text: SECTION 1. SHORT TITLE.
  
      This Act shall be known as the ``Skill Game Protection Act''.
  
  SEC. 2. CONGRESSIONAL FINDINGS.
  
      The Congress finds as follows:
              (1) Millions of Americans enjoy competing with other 
          players in a variety of games of skill, including bridge, mah-
          jong, backgammon, and poker, over the Internet, where the 
          operator provides the Internet venue for competition and 
          receives a fee for such service.
              (2) For some Americans, these games provide their primary 
          source of income.
              (3) While each of these games contains an element of 
          chance, over any substantial interval, a player's success at 
          any of these games is determined by that player's relative 
          level of skill and is widely recognized as such.
              (4) Games where success is predominantly determined by the 
          skill of the players involved, as a matter of law and of 
          policy, are distinct from the games of chance traditionally 
          described and addressed in Federal and State gambling statutes.
              (5) Despite the fact that the language in section 1084 of 
          title 18, United States Code, commonly referred to as the 
          ``Wire Act'', has been interpreted by Federal courts as 
          applying only to betting on sports, some in law enforcement 
          interpret the section as prohibiting the acceptance of both 
          sports and non-sports betting through a communications device.
              (6) The Federal Government should take appropriate steps to 
          ensure that, with respect to skill games--
                      (A) minors are prevented from playing for money;
                      (B) persons with compulsive behavior should be 
                  identified and referred to treatment;
                      (C) operators of such games should not be 
                  vulnerable to, or participate in criminal or terrorist 
                  money laundering; and
                      (D) appropriate taxes are collected.
  
  SEC. 3. CLARIFICATION.
  
      Section 1084 of title 18, United States Code, is amended by adding 
  at the end the following new subsection: (f)
      ``(f) As used in this section, the term `bets or wagers' does not 
  include operating, or participation in, poker, chess, bridge, mahjong 
  or any other game where success is predominantly determined by a 
  player's skill, to the extent that--
              ``(1) the game provides for competition only between and 
          among participants, and not against the person operating the 
          game; and
              ``(2) the operator is in compliance with regulations issued 
          pursuant to section 5368 of title 31, United States Code.''.
  
  SEC. 4. SAFEGUARDS.
  
      (a) In General.--Subchapter IV of chapter 53 of title 31, United 
  States Code, is amended by adding at the end the following new section:
  ``Sec. 5368. Games of skill
      ``Before the end of the 180-day period beginning on the date of the 
  enactment of the Skill Game Protection Act, the Secretary shall 
  prescribe regulations requiring each person who operates a game of 
  skill on the Internet to maintain the following:
              ``(1) Appropriate safeguards to ensure that the individual 
          participant depositing funds is 18 years of age or older.
              ``(2) Appropriate safeguards to ensure that the individual 
          participant is physically located in a jurisdiction that does 
          not bar participation in the particular Internet games of skill 
          in which the individual participates at the time in the 
          individual participates.
              ``(3) Appropriate mechanisms to ensure that all taxes 
          relating to Internet games of skill due to Federal and State 
          governments and to Indian tribes from individual participants 
          are collected as required by at the time of any payment of any 
          proceeds of Internet games of skill.
              ``(4) Appropriate safeguards to combat fraud and money 
          laundering as may be prescribed by regulations issued by the 
          Secretary or a designee of the Secretary.
              ``(5) Appropriate safeguards to combat compulsive 
          participation in Internet games of skill.
              ``(6) Appropriate safeguards to protect the privacy and 
          security of any person engaged in Internet games of skill.''.
      (b) Clerical Amendment.--The table of sections for subchapter IV of 
  chapter 53 of title 31, United States Code, is amended by inserting 
  after the item relating to section 5367 the following new item:
  
  ``5368. Games of skill.''.
  
  SEC. 5. RULES OF CONSTRUCTION.
  
      (a) Nonapplicability to Games of Skill.--Section 5362(1)(E) of 
  title 31, United States Code, is amended--
              (1) by striking ``or'' at the end of clause (viii);
              (2) by striking the period at the end of clause (ix) and 
          inserting ``; or''; and
              (3) by adding at the end the following new clause:
                              ``(x) participation in any activity which 
                          does not constitute ``bets or wagers'' within 
                          the meaning of section 1084(f) of title 18 and 
                          is operated in compliance with the regulations 
                          issued pursuant to section 5368.''.
      (b) Nonapplicability to Non-Sports Wagering.--No provision of this 
  Act, or amendment made by this Act to any other provision of law, shall 
  be construed as implying that section 1084 of title 18, United States 
  Code, applies or applied to non-sports wagering before or after the 
  enactment of this Act.
target: Skill Game Protection Act - Amends federal criminal law to exempt from the prohibition against transmission of wagering information the operation or participation in poker, chess, bridge, mahjong or any other game where success is predominantly determined by a player's skill, to the extent that: (1) the game provides for competition only between and among participants, and not against the person operating the game; and (2) the operator is in compliance with federal regulations governing games of skill.
  
  Amends federal law governing monetary transactions to instruct the Secretary of the Treasury to prescribe regulations requiring each person who operates a game of skill on the Internet to maintain specified safeguards, including: (1) that the individual participant depositing funds is 18 years of age or older; (2) that the individual participant is physically located in a jurisdiction that does not bar participation in the particular Internet games of skill in which the individual participates; and (3) that all taxes relating to Internet games of skill due to federal and state governments and to Indian tribes from individual participants are collected at the time of any payment of any proceeds of Internet games of skill.
feat_title: To amend subchapter IV of chapter 53 of title 31, United States Code, and section 1084 of title 18 of such Code to clarify the applicability of such provisions to games of skill, and establish certain requirements with respect to such games, and for other purposes.