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Title II — Strengthening of Unlawful Internet Gambling Enforcement Act of 2006

H.R. 2666 · 113th Congress · Jul 11, 2013 · Lineage

II Strengthening of Unlawful Internet Gambling Enforcement Act of 2006

Sec. 201 Financial transaction providers

(a)
In general— Subchapter IV of chapter 53 of title 31, United States Code, is amended by adding at the end the following:

“5368. Liability of financial transaction providers

“(a) Liability for certain financial activities and transactions—A financial transaction provider shall not be held liable for engaging in a financial activity or transaction, including a payments processing activity, in connection with a bet or wager permitted by the Internet Poker Freedom Act of 2013 or the Interstate Horseracing Act of 1978 (15 U.S.C. 3001 et seq.) unless the financial transaction provider has actual knowledge that the financial activity or transaction was conducted in violation of either such Act or any other applicable provision of Federal or State law.

“(b) No liability for blocking or refusing To honor certain transactions

“(1) In general—A financial transaction provider that takes an action described in paragraph (2) with respect to a transaction shall not be liable to any party for that action if the financial transaction provider takes the action because the originator of the transaction or a party to the transaction is—

“(A) a person or entity that is included in the list of unlicensed Internet gambling enterprises required by section 5369(a);

“(B) a person or entity that the financial transaction provider reasonably believes is included in that list;

“(C) a person or entity that is included in a list of unlicensed Internet gambling enterprises made available to the financial transaction provider by the Secretary under section 5369(a)(3);

“(D) a person or entity that the financial transaction provider reasonably believes is included in a list described in subparagraph (C);

“(E) a person or entity that is demonstrated to be an unlicensed Internet gambling enterprise based on information, other than a list described in subparagraph (C), that is made available to the financial transaction provider; or

“(F) a person or entity that the financial transaction provider reasonably believes is demonstrated to be an unlicensed Internet gambling enterprise based on information described in subparagraph (E).

“(2) Actions described—A financial transaction provider takes an action described in this paragraph if the financial transaction provider—

“(A) identifies and blocks a transaction;

“(B) prevents or prohibits the acceptance of its products or service in connection with a transaction or otherwise refuses to honor a transaction; or

“(C) closes an account or ends a financial relationship.”

(b)
Clerical amendment— The table of sections for chapter 53 of title 31, United States Code, is amended by adding at the end the following:
(c)
Technical correction— Section 5362(11)(B)(i) of title 31, United States Code, is amended by striking “section 903(6)(E)” and inserting “section 903(7)(E)”.

Sec. 202 List of unlicensed Internet gambling enterprises

(a)
In general— Subchapter IV of chapter 53 of title 31, United States Code, as amended by section 201(a), is further amended by adding at the end the following:

“5369. List of unlicensed Internet gambling enterprises

“(a) List of unlicensed Internet gambling enterprises

“(1) In general—The Director shall—

“(A) identify unlicensed Internet gambling enterprises in accordance with the procedures described in subsection (b);

“(B) not later than 120 days after the date of enactment of the Internet Poker Freedom Act of 2013, submit to the Secretary a list of unlicensed Internet gambling enterprises that includes the information described in paragraph (2); and

“(C) not less frequently than every 60 days thereafter, submit to the Secretary an updated list that reflects the results of subsequent investigations carried out under this section.

“(2) Information required—The information described in this paragraph is, with respect to each unlicensed Internet gambling enterprise included on the list required by paragraph (1), the following:

“(A) All known Internet Web site addresses of the enterprise.

“(B) The name of any person who controls, finances, manages, supervises, directs, or owns all or part of the enterprise (as such terms are used in section 1955 of title 18).

“(C) To the extent known, information identifying the financial agents and account numbers of the enterprise and the persons described in subparagraph (B).

“(3) Distribution of list—Not later than 10 days after receiving the list or an updated version of the list required by paragraph (1) from the Director, the Secretary shall—

“(A) post the information provided under subparagraphs (A) and (B) of paragraph (2) on the Internet Web site of the Department of the Treasury; and

“(B) provide to each person that is required to comply with the regulations prescribed pursuant to section 5364 a copy of the information included with the list required by paragraph (1) in an electronic format compatible with the list of Specially Designated Nationals and Blocked Persons maintained by the Office of Foreign Assets Control.

“(b) Procedures for identifying unlicensed Internet gambling enterprises

“(1) Investigations

“(A) Initial investigation—Not later than the date that is 60 days after the date of enactment of the Internet Poker Freedom Act of 2013, the Director shall complete an initial investigation of entities that appear to be unlicensed Internet gambling enterprises.

“(B) Subsequent investigations—After completing the initial investigation required by subparagraph (A), the Director shall regularly investigate entities that appear to be unlicensed Internet gambling enterprises.

“(2) Requests

“(A) In general—Any Federal, State, tribal, or local law enforcement official, any affected sports organization, any person directly harmed by unlicensed Internet gambling, any financial transaction provider, and any interactive computer service shall have the right, but not the obligation, to make a written request to the Director for the addition of any person to the list of unlicensed Internet gambling enterprises required by subsection (a).

“(B) Determinations; notice to person that submitted a request—Not later than 30 days after receiving a request under subparagraph (A), the Director shall—

“(i) determine if the request contains information sufficient to constitute a prima facie case that an entity is an unlicensed Internet gambling enterprise; and

“(ii) notify the person that submitted the request of the determination of the Director.

“(3) Notice—Not later than 30 days before including a person in the list of unlicensed Internet gambling enterprises required by subsection (a), the Director shall provide written notice to the person of the determination of the Director to include the person in the list.

“(4) Opportunity to contest

“(A) In general—A person that receives notice under paragraph (3) that the Director has determined to include the person in the list of unlicensed Internet gambling enterprises required by subsection (a) may, not later than 30 days after receiving the notice, contest the determination—

“(i) by submitting a written appeal to the Director; and

“(ii) by agreeing in the written appeal to submit to the jurisdiction of the United States.

“(B) Effect of not contesting—If a person described in subparagraph (A) does not contest the determination of the Director to include the person in the list of unlicensed Internet gambling enterprises required by subsection (a) in accordance with subparagraph (A), the Director shall include the person in the list.

“(5) Opportunity for hearing—The Director—

“(A) may not include a person that submits a written appeal pursuant to paragraph (4) in the list of unlicensed Internet gambling enterprises required by subsection (a) until the Director provides the person with an opportunity for a hearing; and

“(B) shall provide the person the opportunity for a hearing not later than 30 days after receiving the written appeal from the person.

“(6) Determinations after hearing—Not later than 10 days after the date of a hearing provided for a person under paragraph (5) (without regard to whether the person appears at the hearing), the Director shall—

“(A) determine if the person should be included in the list of unlicensed Internet gambling enterprises required by subsection (a); and

“(B) if the Director determines that the person should be included in the list, add the person to the list.

“(7) Injunctive relief

“(A) In general—A person described in subparagraph (B) may petition for injunctive relief in the United States District Court for the District of Columbia, which shall have exclusive jurisdiction to hear cases arising under this section.

“(B) Person described—A person described in this subparagraph is a person that the Director determines to include in the list of unlicensed Internet gambling enterprises required by subsection (a)—

“(i) after the person appears at a hearing described in paragraph (5); or

“(ii) that did not receive the notice required by paragraph (3).

“(C) Burden of proof—The petitioner shall have the burden of establishing that the person should not be included in the list of unlicensed Internet gambling enterprises required by subsection (a).

“(D) Standing—Only persons that the Director determines to include in the list of unlicensed Internet gambling enterprises required by subsection (a) and owners or operators of such enterprises shall have standing to contest the determination of the Director.

“(E) Available relief—The court may direct the Director and the Secretary not to add, or to remove, the petitioner from the list of unlicensed Internet gambling enterprises.

“(F) Unavailability of other remedies—There shall be no judicial review of a determination under this section other than pursuant to this paragraph.

“(c) Effect of list—A financial transaction provider shall be deemed to have actual knowledge that a person or entity is an unlicensed Internet gambling enterprise if—

“(1) the person or entity is included in the list of unlicensed Internet gambling enterprises required by subsection (a); or

“(2)

“(A) the person or entity is included in a list of unlicensed Internet gambling enterprises made available to the financial transaction provider by the Secretary under subsection (a)(3); and

“(B) information in addition to the list described in subparagraph (A) is available to the financial transaction provider that demonstrates that the person or entity is an unlicensed Internet gambling enterprise.

“(d) Definitions—In this section:

“(1) Director—The term Director means the Director of the Financial Crimes Enforcement Network appointed under section 310(b).

“(2) Sports organization—The term sports organization means an amateur sports organization or a professional sports organization (as those terms are defined in section 3701 of title 28).

“(3) Unlicensed Internet gambling enterprise—The term unlicensed Internet gambling enterprise means any person who, on or after the date of enactment of the Internet Poker Freedom Act of 2013—

“(A) violates a provision of section 5363; or

“(B) knowingly assists a person in conduct described in subparagraph (A).”

(b)
Clerical amendment— The table of sections at the beginning of such chapter 53, as amended by section 201(b), is further amended by adding at the end the following:

Sec. 203 Regulations

(a)
Regulations— Not later than 180 days after the date of enactment of this Act, the Secretary of the Treasury shall—
(1)
prescribe regulations to carry out sections 5368 and 5369 of title 31, United States Code, as added by sections 201(a) and 202(a), and publish such regulations in final form in the Federal Register; and
(2)
prescribe such regulations as the Secretary of the Treasury considers necessary to ensure compliance with chapter 2 of title I of Public Law 91–508 (12 U.S.C. 1951 et seq.) and subchapter II of chapter 53 of title 31, United States Code (commonly known, collectively, as the “Bank Secrecy Act”), by licensees, significant vendors to such licensees, and financial service providers to such licensees (as such terms are defined in section 102).
(b)
Exclusion of Board of Governors of the Federal Reserve System from requirement To prescribe regulations concerning prevention of restricted transactions— Subsection (a) of section 5364 of title 31, United States Code, is amended by striking “Before the end of the 270-day period beginning on the date of enactment of this subchapter, the Secretary and the Board of Governors of the Federal Reserve System, in consultation with the Attorney General, shall prescribe regulations (which the Secretary and the Board jointly determine to be appropriate)” and inserting “The Secretary shall prescribe regulations”.
(c)
Temporary suspension of certain regulations—
(1)
In general— Subject to paragraph (2), during the period beginning on the date of enactment of this Act and ending on the date set forth in subsection (d), part 233 of title 12, Code of Federal Regulations, and part 132 of title 31, Code of Federal Regulations, shall have no force or effect to the extent that those regulations require or impose any obligation that is inconsistent with the provisions of title I.
(2)
Previous violation— Paragraph (1) shall not apply with respect to any violation of a regulation described in such paragraph that occurred before the date of enactment of this Act.
(d)
Revision of regulations— Not later than 180 days after the date of enactment of this Act, the Secretary of the Treasury shall revise part 233 of title 12, Code of Federal Regulations, and part 132 of title 31, Code of Federal Regulations, to conform with the provisions of title I.
(e)
Annual report— Not later than 1 year after the date on which the Secretary of the Treasury prescribes regulations under this section, and annually thereafter, the Secretary shall submit to Congress a report on the list required by section 5369(a) of title 31, United States Code, as added by section 202(a), including the following:
(1)
The size of the list.
(2)
The number of persons and Web sites added to and removed from the list.
(3)
The number and description of challenges to inclusion on the list and a description of how such challenges were resolved.

Sec. 204 Conforming amendments

(a)
Duties and powers of the Director of the Financial Crimes Enforcement Network— Section 310(b)(2)(I) of title 31, United States Code, is amended by striking “subchapter II” and inserting “subchapters II and IV”.
(b)
Exclusion of licensed Internet poker facility operations from definition of unlawful Internet gambling enterprise— Section 5362(10) of such title is amended—
(1)
in subparagraph (D), by striking clause (iii);
(2)
by redesignating subparagraph (E) as subparagraph (F); and
(3)
by inserting after subparagraph (D) the following:

“(E) Licensed Internet poker facilities—The term unlawful Internet gambling does not include an activity carried out by an Internet poker facility, as such term is defined in section 102 of the Internet Poker Freedom Act of 2013, operated by a person under a license provided under title I of such Act in accordance with the provisions of such title.”