Internet Gambling Prohibition and Enforcement Act - Title I: Modernization of the Wire Act of 1961 - (Sec. 101) Amends the federal criminal code to expand the definition of "wire communication facility" (renamed "communication facility") to include fixed or mobile (i.e., wireless) communication facilities.
Defines "bets and wagers" to include bets for contests, sporting events, games predominantly subject to chance, and lotteries. Excludes from such definition: (1) activities governed by securities laws: (2) transactions under the Commodity Exchange Act; (3) over-the-counter derivative instruments; (4) contracts of indemnity or guarantee; (4) contracts for life, health, or accident insurance; and (5) reward programs or contests conducted by businesses.
(Sec. 102) Modifies existing prohibitions against interstate gambling to prohibit the use of a communication facility to transmit: (1) bets or wagers; (2) information assisting in the placing of bets or wagers; or (3) a communication which entitles the recipient to receive money or credit as a result of bets or wages or for information assisting in the placing of bets or wagers.
Prohibits any individual from accepting, in connection with the placing of bets or wagers to or from the United States: (1) credit, or the proceeds of credit; (2) electronic funds transfers; (3) checks, drafts, or similar instruments; or (4) the proceeds of any other form of financial transaction as prescribed by Treasury regulations.
Imposes a fine and/or prison term of up to five years for violations.
Requires any common carrier which receives notice of a violation of this Act by one of its communication facilities to discontinue or refuse service to such facility. Grants such common carrier immunity from liability for discontinuing or refusing such service.
(Sec. 103) Grants U.S. district courts original and exclusive jurisdiction to prevent and restrain violations of the Internet gambling ban. Authorizes the Attorney General or any state attorney general to institute proceeding to enforce an Internet gambling ban.
(Sec. 104) Authorizes appropriations to the Department of Justice in FY2007-FY2010 for investigations and prosecutions of unlawful Internet gambling.
(Sec. 105) Declares that nothing in this Act may be construed to prohibit any activity allowed under the Interstate Horseracing Act or to preempt any state law prohibiting gambling.
(Sec. 106) Expresses the sense of Congress that this Act does not address the legality of certain horse racing activities under federal law.
Title II: Policies and Procedures Required to Prevent Payments for Unlawful Gambling - Amends the federal criminal code to prohibit persons engaged in a gambling business from knowingly accepting credit, electronic fund transfers, checks, drafts, or similar financial instruments or the proceeds of any other financial transaction in connection with unlawful Internet gambling (this prohibition is defined by this Act as a "restricted transaction").
Directs the Secretary of the Treasury and the Board of Governors of the Federal Reserve System to prescribe regulations to identify and block restricted transactions. Grants immunity from civil liability for blocking a restricted transaction or one which is reasonably believed to be a restricted transaction.
Title III: Internet Gambling in or through Foreign Jurisdictions - Calls upon the U.S. government, in deliberations with foreign governments, to: (1) encourage cooperation by foreign governments in identifying whether Internet gambling operations are being used for money laundering, corruption, or other crimes; (2) advance policies that promote international cooperation in enforcing this Act; and (3) encourage the Financial Action Task Force on Money Laundering to study the extent to which Internet gambling operations are being used for money laundering purposes.
Directs the Secretary of the Treasury to report to Congress annually on deliberations between the United States and other countries on Internet gambling.