Internet Gambling Prohibition summarized

Do you want to know just what the “Unlawful Internet Gambling Funding Prohibition” is? I’ve printed out all 107 pages of the “Security and Accountability For Every Port Act of 2006,” AKA, the SAFE Port Act, and, skipping ahead to page 94, I’ll summarize the relevant bits for you.

Section 801 of the SAFE Port Act says that this section can be called the “Unlawful Internet Gambling Enforcement Act of 2006.” Good for us.

Section 802 starts getting substantive. It declares that Chapter 53 of title 31 (not Section 31, so Star Trek fans everywhere can calm down) of the United States Code–that’s federal law–will be amended by adding “Subchapter IV–Prohibition on Funding of Unlawful Internet Gambling.”

The new section 5361 (of title 31, remember), starts with a preamble, saying that Congress, an investigatory apex, has found that internet gambling is primarily funded through payment systems, credit cards, and wire transfers. Congress has also found that Internet gambling leads to debt collection problems. Also, nothing in the new law alters any existing law banning or permitting gambling within the US.

Section 5362
defines a bet, chiefly as risking something of value on “a contest of others, a sporting event, or a game subject to chance,” with the expectation that, if you win, you win something of value. This includes, specifically lotteries (and obviously sports betting) but not poker. It doesn’t include:
a) buying stocks legally,
c) banking,
d) games where you don’t risk anything but your time, or free credits
e) fantasy sports, where the result is NOT based on the performance of a single team, or combination of teams. Fantasy football is kosher, parlay cards are not.

This section further defines these terms: betting business, desginated payment system, financial transaction provider, Internet (wow!), interactive computer service, restricted transaction, secretary (of the Treasury), and state.

It further defines unlawful Internet gambling, which means, surprise, using the Internet to place, receive, or transmit a wager that is illegal under federal or state law.

This does not include intrastate transactions that are specifically legal within that state, and use appropriate age and location verification systems (which are not defined).

It also does not include specified horseracing transactions “allowed under Federal law,” or bets on tribal land, subject to federal law and state compacts.

So betting within states, within tribal lands, and on horseracing across state lines might be legal, but betting on sports across state lines is definitely prohibited.

Section 5363 ( is the meat of the bill. This declares that no one in the betting business can knowingly accept credit, EFTs, checks, or any other kind of payment, for gambling reasons. Period.

Section 5364 charges Treasury and the Board of Governors of the Federal Reserve System with developing policies and procedures that will let payment systems (banks, etc), identify and block “restricted transactions,” i.e., bets. This is long on responsibility and short on specifics, so it seems that Congress has ruled, and it is up to the money guys to figure out just how to identify gambling transactions.

Notably, one subsection indemnifies anyone who blocks a transaction that is actually restricted, or that they “reasonably believe” to be restricted. In other words, if your credit card company won’t send funds to someone, and you are hurt (if, for example, you lose out on a auction), you can’t sue them, if they say that they reasonably thought it might be a gambling transaction.

This section will be enforced by federal bank regulators and the Federal Trade Commission.

Section 5365 lays out the Civil Remedies that U.S. district courts–and states–can seek.

The feds can apply for injunctions to block what they think are restricted transactions, and so can states’ attorneys general. On Indian lands, the feds have enforcement authority, but nothing in this law supersedes the Indian Gaming Regulatory Act.

“Interactive Computer Services,” (we call them web sites) can be subject to “relief” if they don’t remove, or disable access to a link to a site that violates this act. This can be done after they are served notice and given a chance to block access. Sites don’t have to “affirmatively seek facts” (in other words, they don’t have to jump in the Batmobile and start looking around Gotham for links to gambling sites), but when told that they have to shut down access. They aren’t considered to be violating the Wire Act (section 1084 of Title 18) unless they are the people actually running or owning the gambling website.

Section 5366 tells all the scofflaws, in plain black print, that, if you violate section 5363, you can go to jail for as long as 5 years and fined; you can also be subject to a permanent injunction that prevents you from accepting bets.

Heading into the homestretch, section 5367 declares that, 5362 (2) notwithstanding, financial transaction providers, site owners, and service providers are liable if they actually own or control gambling sites, as opposed to just linking to them or processing their payments.

Section 802 then wraps up with a bang. In this case, it’s a “technical and conforming amendment” that amends the table of contents for good old section 53 of title 31.

But wait! There’s more! Section 803 finds that the feds should work with foreign governments to see if Internet gambling can be used for money laundering “or other crimes,” and encourages the Financial Action Task Force on Money Laundering to study how Internet gambling is being used for money laundering.

Finally, the Secretary of the Treasury is charged with submitting an annual report to Congress on any deliberations between the U.S. and other countries concerning Internet gambling. This, I would assume, means the Antigua/U.S. WTO case, and anything else that crops up.

And that’s it.

After about an hour of reading and summarizing, I’m done. I’ll leave further analysis to others; comment away.

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