice to the Attorney General of the United States, may institute proceedings under this section. Upon application of the attorney general of the affected State, the district court may enter a temporary restraining order or an injunction, or may take any other action necessary to prevent a violation of section 1085 of title 18, United States Code, as added by this Act, if, prior to the filing of an indictment or information by the United States or the State, the court determines that there is a substantial probability that the United States will prevail at trial. Notwithstanding any other provisions of this paragraph the court may not enter an order affecting the transmission of bets, wages, or related gambling information in, into, or through any State other than the State in which the court is situated.

    (3) Any temporary restraining order or a preliminary injunction entered pursuant to this subsection shall expire if, and as soon as the Attorney General of the United States, and the attorney general (or other appropriate State official) of the State at issue, each notify the court that issued the order or injunction that the United States or the State, as applicable, will not seek a permanent injunction.

    (c)(1) A district court may enter a temporary restraining order under this section upon application of the Attorney General of the United States under subsection (b)(1), or the attorney general (or other appropriate State official) of an affected State under subsection (b)(3), without notice and the opportunity for a hearing when an indictment or information has not yet been filed with respect to a transmission of bets, wagers, or related gambling information in, into, or through the State in which the court is situated if the United States demonstrates that there is probable cause to believe that the transmission violates section 1085 of title 18, United States Code, as added by this Act.

    (2) A temporary restraining order entered under this subsection shall expire only upon the grant or denial of a permanent injunction.

    (3) A hearing requested concerning an order entered under this subsection shall be held at the earliest practicable time.

    (d) The court may receive and consider at a hearing held pursuant to this section evidence and information that would be inadmissible under the Federal Rules of Evidence.

    (e) Upon conviction of a person under this section, the court may enter a permanent injunction enjoining the transmission of bets, wagers, or related gambling information in, into, or through the State in which the court is situated.

SEC. 5. MULTILATERAL NEGOTIATIONS.

    (a) IN GENERAL- Not later than 6 months after the date of enactment of this Act, the Secretary of State, in consultation with the Secretary of the Treasury, the Attorney General of the United States, and the Secretary of Commerce, shall commence negotiations with foreign countries in order to conclude international agreements that would enable the United States to enforce section 1085(c)(1) of title 18, United States Code, as added by this Act, with respect to persons described in that section who are engaging in violations of that section from outside the United States.

    (b) REPORT- Not less frequently than every 6 months after the commencement of the negotiations under subsection (a), the Secretary of State shall report on the progress of the negotiations to the Majority and Minority Leaders of the Senate, the Speaker and Minority Leader of the House of Representatives, and the Chairmen and Ranking Members of the Committees on the Judiciary of the House of Representatives and the Senate.