§5362 — Title 31 Money and Finance | U.S. Code

Summary

Defines key words used to control online gambling and how money moves for bets. It says what counts as a bet, which businesses are covered, who handles payments, what “unlawful Internet gambling” means, and a few other basic terms. “bet or wager” — risking money or something valuable on a contest, game, lottery, or similar scheme, but not things like securities, regulated commodity trades, insurance, bank deposits, some free contests, or certain fantasy games that meet specific rules. “business of betting or wagering” — the gambling business itself, not payment companies, internet platforms, or phone services. “designated payment system” — a payment system that Treasury and the Federal Reserve say could be used to help banned transactions. “financial transaction provider” — banks, card issuers, money transmitters, payment networks, ATM operators, or others who move money. “Internet” — the global network of interconnected computer networks. “interactive computer service” — online services as defined in federal law (section 230(f)). “restricted transaction” — any payment or transfer that someone is not allowed to accept under the rules. “Secretary” — the Secretary of the Treasury. “State” — any U.S. state, the District of Columbia, or U.S. territory. “unlawful Internet gambling” — placing or sending a bet online that breaks federal or state law where the bet starts or is received; it excludes certain in‑state, tribal, and horse‑racing activities that meet specific rules and safeguards.

Title 31, §5362

Money and Finance — Source: USLM XML via OLRC

In this subchapter:

(1)The term “bet or wager”—

(A)means the staking or risking by any person of something of value upon the outcome of a contest of others, a sporting event, or a game subject to 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);

(C)includes any scheme of a type described in section 3702 of title 28;

(D)includes any instructions or information pertaining to the establishment or movement of funds by the bettor or customer in, to, or from an account with the business of betting or wagering; and

(E)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 11 So in original. Probably should be followed by a closing parenthesis. for the purchase or sale of securities (as that term is defined in section 3(a)(10) of that Act);

(ii)any transaction conducted on or subject to the rules of a registered entity or exempt board of trade under the Commodity Exchange Act;

(iii)any over-the-counter derivative instrument;

(iv)any other transaction that—

(I)is excluded or exempt from regulation under the Commodity Exchange Act; or

(II)is exempt from State gaming or bucket shop laws under section 12(e) of the Commodity Exchange Act or section 28(a) of the Securities Exchange Act of 1934;

(v)any contract of indemnity or guarantee;

(vi)any contract for insurance;

(vii)any deposit or other transaction with an insured depository institution;

(viii)participation in any game or contest in which participants do not stake or risk anything of value other than—

(I)personal efforts of the participants in playing the game or contest or obtaining access to the Internet; or

(II)points or credits that the sponsor of the game or contest provides to participants free of charge and that can be used or redeemed only for participation in games or contests offered by the sponsor; or

(ix)participation in any fantasy or simulation sports game or educational game or contest in which (if the game or contest involves a team or teams) no fantasy or simulation sports team is based on the current membership of an actual team that is a member of an amateur or professional sports organization (as those terms are defined in section 3701 of title 28) and that meets the following conditions:

(I)All prizes and awards offered to winning participants are established and made known to the participants in advance of the game or contest and their value is not determined by the number of participants or the amount of any fees paid by those participants.

(II)All winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individuals (athletes in the case of sports events) in multiple real-world sporting or other events.

(III)No winning outcome is based—

(aa)on the score, point-spread, or any performance or performances of any single real-world team or any combination of such teams; or

(bb)solely on any single performance of an individual athlete in any single real-world sporting or other event.

(2)The term “business of betting or wagering” does not include the activities of a financial transaction provider, or any interactive computer service or telecommunications service.

(3)The term “designated payment system” means any system utilized by a financial transaction provider that the Secretary and the Board of Governors of the Federal Reserve System, in consultation with the Attorney General, jointly determine, by regulation or order, could be utilized in connection with, or to facilitate, any restricted transaction.

(4)The term “financial transaction provider” means a creditor, credit card issuer, financial institution, operator of a terminal at which an electronic fund transfer may be initiated, money transmitting business, or international, national, regional, or local payment network utilized to effect a credit transaction, electronic fund transfer, stored value product transaction, or money transmitting service, or a participant in such network, or other participant in a designated payment system.

(5)The term “Internet” means the international computer network of interoperable packet switched data networks.

(6)The term “interactive computer service” has the meaning given the term in section 230(f) of the Communications Act of 1934 (47 U.S.C. 230(f)).

(7)The term “restricted transaction” means any transaction or transmittal involving any credit, funds, instrument, or proceeds described in any paragraph of section 5363 which the recipient is prohibited from accepting under section 5363.

(8)The term “Secretary” means the Secretary of the Treasury.

(9)The term “State” means any State of the United States, the District of Columbia, or any commonwealth, territory, or other possession of the United States.

(10)(A)The term “unlawful Internet gambling” means to place, receive, or otherwise knowingly transmit a bet or wager by any means which involves the use, at least in part, of the Internet where such bet or wager is unlawful under any applicable Federal or State law in the State or Tribal lands in which the bet or wager is initiated, received, or otherwise made.

(B)The term “unlawful Internet gambling” does not include placing, receiving, or otherwise transmitting a bet or wager where—

(i)the bet or wager is initiated and received or otherwise made exclusively within a single State;

(ii)the bet or wager and the method by which the bet or wager is initiated and received or otherwise made is expressly authorized by and placed in accordance with the laws of such State, and the State law or regulations include—

(I)age and location verification requirements reasonably designed to block access to minors and persons located out of such State; and

(II)appropriate data security standards to prevent unauthorized access by any person whose age and current location has not been verified in accordance with such State’s law or regulations; and

(iii)the bet or wager does not violate any provision of—

(I)the Interstate Horseracing Act of 1978 (15 U.S.C. 3001 et seq.);

(II)chapter 178 of title 28 (commonly known as the “Professional and Amateur Sports Protection Act”);

(III)the Gambling Devices Transportation Act (15 U.S.C. 1171 et seq.); or

(IV)the Indian Gaming Regulatory Act (25 U.S.C. 2701 et seq.).

(C)The term “unlawful Internet gambling” does not include placing, receiving, or otherwise transmitting a bet or wager where—

(i)the bet or wager is initiated and received or otherwise made exclusively—

(I)within the Indian lands of a single Indian tribe (as such terms are defined under the Indian Gaming Regulatory Act); or

(II)between the Indian lands of 2 or more Indian tribes to the extent that intertribal gaming is authorized by the Indian Gaming Regulatory Act;

(ii)the bet or wager and the method by which the bet or wager is initiated and received or otherwise made is expressly authorized by and complies with the requirements of—

(I)the applicable tribal ordinance or resolution approved by the Chairman of the National Indian Gaming Commission; and

(II)with respect to class III gaming, the applicable Tribal-State Compact;

(iii)the applicable tribal ordinance or resolution or Tribal-State Compact includes—

(I)age and location verification requirements reasonably designed to block access to minors and persons located out of the applicable Tribal lands; and

(II)appropriate data security standards to prevent unauthorized access by any person whose age and current location has not been verified in accordance with the applicable tribal ordinance or resolution or Tribal-State Compact; and

(iv)the bet or wager does not violate any provision of—

(I)the Interstate Horseracing Act of 1978 (15 U.S.C. 3001 et seq.);

(II)chapter 178 of title 28 (commonly known as the “Professional and Amateur Sports Protection Act”);

(III)the Gambling Devices Transportation Act (15 U.S.C. 1171 et seq.); or

(IV)the Indian Gaming Regulatory Act (25 U.S.C. 2701 et seq.).

(D)(i)The term “unlawful Internet gambling” shall not include any activity that is allowed under the Interstate Horseracing Act of 1978 (15 U.S.C. 3001 et seq.).

(ii)Nothing in this subchapter may be construed to preempt any State law prohibiting gambling.

(iii)It is the sense of Congress that this subchapter shall not change which activities related to horse racing may or may not be allowed under Federal law. This subparagraph is intended to address concerns that this subchapter could have the effect of changing the existing relationship between the Interstate Horseracing Act and other Federal statutes in effect on the date of the enactment of this subchapter. This subchapter is not intended to change that relationship. This subchapter is not intended to resolve any existing disagreements over how to interpret the relationship between the Interstate Horseracing Act and other Federal statutes.

(E)The intermediate routing of electronic data shall not determine the location or locations in which a bet or wager is initiated, received, or otherwise made.

(11)(A)The terms “credit”, “creditor”, “credit card”, and “card issuer” have the meanings given the terms in section 103 of the Truth in Lending Act (15 U.S.C. 1602).

(B)The term “electronic fund transfer”—

(i)has the meaning given the term in section 903 of the Electronic Fund Transfer Act (15 U.S.C. 1693a), except that the term includes transfers that would otherwise be excluded under section 903(6)(E) of that Act; and

(ii)includes any fund transfer covered by Article 4A of the Uniform Commercial Code, as in effect in any State.

(C)The term “financial institution” has the meaning given the term in section 903 of the Electronic Fund Transfer Act, except that such term does not include a casino, sports book, or other business at or through which bets or wagers may be placed or received.

(D)The term “insured depository institution”—

(i)has the meaning given the term in section 3(c) of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)); and

(ii)includes an insured credit union (as defined in section 101 of the Federal Credit Union Act).

(E)The terms “money transmitting business” and “money transmitting service” have the meanings given the terms in section 5330(d) (determined without regard to any regulations prescribed by the Secretary thereunder).

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 3(a)(47) and 28(a) of the Securities Exchange Act of 1934, referred to in par. (1)(E)(i), (iv)(II), are classified to section 78c(a)(47) and 78bb(a), respectively, of Title 15, Commerce and Trade. The Commodity Exchange Act, referred to in par. (1)(E)(ii), (iv)(II), is act Sept. 21, 1922, ch. 369, 42 Stat. 998, which is classified generally to chapter 1 (§ 1 et seq.) of Title 7, Agriculture. section 12(e) of the Act is classified to section 16(e) of Title 7. For complete classification of this Act to the Code, see section 1 of Title 7 and Tables. The Interstate Horseracing Act of 1978, referred to in par. (10)(B)(iii)(I), (C)(iv)(I), (D)(i), (iii), is Pub. L. 95–515, Oct. 25, 1978, 92 Stat. 1811, which is classified generally to chapter 57 (§ 3001 et seq.) of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see

Short Title

note set out under section 3001 of Title 15 and Tables. The Gambling Devices Transportation Act, referred to in par. (10)(B)(iii)(III), (C)(iv)(III), is act Jan. 2, 1951, ch. 1194, 64 Stat. 1134, which is classified generally to chapter 24 (§ 1171 et seq.) of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see

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note set out under section 1171 of Title 15 and Tables. The Indian Gaming Regulatory Act, referred to in par. (10)(B)(iii)(IV), (C)(i), (iv)(IV), is Pub. L. 100–497, Oct. 17, 1988, 102 Stat. 2467, which is classified principally to chapter 29 (§ 2701 et seq.) of Title 25, Indians. For complete classification of this Act to the Code, see

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note set out under section 2701 of Title 25 and Tables. The date of the enactment of this subchapter, referred to in par. (10)(D)(iii), is the date of enactment of Pub. L. 109–347, which was approved Oct. 13, 2006. section 101 of the Federal Credit Union Act, referred to in par. (11)(D)(ii), is classified to section 1752 of Title 12, Banks and Banking.

§5362 Definitions

Summary

Title 31, §5362

Notes & Related Subsidiaries

Editorial Notes

References in Text

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