South Dakota Administrative Code

Rule 20:18:34:11 Inspection and security procedures., 20:18:34:11. Inspection and security procedures. Prior to opening a roulette table for gaming activity, a licensed employee shall: (1) Inspect the roulette table and roulette wheel for any magnet or contrivance that would affe…

20:18:35:01. Definitions. As used in this chapter: (1) “Card,” the list of sporting events from which a patron can make selections for a given pool; (2) “Collegiate sporting event,” an athletic competition or event between two or more colleges or universities; (3) “Event category…

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 inter…

20:18:35:03. Internal controls -- Third party involvement. To the extent a third party is involved in or provides any of the internal controls required in these rules, the licensee's or sports wagering services provider’s controls, or the controls of both of them must document th…

20:18:35:04. Authorized and prohibited events and wager types. Before any licensee or sports wagering services provider may accept sports bets on an event category or sports bets of a particular wager type, the event category or wager type must be approved by the commission. Prio…

20:18:35:05. Event category and wager type approval. Unless already approved by the commission, a licensee or sports wagering provider shall request approval from the commission in the form and manner prescribed by the commission, subject to the following: (1) A request for appro…

20:18:35:06. Commission enforcement authority. The commission reserves the right to prohibit the acceptance of any sports bets and may order the cancellation of sports bets and require refunds on any sporting event or other event category, event, or wager type for which wagering …

20:18:35:07. Prohibited practices. In addition to the events prohibited by SDCL 42-7B-82, a licensee or sports wagering services provider may not accept sports bets on any of the following: (a) Horse and dog races; (b) Any event or where the majority of the athletes or competitor…

20:18:35:08. Prohibiting wagers for good cause -- Request from governing body. A sports governing body may request sports wagering information or may request the commission to restrict, limit, or exclude sports wagering on a particular event or a particular wager type. The reques…

20:18:35:09. Prohibiting wagers for good cause -- Commission notice and process. On receipt of a complete request from a sports governing body, the commission shall notify all licensees in writing. All licensees must be given an opportunity to respond to the request. The notifica…

20:18:35:10. Patron protection information. A licensee or sports wagering services provider shall provide patron protection information to individuals and patrons on demand. The patron protection information must include: (1) Information about potential risks associated with exce…

20:18:35:11. Wagering rules. A licensee or sports wagering services provider shall adopt comprehensive wagering rules, that must be approved by the commission to be effective. The wagering rules, together with any other information the commission considers appropriate, must be co…

20:18:35:12. Setting -- Display of available wagers. Available wagers must be displayed to the public and the gaming establishment’s closed-circuit television system. The display must include the odds and a brief description of the event and wagering proposition. A licensee or sp…

20:18:35:13. Allowable bets. Sports bets may only be made by patrons using the following: (a) Cash or sports wagering vouchers; (b) Cash equivalent; (c) Bonus or promotional credit; (d) Value gaming chips; (e) Funds within a wagering account; and (f) Any other means approved by t…

20:18:35:14. Refusing bets. A licensee or sports wagering services provider may refuse any sports bet at any time for what the licensee or sports wagering service provider considers good and sufficient reason. Such action must be logged and made available to the commission upon r…

20:18:35:15. Cancelling bets. A licensee or sports wagering services provider may, in their discretion, cancel an accepted sports bet for an obvious error. An obvious error must be defined in the licensee’s or sports wagering services provider’s internal controls. A licensee or s…

20:18:35:16. Prohibited persons. A licensee and a sports wagering services provider shall make reasonable efforts to prevent a prohibited person from placing a sports bet. If a licensee or sports wagering services provider detects or is notified of an individual suspected of bein…

20:18:35:17. Layoff wagers. A licensee or sports wagering services provider may place and accept layoff wagers. When placing a layoff wager, the licensee or sports wagering services provider placing a layoff wager shall disclose its identity to the licensee or sports wagering ser…

20:18:35:18. Tournaments, contests, and pools. No sports wagering tournament, contest, or pool may be conducted unless the licensee or sports wagering services provider, before the first time a tournament, contest, or pool type is offered, files written notice with the commission…

20:18:35:19. Tournament record keeping. Each licensee or sports wagering services provider shall maintain a record of each tournament, contest or pool it offers that must include all of the following: (1) Name or identification of the tournament, contest, or pool; (2) The date an…

20:18:35:20. Tournament payout, fees, taxes, and rake. Fees collected, less cash prizes paid, are subject to the wagering taxes pursuant to SDCL 42-7B-28, 42-7B-28.1 and 42-7B-28.2. In determining sports wagering net receipts, to the extent that cash prizes paid out exceed fees c…

20:18:35:21. Bonus or promotional wagering. A licensee or sports wagering services provider may conduct sports wagering bonus or promotional offers subject to the following: (1) A licensee or sports wagering services provider shall maintain a record of the following information f…

20:18:35:22. Taxation requirements. Each licensee or sports wagering services provider shall, at all times, comply with Internal Revenue Service (IRS) requirements for reporting and withholding proceeds from sports bets by patrons and shall send to patrons subject to IRS reportin…

20:18:35:23. Bank secrecy act compliance. A licensee or sports wagering services provider shall comply with all provisions of the Bank Secrecy Act of 1970, 31 U.S.C. §§ 5311 to 5332, applicable to the licensee’s or sports wagering services provider’s sports wagering operation. A …

20:18:35:24. Integrity monitoring -- Suspicious behavior. A licensee or sports wagering services provider shall have internal controls in place to identify and report unusual wagering activity to the commission. Source: 48 SDR 14, effective August 22, 2021. General Authority: SDC…

20:18:35:25. Integrity monitoring -- Suspension of wagering. A licensee or sports wagering services provider receiving a report of suspicious wagering activity must be permitted to suspend wagering on events or wager types related to the report but may only cancel sports bets rel…

20:18:35:26. Integrity monitoring -- Evaluation. The commission may require a licensee or sports wagering services provider to provide any hardware or software necessary to the commission or to an independent gaming laboratory approved by the commission for evaluation of its spor…

20:18:35:27. Integrity monitoring -- Maintaining records. A licensee or sports wagering services provider shall maintain records of all event integrity monitoring services and activities for a minimum of five years and must provide such records to the commission on request. Sourc…

20:18:35:28. Integrity monitoring -- Sharing of information. If the commission receives information regarding the integrity of events on which sports bets are made, the commission may, to the extent allowed in SDCL chapter 42-7B and this chapter, share such information with a lic…

20:18:35:29. Integrity monitoring -- Registration of independent integrity provider. A licensee may contract with an independent integrity monitoring provider to assist with the identification and reporting. An independent integrity monitoring provider shall register as a vendor …

20:18:35:30. Integrity monitoring -- Confidentiality. A licensee or sports wagering services provider shall maintain the confidentiality of information provided by a sports governing body to the licensee or sports wagering services provider related to unusual wagering activity, s…

20:18:35:31. Integrity monitoring -- Personnel and notification. A licensee or sports wagering services provider must employ or retain persons responsible for ensuring the operation and integrity of sports wagering and reviewing all reports of suspicious behavior. Unless otherwis…

20:18:35:32. Commission access to information. Licensees and sports wagering services providers shall detail the controls that are in place to assure that all information the commission requires to be maintained under SDCL chapter 42-7B or this chapter is appropriately segregated…

20:18:35:33. Anti-money laundering monitoring. The licensee or sports wagering services provider shall develop and implement anti-money laundering procedures and policies that adequately address the risks posed by sports wagering for the potential of money laundering and terroris…

20:18:35:34. Reserve requirement. A licensee or sports wagering services provider shall submit a plan to maintain a reserve in the amount necessary to ensure the security of funds held in wagering accounts for sports wagering and the ability to cover the outstanding sports wageri…

20:18:35:35. Form of reserve. The reserve must be in the form of: (1) Cash or cash equivalents maintained in a U.S. bank account segregated from the licensee's or sports wagering services provider’s operational funds; (2) An irrevocable letter of credit; (3) A bond; (4) Payment p…

20:18:35:36. Amount of reserve -- Transfer, access, and audit. The reserve must be not less than the greater of $25,000 or the sum of the following amounts: (1) The daily ending cashable balance of all patrons' wagering accounts; (2) Pending withdrawals; (3) Amounts accepted by t…

20:18:35:37. Reports of sports wagering operations. The sports wagering operator shall prepare reports supporting sports wagering revenue, wagering liability, winnings, and any other reports required by the internal controls. Additional reporting requirements may be specified by …

20:18:35:38. Retention of records. Unless otherwise expressed, all records required by this chapter must be maintained for three years. Redeemed sports wagering tickets and sports wagering vouchers as described in chapter 20:18:35, shall be retained for a period of 90 days from t…

20:18:35:39. Internal control procedures audit. Licensees shall have internal control procedures independently audited at least once every two years with the results documented in a written report, which shall be maintained and available to the commission. This requirement includ…

20:18:35:40. Annual financial audit. A financial audit of the sports wagering operations of the licensee shall be conducted by certified public accountants authorized to practice in the state of South Dakota and provided to the commission each year within 180 days of the licensee…

20:18:35:41. Self-exclusion plan. A licensee or sports wagering services provider conducting wagering on sports events shall develop a self-exclusion plan or voluntary exclusion plan to prevent any person, who informs the licensee of that person’s desire to participate in a self-…

20:18:35:42. Provider error -- Reimbursement. Unless otherwise approved by the commission, a sports wagering services provider shall be responsible for reimbursing a licensee for bets paid by the licensee as a result of the error or omission of the sports wagering services provid…

20:18:35.01:01. Sports wagering system. A licensee shall use a sports wagering system to offer, conduct, or operate sports wagering in accordance with applicable laws and this chapter. Only a licensee or its sports wagering services provider may process, accept, offer, or solicit…

20:18:35.01:02. Technical Standards. All equipment and systems integral to the conduct of sports wagering and advance deposit sports wagering must meet the specifications set forth in this chapter or other technical specifications as prescribed by the commission through internal …

20:18:35.01:03. Certification testing. Prior to conducting sports wagering, and annually thereafter, all equipment and systems integral to the conduct of sports wagering and advance deposit sports wagering must be submitted to a commission-designated independent testing laborator…

20:18:35.01:04. Location of servers. A sports wagering services provider shall locate the primary server other equipment responsible for the acceptance of patron wagers in a secure location within the city of Deadwood. The secure location selected must have adequate security, 24-…

20:18:35.01:05. Internet or cloud-based hosting. The executive secretary may approve the use of internet or cloud-based hosting of duplicate data or data not related to transactional wagering data upon written request by a sports wagering operation. Source: 48 SDR 14, effective A…

20:18:35.01:06. Integrity and security assessment. System integrity and security risk assessment must be performed annually on all sports wagering systems by an independent information technology security professional approved by the executive secretary. The system integrity and …

20:18:35.01:07. Integrity and security assessment -- Scope. The scope of the sports wagering system integrity and security assessment is subject to the approval of the commission and must include: (1) A vulnerability assessment of digital platforms, mobile applications, internal,…