Reid Kyl Online Poker Bill Revealed – All 73 Pages
Everybody has been anxiously awaiting the much ballyhooed Harry Reid/Jon Kyl bill that would ultimately legalize online poker at the federal level in the United States. Quadjacks.com has uncovered the bill in its entirety, 73 pages (see below).
Title: To prohibit Internet gambling, to regulate online poker, to provide consumer protections, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.—This Act may be cited as the “Internet Gambling Prohibition, Poker Consumer Protection, and Strengthening UIGEA Act of 2012”.
(b) Table of Contents.—The table of contents for this Act is as follows: Sec.1.Short title; table of contents.
TITLE I—INTERNET GAMBLING PROHIBITION AND ONLINE POKER CONSUMER PROTECTION Sec.101.Findings and sense of Congress. Sec.102.Definitions.
Sec.103.Prohibition on operation of Internet gambling facilities. Sec.104.Office of Online Poker Oversight. Sec.105.Qualified bodies. Sec.106.Establishment of licensing program only for online poker. Sec.107.Compulsive gaming, responsible gaming, and self-exclusion program requirements. Sec.108.Prohibition on use of licenses in certain States and Indian lands. Sec.109.Prohibition on bets or wagers on sporting events and games other than online poker. Sec.110.Public Internet gambling and online poker parlors prohibited.
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Sec.111.Safe harbor. Sec.112.Cheating and other fraud. Sec.113.Construction and relation to other law. Sec.114.Orderly transition. Sec.115.Annual reports. Sec.116.Effective date.
TITLE II—ENFORCEMENT UNDER TITLES 18 AND 31, UNITED STATES CODE
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Sec.201.Financial service providers. Sec.202.Amendments relating to illegal gambling businesses. Sec.203.Further amendments to subchapter IV of chapter 53 of title 31, United States Code. Sec.204.Bettor forfeiture. Sec.205.Regulations. Sec.206.Conforming amendment.
TITLE III—ONLINE POKER REVENUE PROVISIONS Sec.301.Amendment of 1986 Code. Sec.302.Online poker activity fee; licensee information reporting. Sec.303.Withholding from certain online poker winnings.
Sec.304.Withholding of tax on nonresident aliens. Sec.305.Provisions for State and tribal tax. Sec.306.Foreign licensees subject to United States Federal income tax. Sec.307.No excise tax on online poker wagering.
TITLE IV—OTHER MATTERS Sec.401Limitation on expansion to games other than poker.
Sec.402.State and tribal support for public awareness, research, and treatment programs for problem and pathological gambling.
Sec.403.Resolution of international dispute over Internet gambling. Sec.404.Severability.
TITLE I—INTERNET GAMBLING PROHIBITION AND ONLINE POKER CONSUMER PROTECTION
SEC. 101. FINDINGS AND SENSE OF CONGRESS. (a) Findings.—Congress makes the following findings:
(1) Since the development of the Internet, online sites offering Internet gambling have raised consumer protection and enforcement concerns for Federal and State governments as such online sites are often run by unknown operators located in many different countries, subject to little or no oversight, and have sought to attract customers from the United States.
(2) Subchapter IV of chapter 53 of title 31, United States Code, which was added by the enactment of the Unlawful Internet Gambling Enforcement Act of 2006 (title VIII of Public Law 109–347; 120 Stat. 1952), makes it a Federal crime for gambling businesses to knowingly accept most forms of payment in connection with the participation of another
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person in unlawful Internet gambling. Since the enactment of the Unlawful Internet Gambling Enforcement Act of 2006, such subchapter IV has helped aid enforcement efforts against unlawful Internet gambling operators and to limit unlawful Internet gaming involving United States persons.
(3) In 2011, subchapter IV of chapter 53 of title 31, United States Code, and other enforcement tools led to indictments of several major unlawful Internet gambling operators. However, the reach of those statutes remains limited and United States bettors continue to place bets and wagers on unlawful Internet websites.
(4) On December 23, 2011, the Department of Justice released a memorandum opinion of the Office of Legal Counsel dated September 20, 2011, that construed section 1084 of title 18, United States Code (referred to as the “Wire Act”), to apply only to sports-related gambling activities in interstate and foreign commerce, overturning the Department’s longstanding position that such section applied to all forms of Internet gambling. Congressional action is required to ensure the application of such section and the prohibitions contained therein to all forms of Internet gambling.
(5) A number of States are considering legalizing and promoting Internet gambling to generate revenue. Absent Federal limitations and enforcement, State regulation of Internet gambling, including consumer safeguards, could vary widely from State to State, and States could have difficulty enforcing Internet gambling restrictions within their borders, especially against out-of-State operators. In addition, State authorizations of Internet gambling would result in a major expansion of gambling of all types on the Internet.
(6) Federal law needs to be updated to make clear its relationship to Internet gambling to strengthen enforcement and to ensure an effective Internet gambling enforcement structure that leads to a substantial and sustainable decrease in Internet gambling.
(7) Since the passage of the Professional and Amateur Sports Protection Act (Public Law 102–559) in 1992, which added chapter 178 to title 28, United States Code, such chapter has played an important and effective role in implementing longstanding Federal policy against gambling on professional, scholastic, and amateur sporting events. This policy, as embodied by such chapter, and all criminal laws prohibiting such gambling, are crucial to ensuring the integrity of athletic competition and should remain in full force and effect.
(8) Additional tools to assist law enforcement, banks and financial transaction providers, and Internet service providers in the prevention of unlawful Internet gambling activities would be important and beneficial. Maintenance of a list of licensed online poker facilities would provide a level of certainty as to permitted transactions and law enforcement efforts.
(9) Sports betting raises concerns about the potential for undermining the integrity of athletic competitions through illegal inducements to players or other participants.
(10) Poker is unlike casino-banked games or sports betting. Poker operators are not participants in the games and only receive a set fee for hosting them. Much like winnings in pari-mutuel wagering, a type of betting that Congress has permitted, poker players’ winnings come not from the house, but from the pool of other players. In addition, winning
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at poker involves some measure of skill. Skillful poker players can earn winnings in the long term, while players of house-banked games will always play against odds favoring the house.
(11) Because there is no interstate gaming regulatory structure in the United States, creating a new interstate online poker market that does not utilize existing State and tribal regulatory resources would pose complex regulatory and enforcement challenges to ensure protection of United States consumers.
(12) Internet gambling, like much other Internet commerce, traverses State boundaries. Any particular transaction may cross a number of State boundaries from origin to destination, and communications between the same parties at different times may travel along markedly different routes, based on factors such as traffic, load capacity, and other technical considerations outside the control of sender and recipient. For that reason, among others, the Federal courts consistently have ruled that the Internet is an instrumentality and channel of interstate commerce and, as such, is subject to Congress’s plenary authority. For these same reasons, Internet gambling by its very nature implicates Federal concerns, and is different in kind and effect from traditional gambling activity.
(13) The United States never intended to include Internet gaming of any kind within the scope of its commitments under the General Agreement for Trade in Services, and therefore, no World Trade Organization Member had any competitive expectation of access to the United States Internet gaming market. Despite these obvious facts, the Dispute Settlement Panels and the Appellate Body of the World Trade Organization have determined that such commitments were made in a proceeding brought by the Government of Antigua and Barbuda, WT/DS285.
(14) As a result of the erroneous conclusion of World Trade Organization dispute settlement bodies, the United States has indicated its intention to withdraw that commitment and has initiated the appropriate process to that end. The United Sates should conclude this matter expeditiously.
(15) A number of States have authorized or are considering authorizing online purchases of lottery subscriptions or other lottery games.
(16) Different forms of gaming do not constitute like services under the General Agreement for Trade in Services because they raise different regulatory and policy concerns, require differing measures to protect consumers and to ensure fairness, entail different roles for operators and players, require differing infrastructure and support, are perceived differently by consumers and markets, and are grounded in differing cultural and historical contexts.
(b) Sense of Congress.—It is the sense of Congress that—
(1) Internet gambling involving house-banked games or sports betting should be strictly prohibited;
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(2) an online poker market should be limited to only those States and Indian tribes that
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affirmatively choose to opt-in and the market should be regulated by State and tribal entities that have an established track record of providing a well-regulated gaming market to United States consumers, subject to a robust licensing and regulatory framework—
(A) to prevent underage wagering and otherwise to protect vulnerable individuals;
(B) to ensure the games are fair and are conducted honestly;
(C) to address the concerns of law enforcement; and
(D) to ensure that States and Indian tribes that wish to prohibit online poker may do so;
(3) licensed online poker operators should be limited, at least initially, to service providers that have an established track record of complying with a strict regulatory environment, have an established track record of providing fair games to consumers, and have significant goodwill and assets at stake, in addition to their online poker assets, to ensure they would comply with the strict regulatory framework and that they only conduct business in those States that have elected to opt-in; and
(4) Congress should ensure that any intrastate lottery transactions completed through the use of the Internet are limited to sales of tickets and related activities so that they do not allow for the circumvention of Congressional limits on Internet gambling on house-banked and other casino games, without unduly limiting the power of the states to offer intrastate lottery purchases.
Download the PDF of this bill to read the entire measure here
