[Congressional Bills 108th Congress]
[From the U.S. Government Printing Office]
[H.R. 1223 Introduced in House (IH)]






108th CONGRESS
  1st Session
                                H. R. 1223

 To create a commission on Internet gambling licensing and regulation.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 12, 2003

   Mr. Conyers (for himself, Mr. Cannon, Ms. Berkley, and Mr. Baca) 
 introduced the following bill; which was referred to the Committee on 
    the Judiciary, and in addition to the Committees on Energy and 
   Commerce, and Financial Services, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
 To create a commission on Internet gambling licensing and regulation.

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

SECTION 1. SHORT TITLE.

     This Act shall be known as the ``Internet Gambling Licensing and 
Regulation Commission Act''.

SEC. 2. FINDINGS AND POLICY.

     The Congress finds the following:
            (1) Gambling is regulated primarily by State and tribal 
        governments, whose statutes and regulations govern the 
        placement and acceptance of wagers within state boundaries.
            (2) Online gaming is an activity occurring in interstate 
        commerce with millions of Americans participating.
            (3) The advent of advanced telecommunications technologies, 
        and the Internet in particular, has rendered state regulation 
        less effective and confusing with respect to online wagering.
            (4) Federal statutes governing interstate placement of 
        wagers are contradictory and confusing, and they do not 
        adequately address the issues involved with gambling over the 
        Internet, including gambling by minors, problem gamblers, and 
        the susceptibility of Internet gambling to money laundering.
            (5) Commercial casino operations, Native American tribal 
        gaming operations, State lotteries, horse and dog racing 
        tracks, jai alai, and card rooms have made legal land-based 
        gambling available to the vast majority of Americans.
            (6) The use of various types of credit, credit cards, 
        electronic fund transfers, and bank instruments is the 
        principal manner in which individuals fund their engagement in 
        Internet gambling.
            (7) Online gaming should be subject to the consumer 
        protection laws of the United States.
            (8) Various forms of gambling, including inter alia, 
        casino-style, sports wagering, parimutuel wagering (including 
        horse racing, dog racing, and jai alai), State lotteries, 
        noncasino slot machines and others, are subject to disparate 
        Federal, State, and tribal laws and regulations.
            (9) Because of the nature of the Internet, legislative 
        attempts to prohibit Internet gambling are unlikely to be 
        effective, and may adversely impact American's rights to due 
        process and individual privacy.
            (10) It is the policy of the Congress in this Act to 
        establish a commission to study and resolve issues posed by the 
        regulation of interstate commerce with respect to Internet 
        gambling.

SEC. 3. INTERNET GAMBLING LICENSING AND REGULATION STUDY COMMISSION.

    (a) Establishment of Commission.--There is established a commission 
to be known as the Internet Gambling Licensing and Regulation Study 
Commission (hereinafter referred to in this Act as the ``Commission''). 
The Commission shall--
            (1) be composed of 5 members appointed in accordance with 
        subsection (b); and
            (2) conduct its business in accordance with the provisions 
        of this Act.
    (b) Membership.--
            (1) In general.--The Commissioners shall be appointed for 
        the life of the Commission as follows:
                    (A) 1 shall be appointed by the Speaker of the 
                House of Representatives.
                    (B) 1 shall be appointed by the Minority Leader of 
                the House of Representatives.
                    (C) 1 shall be appointed by the Majority Leader of 
                the Senate.
                    (D) 1 shall be appointed by the Minority Leader of 
                the Senate.
                    (E) The 4 commissioners appointed in subparagraphs 
                (A), (B), (C), and (D) shall select by consensus the 
                fifth Commissioner, who shall be the Chairman of the 
                Commission.
            (2) Persons eligible.--The members of the Commission shall 
        be individuals who have knowledge or expertise, whether by 
        experience or training, in matters to be studied by the 
        Commission under section 4. The members may be from the public 
        or private sector, and may include Federal, State, local, or 
        Native American tribal officers or employees, members of 
        academia, nonprofit organizations, industry, or other 
        interested individuals.
            (3) Consultation required.--The Speaker of the House of 
        Representatives, the Minority Leader of the House of 
        Representatives, the Majority Leader of the Senate, and the 
        Minority Leader of the Senate shall consult among themselves 
        prior to the appointment of the members of the Commission in 
        order to achieve, to the maximum extent possible, fair and 
        equitable representation of various points of view with respect 
        to the matters to be studied by the Commission under section 4.
            (4) Completion of appointments; vacancies.--The Speaker of 
        the House of Representatives, the Minority Leader of the House 
        of Representatives, the Majority Leader of the Senate, and the 
        Minority Leader of the Senate shall conduct the consultation 
        required under paragraph (3) and shall each make their 
        respective appointments not later than 60 days after the date 
        of enactment of this Act. Any vacancy that occurs during the 
        life of the Commission shall not affect the powers of the 
        Commission, and shall be filled in the same manner as the 
        original appointment not later than 60 days after the vacancy 
        occurs.
            (5) Operation of the commission.--
                    (A) Meetings.--The Commission shall meet at the 
                call of the Chairman. The initial meeting of the 
                Commission shall be conducted not later than 30 days 
                after the appointment of the last member of the 
                Commission, or not later than 30 days after the date on 
                which appropriated funds are available for the 
                Commission, whichever is later.
                    (B) Quorum; voting; rules.--A majority of the 
                members of the Commission shall constitute a quorum to 
                conduct business, but the Commission may establish a 
                lesser quorum for conducting hearings scheduled by the 
                Commission. Each member of the Commission shall have 1 
                vote, and the vote of each member shall be accorded the 
                same weight. The Commission may establish by majority 
                vote any other rules for the conduct of the 
                Commission's business, if such rules are not 
                inconsistent with this Act or other applicable law.

SEC. 4. DUTIES OF THE COMMISSION.

    (a) Study.--
            (1) In general.--It shall be the duty of the Commission to 
        conduct a comprehensive study of the existing legal framework 
        governing Internet gambling and the issues involved with the 
        licensing and regulation of Internet gambling.
            (2) Matters to be studied.--The matters studied by the 
        Commission under paragraph (1) shall include, but not be 
        limited to--
                    (A) a review of existing international, Federal, 
                State, tribal, and local laws governing various forms 
                of wagering over the Internet, the effectiveness of 
                those laws, and their conformity with each other;
                    (B) an assessment of the impact of Internet 
                gambling with respect to problem gambling;
                    (C) an assessment of the impact of Internet 
                gambling on the availability of gambling to minors;
                    (D) an assessment of the susceptibility of Internet 
                gambling to money laundering by terrorists or criminal 
                enterprises;
                    (E) the potential of regulatory measures to 
                minimize any adverse impacts of Internet gambling, 
                including the problems identified in subparagraphs (B), 
                (C), and (D);
                    (F) an evaluation of the personal use of credit, 
                credit cards, electronic fund transfers, and bank 
                instruments to fund the engagement in Internet 
                gambling, including an assessment of the potential of 
                these means to minimize any adverse impacts of Internet 
                gambling, including the problems identified in 
                subparagraphs (B), (C), and (D);
                    (G) issues of federalism posed by the regulation of 
                Internet gambling, and the reconciliation of a state-
                based legal framework with an inherently interstate and 
                international medium such as the Internet;
                    (H) the problems of unregulated international 
                Internet wagering, and options for the Federal 
                Government to seek international cooperation in the 
                licensing and regulation of such gambling; and
                    (I) an assessment of the activities in the European 
                Union member states to regulate and license Internet 
                gambling.
    (b) Report.--Not later than 1 year after the date on which the 
Commission first meets, the Commission shall submit to the President, 
the Congress, State Governors, and Native American tribal governments a 
comprehensive report on the Commission's findings and conclusions.
    (c) Recommendations.--Not later than 6 months after the submission 
of the report under subsection (b) the Commission shall issue proposed 
changes to Federal laws and regulations to provide for the licensing 
and regulation of Internet gambling in the United States. These 
proposals shall--
            (1) preserve the prerogatives of States with respect to 
        intrastate gambling and wagering within their borders, and the 
        further prerogative of States to regulate the placement and 
        acceptance of online wagers by their citizens, including to 
        adopt measures to prevent wagering by individuals in States 
        where all gambling is illegal;
            (2) include measures to minimize adverse impacts of 
        Internet gambling, including--
                    (A) measures to prevent minors from gambling 
                online;
                    (B) measures to prevent the use of Internet 
                gambling as a money laundering channel for terrorists 
                and criminal enterprises; and
                    (C) measures to identify, and where possible, 
                provide assistance to problem gamblers online;
            (3) preserve tribal sovereignty with respect to gaming and 
        Internet gaming in a manner consistent with the decision of the 
        Supreme Court of the United States in California v. Cabazon 
        Band of Mission Indians, 480 U.S. 202, 107 S. Ct. 1083 (1987);
            (4) clarify and harmonize the Federal laws governing 
        gambling as they apply to Internet gambling, and eliminate the 
        disparate treatment of various forms of Internet gambling, 
        except in cases where the disparity serves a compelling State 
        interest;
            (5) provide for the appropriate taxation of Internet 
        gambling enterprises;
            (6) provide for the licensing of enterprises both within 
        the United States and outside of its borders;
            (7) consider and, where possible, remain consistent with 
        the goals, principles, and obligations of the United States in 
        other international negotiations governing electronic commerce; 
        and
            (8) include measures to discourage, prohibit, or prevent 
        United States citizens from wagering with unlicensed Internet 
        gambling operations outside of the United States.

SEC. 5. POWERS OF THE COMMISSION.

    (a) Hearings.--
            (1) In general.--The Commission may hold such hearings, sit 
        and act at such times and places, administer such oaths, take 
        such testimony, and receive such evidence as the Commission 
        considers advisable to carry out its duties under section 4.
            (2) Witness expenses.--Witnesses requested to appear before 
        the Commission shall be paid the same fees as are paid to 
        witnesses under section 1821 of title 28, United States Code. 
        The per diem and mileage allowances for witnesses shall be paid 
        from funds appropriated to the Commission.
    (b) Subpoenas.--
            (1) In general.--If a person fails to supply information 
        requested by the Commission, the Commission may by majority 
        vote require by subpoena the production of any written or 
        recorded information, document, report, answer, record, 
        account, paper, computer file, or other data or documentary 
        evidence necessary to carry out its duties under section 4. The 
        Commission shall transmit to the Attorney General a 
        confidential, written notice at least 10 days in advance of the 
        issuance of any such subpoena. A subpoena under this paragraph 
        may require the production of materials from any place within 
        the United States.
            (2) Interrogatories.--The Commission may, with respect only 
        to information necessary to understand any materials obtained 
        through a subpoena under paragraph (1), issue a subpoena 
        requiring the person producing such materials to answer, either 
        through a sworn deposition or through written answers provided 
        under oath (at the election of the person upon whom the 
        subpoena is served), to interrogatories from the Commission 
        regarding such information. A complete recording or 
        transcription shall be made of any deposition made under this 
        paragraph.
            (3) Certification.--Each person who submits materials or 
        information to the Commission pursuant to a subpoena issued 
        under paragraph (1) or (2) shall certify to the Commission the 
        authenticity and completeness of all materials or information 
        submitted. The provisions of section 1001 of title 18, United 
        States Code, shall apply to any false statements made with 
        respect to the certification required under this paragraph.
            (4) Treatment of subpoenas.--Any subpoena issued by the 
        Commission under paragraph (1) or (2) shall comply with the 
        requirements for subpoenas issued by a United States district 
        court under the Federal Rules of Civil Procedure.
            (5) Failure to obey a subpoena.--If a person refuses to 
        obey a subpoena issued by the Commission under paragraph (1) or 
        (2), the Commission may apply to a United States district court 
        for an order requiring that person to comply with such 
        subpoena. The application may be made within the judicial 
        district in which that person is found, resides, or transacts 
        business. Any failure to obey the order of the court may be 
        punished by the court as civil contempt.
    (c) Information From Federal Agencies.--The Commission may secure 
directly from any Federal department or agency such information as the 
Commission considers necessary to carry out its duties under section 4. 
Upon the request of the Commission, the head of such department or 
agency may furnish such information to the Commission.
    (d) Information To Be Kept Confidential.--The Commission shall be 
considered an agency of the Federal Government for purposes of section 
1905 of title 18, United States Code, and any individual employed by an 
individual, entity, or organization under contract to the Commission 
under section 7 shall be considered an employee of the Commission for 
the purposes of section 1905 of title 18, United States Code. 
Information obtained by the Commission, other than information 
available to the public, shall not be disclosed to any person in any 
manner, except--
            (1) to Commission employees or employees of any individual, 
        entity, or organization under contract to the Commission under 
        section 7 for the purpose of receiving, reviewing, or 
        processing such information;
            (2) upon court order; or
            (3) when publicly released by the Commission in an 
        aggregate or summary form that does not directly or indirectly 
        disclose--
                    (A) the identity of any person or business entity; 
                or
                    (B) any information which could not be released 
                under section 1905 of title 18, United States Code.

SEC. 6. COMMISSION PERSONNEL MATTERS.

    (a) Compensation of Members.--Each member of the Commission who is 
not an officer or employee of the Federal Government, or whose 
compensation is not precluded by a State, local, or Native American 
tribal government position, shall be compensated at a rate equal to the 
daily equivalent of the annual rate of basic pay prescribed for level 
IV of the Executive Schedule under section 5315 of title 5, United 
States Code, for each day (including travel time) during which such 
member is engaged in the performance of the duties of the Commission. 
All members of the Commission who are officers or employees of the 
United States shall serve without compensation in addition to that 
received for their services as officers or employees of the United 
States.
    (b) Travel Expenses.--The members of the Commission shall be 
allowed travel expenses, including per diem in lieu of subsistence, at 
rates authorized for employees of agencies under subchapter I of 
chapter 57 of title 5, United States Code, while away from their homes 
or regular places of business in the performance of service for the 
Commission.
    (c) Staff.--
            (1) In general.--The Chairman of the Commission may, 
        without regard to the civil service laws and regulations, 
        appoint and terminate an executive director and such other 
        additional personnel as may be necessary to enable the 
        Commission to perform its duties. The employment and 
        termination of an executive director shall be subject to 
        confirmation by a majority of the members of the Commission.
            (2) Compensation.--The executive director shall be 
        compensated at a rate not to exceed the rate payable for level 
        V of the Executive Schedule under section 5316 of title 5, 
        United States Code. The Chairman may fix the compensation of 
        other personnel without regard to the provisions of chapter 51 
        and subchapter III of chapter 53 of title 5, United States 
        Code, relating to classification of positions and General 
        Schedule pay rates, except that the rate of pay for such 
        personnel may not exceed the rate payable for level V of the 
        Executive Schedule under section 5316 of such title.
            (3) Detail of government employees.--Any Federal Government 
        employee, with the approval of the head of the appropriate 
        Federal agency, may be detailed to the Commission without 
        reimbursement, and such detail shall be without interruption or 
        loss of civil service status, benefits, or privilege.
    (d) Procurement of Temporary and Intermittent Services.--The 
Chairman of the Commission may procure temporary and intermittent 
services under section 3109(b) of title 5, United States Code, at rates 
for individuals not to exceed the daily equivalent of the annual rate 
of basic pay prescribed for level V of the Executive Schedule under 
section 5316 of such title.

SEC. 7. CONTRACTS FOR RESEARCH.

    (a) Advisory Commission on Intergovernmental Relations.--
            (1) In general.--In carrying out its duties under section 
        4, the Commission shall contract with the Advisory Commission 
        on Intergovernmental Relations for--
                    (A) a thorough review and cataloging of all 
                applicable Federal, State, local, and Native American 
                tribal laws, regulations, and ordinances that pertain 
                to gambling in the United States; and
                    (B) assistance in conducting the studies required 
                by the Commission under section 4(a), and in particular 
                the review and assessments required in subparagraphs 
                (A), (E), and (G) of paragraph (2) of such section.
            (2) Report required.--The contract entered into under 
        paragraph (1) shall require that the Advisory Commission on 
        Intergovernmental Relations submit a report to the Commission 
        detailing the results of its efforts under the contract not 
        later than 15 months after the date upon which the Commission 
        first meets.
    (b) National Research Council.--
            (1) In general.--In carrying out its duties under section 
        4, the Commission shall contract with the National Research 
        Council of the National Academy of Sciences for assistance in 
        conducting the studies required by the Commission under section 
        4(a).
            (2) Report required.--The contract entered into under 
        paragraph (1) shall require that the National Research Council 
        submit a report to the Commission detailing the results of its 
        efforts under the contract not later than 15 months after the 
        date upon which the Commission first meets.
    (c) Other Organizations.--Nothing in this section shall be 
construed to limit the ability of the Commission to enter into 
contracts with other entities or organizations for research necessary 
to carry out the Commission's duties under section 4.

SEC. 8. DEFINITIONS.

     For the purposes of this Act:
            (1) Bank instrument.--The term ``bank instrument'' means 
        any instrument drawn on or payable through a financial 
        institution (including any check, draft, or similar 
        instrument).
            (2) Credit and credit card.--The terms ``credit'' and 
        ``credit card'' have the meanings given such terms in section 
        103 of the Truth in Lending Act (15 U.S.C. 1602).
            (3) Electronic fund transfer.--The term ``electronic fund 
        transfer''--
                    (A) has the meaning given such term in section 903 
                of the Electronic Fund Transfer Act (15 U.S.C. 1693a); 
                and
                    (B) includes any fund transfer covered by Article 
                4A of the Uniform Commercial Code, as in effect in any 
                State.
            (4) Financial institution.--The term ``financial 
        institution'' has the meaning given such term in section 903 of 
        the Electronic Fund Transfer Act (15 U.S.C. 1693a).
            (5) Gambling.--
                    (A) Except as provided in subparagraph (B), the 
                term ``gambling'' means any legalized form of wagering 
                or betting conducted in a casino, on a riverboat, on an 
                Indian reservation, or at any other location under the 
                jurisdiction of the United States. Such term includes 
                any casino game, parimutuel betting, sports-related 
                betting, lottery, pull-tab game, slot machine, any type 
                of video gaming, computerized wagering or betting 
                activities (including any such activity conducted over 
                the Internet), and philanthropic or charitable gaming 
                activities.
                    (B) The term ``gambling'' does not include--
                            (i) any activity governed by the securities 
                        laws (as that term is defined in section 
                        3(a)(47) of the Securities Exchange Act of 
                        1934) for the purchase or sale of securities 
                        (as that term is defined in section 3(a)(10) of 
                        such Act);
                            (ii) any transaction conducted on or 
                        subject to the rules of a registered entity or 
                        exempt board of trade pursuant to the Commodity 
                        Exchange Act;
                            (iii) any over-the-counter derivative 
                        instrument;
                            (iv) any contract of indemnity or 
                        guarantee;
                            (v) any contract for insurance;
                            (vi) any deposit or other transaction with 
                        a depository institution (as defined in section 
                        3(c) of the Federal Deposit Insurance Act); or
                            (vii) any participation in a simulation 
                        sports game or an educational game or contest 
                        that--
                                    (I) is not dependent solely on the 
                                outcome of any single sporting event or 
                                nonparticipant's singular individual 
                                performance in any single sporting 
                                event;
                                    (II) has an outcome that reflects 
                                the relative knowledge and skill of the 
                                participants with such outcome 
                                determined predominantly by accumulated 
                                statistical results of sporting events; 
                                and
                                    (III) offers a prize or award to a 
                                participant that is established in 
                                advance of the game or contest and is 
                                not determined by the number of 
                                participants or the amount of any fees 
                                paid by those participants.
            (6) Native american tribal government.--The term ``Native 
        American tribal government'' means an Indian tribe, as defined 
        under section 4(5) of the Indian Gaming Regulatory Act of 1988 
        (25 U.S.C. 2703(5)).
            (7) State.--The term ``State'' means each of the several 
        States of the United States, the District of Columbia, the 
        Commonwealth of Puerto Rico, the Virgin Islands, Guam, American 
        Samoa, and the Commonwealth of the Northern Mariana Islands.

SEC. 9. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There are authorized to be appropriated to the 
Commission, the Advisory Commission on Intergovernmental Relations, and 
the National Academy of Sciences such sums as may be necessary to carry 
out the purposes of this Act. Any sums appropriated shall remain 
available, without fiscal year limitation, until expended.
    (b) Limitation.--No payment may be made under section 6 or 7 of 
this Act except to the extent provided for in advance in an 
appropriation Act.

SEC. 10. TERMINATION OF THE COMMISSION.

     The Commission shall terminate 60 days after the Commission 
submits the report required under section 4(b).
                                 <all>