S.D. Admin. R. 20:18:35:02

Current through Register Vol. 51, page 67, December 16, 2024

Section 20:18:35:02 - Internal control procedures

Either the licensee or sports wagering services provider or both shall submit a description of internal controls to the commission. The submission shall be made at least 30 days before sports wagering operations are to commence. All internal controls must be approved by the executive secretary prior to commencement of sports wagering operations. Either the licensee or sports wagering services provider, or both, shall submit to the commission any changes to the internal controls previously approved at least 15 days before the changes are to become effective unless otherwise directed by the executive secretary. Each licensee and sports wagering services provider and their employees shall be responsible for complying with all approved internal controls.

The submission describing the internal controls must include controls and reasonable methods for the following.

(1) Automated and manual risk management procedures;

(2) Employee management, including user access controls for all sports wagering personnel and segregation of duties;

(3) Identifying and reporting fraud and suspicious conduct, including identifying unusual wagering activity and reporting such activity to an independent integrity monitoring provider;

(4) Ensuring regulatory compliance;

(5) Anti-money laundering compliance standards;

(6) Accepting wagers and issuing pay outs, plus any additional controls for issuing pay outs in excess of $10,000;

(7) Accepting multiple wagers from one patron in a 24-hour cycle, including a process to identify patron structuring of wagers to circumvent recording and reporting requirements;

(8) All software applications that comprise the sports wagering system;

(9) Submitting and receiving approval of all types of wagers available to be offered by the system;

(10) Accounting for all integrated third-party systems;

(11) Reconciling assets and documents contained in a sports wagering area cashier's drawer and in sports wagering kiosks, including the drop and count procedures for sports wagering kiosks;

(12) Cashing winning tickets at the cage after the sports wagering area has closed, if applicable;

(13) Accepting value game chips for sports bets, if applicable;

(14) Issuance and acceptance of promotional funds and free bets for sports wagering;

(15) Identifying and preventing wagering by prohibited persons;

(16) Preventing past-post wagers from being placed;

(17) Paying winning wagers, in the event of a failure of the sports wagering system's ability to pay winning wagers;

(18) Filing an incident report with the commission for each sports wagering system failure and documenting the date, time, and reason for the failure along with the date and time the system is restored;

(19) Rejecting or refusing bets that which exceed the value set forth in SDCL 42-7B-14; and

(20) Any other information which may be required by the commission.

S.D. Admin. R. 20:18:35:02

48 SDR 014, effective 8/22/2021

General Authority: SDCL 42-7B-7, 42-7B-11(13).

Law Implemented: SDCL 42-7B-2.1(1), 42-7B-43.