Mich. Admin. Code R. 432.744

Current through Vol. 24-19, November 1, 2024

Section R. 432.744 - Reserve requirement

Rule 744.

(1) A sports betting operator or internet sports betting platform provider must maintain a reserve in the amount necessary to ensure the security of funds held in internet sports betting accounts and the ability to cover the outstanding internet sports betting liability. The reserve must be in the form of:

(a) Cash or cash equivalents maintained in a U.S. bank account segregated from the sports betting operator's or internet sports betting platform providers operational funds.

(b) An irrevocable letter of credit.

(c) A bond.

(d) Any other form acceptable to the board.

(e) Any combination of the allowable forms described in subdivisions (a) to (d) of this subrule.

(2) The reserve must be not less than the sum of the following:

(a) The daily ending cashable balance of all authorized participants internet sports betting accounts.

(b) Pending withdrawals.

(c) Amounts accepted by the sports betting operator or internet sports betting platform provider on internet sports betting wagers whose outcomes have not been determined.

(d) Amounts owed but unpaid on winning internet sports betting wagers through the period established by the sports betting operator or internet sports betting platform provider for honoring winning internet sports betting wagers.

(3) Funds held in internet sports betting accounts must not be automatically transferred by a sports betting operator or internet sports betting platform provider. A sports betting operator or internet sports betting platform provider must not require an authorized participant to transfer funds from his or her internet sports betting account, in order to circumvent this rule.

(4) Amounts available to authorized participants for play that are not redeemable for cash may be excluded from the reserve computation.

(5) On request, the board may allow a sports betting operator or internet sports betting platform provider to combine the reserve for all of its Michigan internet sports betting or all of its Michigan internet gaming conducted under the lawful internet gaming act, 2019 PA 152, MCL 432.301 to MCL 432.322, or both.

(6) A sports betting operator or internet sports betting platform provider must have access to all internet sports betting account and transaction data to ensure the amount of its reserve is sufficient. Unless otherwise directed by the board, a sports betting operator or internet sports betting platform provider must file a monthly attestation with the board, in the form and manner prescribed by the board, that funds have been safeguarded under this rule.

(7) The board may audit a sports betting operators or internet sports betting platform providers reserve at any time and may direct a sports betting operator or internet sports betting platform provider to take any action necessary to ensure the purposes of this rule are achieved, including but not limited to requiring the sports betting operator or internet sports betting platform provider to modify the form of its reserve or increase the amount of its reserve.

Mich. Admin. Code R. 432.744

2020 MR 22, Eff. 12/2/2020