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CHAPTER 20:04:33
MULTI-JURISDICTIONAL HUBS
Section
20:04:33:01 Definitions.
20:04:33:02 Location of wager.
20:04:33:03 Deposit of money.
20:04:33:04 Pari-mutuel tax.
20:04:33:05 Returns and reports -- Time frames -- Penalties.
20:04:33:06 Take-out rates for non-merged pools, Repealed.
20:04:33:07 Required system configuration and elements.
20:04:33:07.01 Totalizator room requirements.
20:04:33:07.02 Uninterruptible power supply (UPS).
20:04:33:07.03 Independent monitoring system.
20:04:33:07.04 System errors.
20:04:33:07.05 End-of-day reports.
20:04:33:07.06 Other standard and special reports.
20:04:33:07.07 On-line logs.
20:04:33:07.08 Off-line log.
20:04:33:08 Prohibited practices.
20:04:33:09 Disciplinary action.
20:04:33:10 Unsuitability determinations.
20:04:33:11 Suitability determinations.
20:04:33:12 Exclusion grounds.
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20:04:33:13 Preparation of exclusion list.
20:04:33:14 Notice of exclusion.
20:04:33:15 Right to contest exclusion.
20:04:33:16 Multi-jurisdictional totalizator hub license.
20:04:33:17 Consideration of applications.
20:04:33:18 Licenses not transferable.
20:04:33:19 Interest in license -- Prior approval.
20:04:33:20 Background investigation.
20:04:33:21 Individuals subject to application and background investigations.
20:04:33:22 Criminal records check.
20:04:33:23 Authority to conduct background investigation.
20:04:33:24 Failure to allow investigation.
20:04:33:25 Application for multi-jurisdictional totalizator hub license.
20:04:33:26 Operating plan.
20:04:33:27 Changes in operating plan.
20:04:33:28 Penalty for failure to follow operating plan, commission order, or other rules and
laws.
20:04:33:29 Initial system audit.
20:04:33:30 Term of license.
20:04:33:31 Application and audit fees.
20:04:33:32 Background investigation fee.
20:04:33:33 Bond.
20:04:33:34 Claims for nonpayment.
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20:04:33:35 Hub employee licensing.
20:04:33:36 Prohibition against licensure of law enforcement officials.
20:04:33:37 Licensure qualification.
20:04:33:38 Categories of personnel licensing.
20:04:33:39 Licenses revocable.
20:04:33:40 Reapplication upon denial.
20:04:33:41 Disciplinary action for false statements.
20:04:33:42 Proscribed conduct.
20:04:33:43 Discovery of violations.
20:04:33:44 Termination of employment of key employee or hub employee.
20:04:33:45 Key employee.
20:04:33:46 Review of key licensee status.
20:04:33:47 Power of commission to review and audit -- Disciplinary action.
20:04:33:48 Annual audited financial statements -- Disciplinary action.
20:04:33:49 Change of hub business year.
20:04:33:50 Other gaming activities, duty to notify commission.
20:04:33:51 Business contracts.
20:04:33:52 Legal process and pleadings.
20:04:33:53 Confidentiality.
20:04:33:54 Compliance with the Interstate Horse Racing Act.
20:04:33:55 Racing rules apply.
20:04:33:56 Establishing an account.
20:04:33:57 Account application verification.
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20:04:33:58 Account identification number.
20:04:33:59 Secure personal identification code.
20:04:33:60 Information to be provided to account holder.
20:04:33:61 Accounts nontransferable.
20:04:33:62 Hub licensee may close or refuse to open accounts.
20:04:33:63 Minimum account balance.
20:04:33:64 Hub licensee may refuse deposits.
20:04:33:65 Hub licensee may suspend or close accounts.
20:04:33:66 Account credits.
20:04:33:67 Account debits.
20:04:33:68 Inactive accounts.
20:04:33:69 Deceased account holder.
20:04:33:70 Posting of credits.
20:04:33:71 Payment of interest not required.
20:04:33:72 Manner of wagers approved by commission.
20:04:33:73 Closing hub wagering.
20:04:33:74 Refusal of wagers.
20:04:33:75 Account security - Account holder responsibility.
20:04:33:76 Payment on winning wagers -- Refunds.
20:04:33:77 Errors in accounts.
20:04:33:78 Monthly account statements.
20:04:33:79 Account holder’s principal residence address.
20:04:33:80 Wager information confidential -- Disciplinary action for violations.
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20:04:33:81 Patron protection information.
20:04:33:82 Internal controls -- Third party involvement.
20:04:33:83 Wagering rules.
20:04:33:84 Display of available wagers.
20:04:33:85 Allowable bets.
20:04:33:86 Refusing bets.
20:04:33:87 Prohibited persons.
20:04:33:88 Bonus or promotional wagering.
20:04:33:89 Taxation requirements.
20:04:33:90 Bank secrecy act compliance.
20:04:33:91 Commission access to information.
20:04:33:92 Anti-money laundering monitoring.
20:04:33:93 Reports of online pari-mutuel wagering operations.
20:04:33:94 Retention of records.
20:04:33:95 Internal control procedures audit.
20:04:33:96 Annual financial audit.
20:04:33:97 Self-exclusion plan.
20:04:33:98 Online wagering system.
20:04:33:99 Licensee's duty to report criminal or disciplinary proceeding -- Commission may
share information.
20:04:33:100 Certain persons prohibited from betting.
20:04:33:101 Location detection requirements.
20:04:33:102 Location of wager.
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20:04:33:103 System errors.
20:04:33:104 Bond.
20:04:33:105 Confidentiality.
20:04:33:106 Confidentiality -- Exceptions.
20:04:33:107 Manner of wagers approved by commission.
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20:04:33:01. Definitions. Words and phrases defined in §§ 20:04:31:01 and 20:04:32:01 have
the same meaning when used in this chapter. Terms used in this article chapter mean:
(1) "Account," an account for account wagering with a specific identifiable record of
deposits, wagers, and withdrawals established by an account holder and managed by a
hub licensee or advance deposit wagering licensee;
(2) "Account application," the form or forms and other required submissions received from
an applicant with the intent of opening an account;
(3) "Account holder," a natural person who successfully completed an application and for
whom a hub licensee or advance deposit wagering licensee has opened an account;
(4)(3) "Account wagering," a process of making pari-mutuel wagers in which a natural person
may deposit money in an account with a hub licensee or advance deposit wagering
licensee and then uses the current balance to pay for pari-mutuel wagering conducted by
the hub licensee or advance deposit wagering licensee;
(4) "Advance deposit wagering licensee," a licensed operator, route operator, or sports
wagering services provider who manages wagering accounts in which an eligible
individual may deposit money into an account and use the balance to pay for bets as
allowed and regulated by the commission;
(5) "Advance deposit pari-mutuel wagering," wagering offered online or via a mobile
application by a hub licensee or advance deposit wagering licensee who has taken a
deposit by an account holder in advance of online or mobile application wagering on
horse or greyhound racing;
(57)(6) "Batch betting," a process where the wagering information for more than six wagering
transactions is accumulated and sent in one data packet from the account holder’s holder's
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computer or other electronic device to the multi-jurisdictional totalizator hub’s hub's
wager processing server or to the totalizator providing service to the multi-jurisdictional
totalizator hub with a single, or no, human transmittal action;
(68)(7) "Bet streaming," a process where the wagering information for more than six wagering
transactions is accumulated and sent as a data flow from the account holder’s holder's computer
or other electronic device to a multi-jurisdictional totalizator hub’s hub's wager processing server
or to the totalizator providing service to the multi-jurisdictional totalizator hub with a single, or
no, human transmittal action;
(79)(8) "Confidential account information," includes the following information:
(a) The amount of money credited to, debited from, withdrawn from, or present in
any particular account holder’s account;
(b) The amount wagered by a particular account holder on any race or series of races;
(c) The account number and secure personal identification code, or codes, of a
particular account holder;
(d) The identities of the particular entries on which the account holder is wagering or
has wagered; and
(e) Unless otherwise authorized by the account holder the disclosure of the The name,
address, and other information in the possession of a hub licensee that identifies the account
holder to anyone other than a representative of the commission, unless otherwise authorized by
the account holder;
(810)(9) "Closed-loop subscriber based system," a device or combination of inter-
connected devices authorized:
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(a) Authorized and operated exclusively for the purpose of receiving wagering
information, or for placing, receiving, or otherwise making a wager; and to
(b) To which a person must subscribe to be able to send wagering information to
and have that information used to place, receive, or otherwise make, a wager;
(911)(10) "Computer robotic betting," a computerized process used to send the wagering
information for more than six wagering transactions to a multi-jurisdictional totalizator
hub’s hub's wager processing server or to the totalizator providing service to a multi-
jurisdictional hub with a single, or no, human transmittal action;
(11) "Credits," all positive inflows of money to an account;
(1113)(12) "Debits," all negative outflow of money from an account;
(1214)(13) "Deposit," a payment of money by cash, check, money order, credit card, debit
card, or electronic funds transfer made by an account holder to the account holder's
account;
(1315)(14) "Hub," a multi-jurisdictional totalizator hub;
(1416)(15) "Hub contract," for the purposes of this chapter, a hub contract is any contract:
(a) Between hub licensees;
(b) Between a licensee and a nonlicensee that relates to the employment of licensed
personnel;
(c) Between a licensee and a nonlicensee that relates to the acquisition, or use, of
capital assets used by the licensee in the business of pari-mutuel wagering;
(d) Between a licensee and a nonlicensee that relates to the earnings or profits of the
licensee from the business of pari-mutuel wagering;
(e) With a pari-mutuel facility; or
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(f) Any other contract which Which affects the proprietary or financial interest of the
licensee's business or license;
(1517)(16) "Hub employee," any a person employed by a multi-jurisdictional totalizator hub
licensee;
(1618)(17) "Independent real time monitoring system," a system approved by the
commission for the purpose of immediate and continuous analysis of wagering and other pari-
mutuel systems data in order to detect suspect wagering transactions or other activity indicating a
possible problem relating to the integrity of the pari-mutuel system, and which transmits
transactional level data to a wagering security database;
(1719)(18) "Initial system audit," is a review, both pre-installation and post-installation, of
the audio and visual simulcasting and wagering system proposed to be used by a multi-
jurisdictional hub licensee;
(1820)(19) "Key employee," any executive, employee, or agent of a multi-jurisdictional
totalizator hub licensee having the power to exercise a significant influence over decisions
concerning any part of the operation of a hub licensee;
(20) “Location detection procedure” means a process to reasonably detect the location
of an account holder when the account holder is attempting to access the system and place an
advance deposit wager;
(1922)(21) "Multi-jurisdictional totalizator hub," any business through which a wager can be
placed and entered into an intrastate or interstate pari-mutuel pool that is carried on the
business’s business's wagering menu, by an individual a natural person who sends
wagering transaction information either telephonically or by other electronic means
directly to the business without using the facilities or equipment of a simulcast site and
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who has deposited funds into an account with the business prior to sending the wagering
transaction information;
(2023)(22) "Natural person," any a person at least 18 eighteen years of age, but does not
include any excluding a corporation, partnership, limited liability company, trust, or
estate;
(23) “Online pari-mutuel wagering system” means an internet-based or mobile-application-
based betting platform, including all hardware and components where wagers of the same
type are grouped into a common pool by a multi-jurisdictional totalizator hub using
advance deposit wagering;
(2125)(24) "Pari-mutuel facility," any a racetrack, off-site location, account wagering
company, or other location at which pari-mutuel wagers are accepted, made, paid, or
processed;
(2226)(25) "Pari-mutuel ticket," a printed document or other electronic record which contains
information pertaining to a pari-mutuel wager or wagers that have has been authorized
and accepted for purposes of participation in a pari-mutuel pool;
(2327)(26) "Principal residence address," that the place where the natural person submitting
an application for an account resides for at least fifty percent of the calendar year;
(2428)(27) "Proper identification," a form of identification accepted in the normal course of
business establishing the identity of a person;
(2529)(28) "Rebating," a practice of crediting an account with money or sending an account
holder money or funds in any manner based upon the amount of money the account holder
wagers or accepting less than the full price of any wager placed;
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(2630)(29) "Secure personal identification code," an alpha-numeric character code chosen by
an account holder as a means of verification that a wager or account transaction is authorized by
the account holder;
(2732)(30) "Wager processing server," a computer or an inter-connected group of computers
through which all wagering transaction information is received, recorded, and routed to the
totalizator and secondary recording devices for processing and combining with approved pari-
mutuel pools;
(2833)(31) "Wagering transaction," a single wager stating the amount of money to be
wagered, the type of wager, and the runner or runners to be wagered on. Each "win," "place," or
"show" wager is considered one wagering transaction. Multiple runners in "daily doubles,"
"quinellas," "exactas," "trifectas," "pick-N," or other multi-horses or, multi-greyhounds, or multi-
leg wagers can be "wheeled" or "boxed" into a single wagering transaction;
(2934)(34) "Withdrawal," a payment of money from an account by the hub licensee to the
account holder when properly requested by the account holder; and
(3035)(35) "Withdrawal slip," a form provided by a hub licensee for use by an account holder
to withdraw funds from an account.
Source: 32 SDR 32, effective August 30, 2005; 34 SDR 200, effective January 29, 2008;
38 SDR 172, effective April 23, 2012.
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-56(13)(15)(16), 42-7-58.1, 42-7-107.
Cross References:
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Definitions, § 20:04:31:01.
Definitions, § 20:04:32:01.
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20:04:33:06. Take-out rates for non-merged pools. The multi-jurisdictional totalizator hub
licensee as part of the operating plan, or an update to the plan, may define a wagering pool not to
be merged with the wagering pools of the race track where the race is being run live and set the
take-out rate for the pool, subject to approval of the commission Repealed.
Source: 32 SDR 32, effective August 30, 2005.
General Authority: SDCL 42-7-56(15)(16).
Law Implemented: SDCL 42-7-56(15)(16), 42-7-58.1, 42-7-102.
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20:04:33:25. Application for multi-jurisdictional totalizator hub license. The application for
a "multi-jurisdictional totalizator hub license" must be submitted on a form provided by the
commission, and in addition. The application must have the following information included in
attachments attached:
(1) If the applicant is a corporation, the names, addresses, and dates of birth of its
shareholders, directors, and officers, and if a shareholder is a corporation, the date of
incorporation, the place of incorporation, and the names, addresses, and dates of birth of
its shareholders, directors, and officers must be provided;
(2) If the applicant is a partnership, the names, addresses, and dates of birth of the partners,
and if a partner is a corporation, the date of incorporation, the place of incorporation and
the names, addresses, and dates of birth of its shareholders must be provided;
(3) If the applicant is a corporation ultimately owned by a not-for-profit entity without any
shareholders, or is a publicly traded corporation, the information required in subdivisions
(2) and (3) of this section shall be is required from the directors of the membership
organization, or the directors and officers of the publicly traded corporation, in lieu of the
shareholders;
(4) The names of the racetracks the applicant, or its agent, has contracts with that allow the
applicant to provide the simulcast signals and pari-mutuel wagering on the product;
(5) A statement of the beginning and ending dates of the applicant’s applicant's business
year;
(6) A detailed budget showing anticipated revenue, expenditures, and cash flows by month,
from the hub's operation during the license period;
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(7) The number of days that the applicant is planning to operate the hub during the year in
which the applicant is seeking to be licensed;
(8) Financial information from the applicant that demonstrates the applicant has the financial
resources to install and operate a hub; and
(9) A detailed operating plan; and
(10) A description of internal controls containing the following:
(a) Automated and manual risk management procedures;
(b) Employee management, including user access controls for all online wagering
personnel and segregation of duties;
(c) The means for identifying and reporting fraud and suspicious conduct, including
identifying unusual wagering activity and reporting the activity to an independent
integrity monitoring provider;
(d) The methods for ensuring regulatory compliance;
(e) Anti-money laundering compliance standards;
(f) The means of accepting wagers and issuing payouts, and any additional controls
for issuing payouts in excess of ten thousand dollars;
(g) The means of accepting multiple wagers from one patron in a twenty-four-hour
cycle, including a process to identify patron structuring of wagers to circumvent
recording and reporting requirements;
(h) All software applications that comprise the online wagering system;
(i) The manner of submitting and receiving approval of all types of wagers available
to be offered by the system;
(j) Accounting for all integrated third-party systems;
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(k) Issuance and acceptance of promotional funds and free bets for pari-mutuel
wagering;
(l) The means of identifying and preventing wagering by prohibited persons;
(m) The method of preventing past-post wagers from being placed;
(n) The manner of paying winning wagers, in the event of a failure of the online
wagering system’s ability to pay winning wagers;
(o) The requirement to file an incident report with the commission for each online
waging system failure, documenting the date, time, and reason for the failure
along with the date and time the system is restored; and
(p) Any other information which may be required by the commission.
Source: 32 SDR 32, effective August 30, 2005.
General Authority: SDCL 42-7-56(15)(16).
Law Implemented: SDCL 42-7-56(15)(16), 42-7-58.1, 42-7-58.7, 42-7-107.
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20:04:33:81. Patron protection information. A hub licensee shall provide the following patron
protection information to individuals and patrons on demand:
(1) Information about potential risks associated with excessive wagering, and contract
information for an organization based in this state or the United States, approved by the
commission, dedicated to helping people with potential gambling problems;
(2) Notification that underage gambling is a criminal offense and that anyone who facilitates
an individual under the age of eighteen to place a pari-mutuel wager has committed a
criminal offense and is prohibited from pari-mutuel wagering;
(3) A list of the available patron protection measures that can be invoked by the patron, such
as self-exclusion and information on how to invoke those measures;
(4) For wagering accounts, mechanisms for patrons to detect unauthorized use;
(5) Information on how disputes can be filed with the licensee, hub, or online wagering
platform; and
(6) The method for filing with the commission an unresolved dispute after all reasonable
means to resolve the dispute with the licensee, hub, or online waging platform.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-58.1, 42-7-107.
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20:04:33:82. Internal controls -- Third party involvement. To the extent a third party is
involved in, or provides, any of the internal controls required in this chapter, the hub licensee
controls shall document the roles and responsibilities of the third party and shall include
procedures to evaluate the adequacy of, and monitor compliance with, the third party's internal
control procedures.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-58.1, 42-7-107.
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20:04:33:83. Wagering rules. A hub licensee shall adopt comprehensive wagering rules. The
rules, and any amendments to the rules, must be approved by the commission to be effective.
The wagering rules, together with any other information the commission considers
appropriate, must be conspicuously displayed on the hub licensee's digital platform or mobile
application and included in the terms and conditions of wagering accounts, and copies must be
made readily available to individuals and patrons.
The wagering rules must provide the following regarding pari-mutuel bets:
(1) Types of bets accepted;
(2) Minimum and maximum bets;
(3) The process for handling incorrectly posted events, odds, pari-mutuel bets, or results;
(4) Method for calculation and payment of winning pari-mutuel bets;
(5) Effect of schedule changes;
(6) Method of notifying patrons of odds or proposition changes;
(7) Acceptance of pari-mutuel bets at other-than-posted terms;
(8) Procedures related to pending, winning pari-mutuel bets;
(9) Method of contacting the licensee for questions and disputes;
(11) Methods of funding a bet;
(12) A policy that the hub licensee can cancel pari-mutuel bets for obvious errors pursuant to
the hub licensee's internal controls, which must include a definition and procedures for
obvious errors;
(13) Rules and procedures for communicating with patrons;
(14) What is to occur when a race or any component of a race on which pari-mutuel bets are
accepted is canceled; and
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(15) Any other wagering rule-related information the commission determines necessary.
Failure by a licensee to act in accordance with the wagering rules may result in
disciplinary action as described in § 20:04:33:09.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-58.1, 42-7-107.
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20:04:33:84. Display of available wagers. Available wagers must be displayed to the patrons.
The display must include the odds and a brief description of the event and wagering proposition.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-58.1, 42-7-107.
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20:04:33:85. Allowable bets. Pari-mutuel bets may only be made using the following:
(1) Cash or vouchers;
(2) Cash equivalent;
(3) Bonus or promotional credit;
(4) Winning tickets or credit from prior races;
(5) Funds within a wagering account; and
(6) Any other means approved by the commission.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-58.1, 42-7-107.
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20:04:33:86. Refusing bets. A hub licensee may refuse any pari-mutuel bet at any time for what
the licensee considers good and sufficient reason. A refusal must be logged and made available
to the commission upon request.
A hub licensee may not accept a pari-mutuel bet on a race not displayed pursuant to §
20:04:33:84.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-58.1, 42-7-107.
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20:04:33:87. Prohibited persons. A hub licensee shall make reasonable efforts to prevent a
prohibited person from placing a pari-mutuel bet. If a hub licensee detects, or is notified of, a
person suspected of being a prohibited person who had engaged or is engaging in prohibited
wagering, the hub licensee must use reasonable measures to verify whether the person is
prohibited or not. If the hub licensee cannot establish by reasonable measures that the person is
prohibited, the person is presumed to not be a prohibited person for the purposes of this section.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-58.1, 42-7-107.
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20:04:33:88. Bonus or promotional wagering. A hub licensee may conduct pari-mutuel
wagering, bonus, or promotional offers subject to the following:
(1) A hub licensee shall maintain a record of the following information for all bonus or
promotional offers related to pari-mutuel wagering:
(a) The unique ID for each offer;
(b) The date and time the offer was or is scheduled to be available;
(c) The terms of the offer; and
(d) The date and time the offer was or is scheduled to be decommissioned;
(2) All bonus or promotional offers must be stated in clear and unambiguous terms and must
be accessible by the patron after the offer is accepted and before completion. Offer terms
and the record of all offers must include all of the following:
(a) The date and time presented;
(b) The date and time the offer is active and expires;
(c) Patron eligibility, including any limitations on participation;
(d) Any restriction on withdrawals of funds;
(e) Wagering requirements and limitations on events or wager types;
(f) How the patron is notified when they have received an award;
(g) The order in which funds are used for wagers;
(h) Eligible events or wager types; and
(i) Rules regarding cancellation;
(3) A hub licensee or online pari-mutuel wagering services provider shall provide a clear and
conspicuous method for a patron to cancel the patron's participation in a bonus or
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promotional offer that utilizes restricted wagering credits that cannot be cashed out until a
wagering requirement or other restrictions associated with the credits is met;
(4) Upon request for cancellation, the hub licensee or online pari-mutuel wagering services
provider shall inform the patron of the amount of unrestricted funds that will be returned
upon cancellation and the value of restricted wagering credits that will be removed from
the wagering account;
(5) If a patron elects to proceed with cancellation, unrestricted funds remaining in a patron's
wagering account must be returned according to the terms of the bonus or promotional
offer; and
(6) Once a patron has met the terms of a bonus or promotional offer, a licensee may not limit
winnings earned by the patron while participating in the offer.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-58.1, 42-7-107.
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20:04:33:89. Taxation requirements. Each hub licensee shall, at all times, comply with
Internal Revenue Service (IRS) requirements for reporting and withholding proceeds from pari-
mutuel bets by patrons. The hub licensee shall send to patrons subject to IRS reporting or
withholding a Form W2-G summarizing the information for tax purposes following a winning
wager being paid out to the patron. Upon receiving a written request from a patron, the hub
licensee shall provide the patron with summarized tax information on pari-mutuel wagering
activities by the patron.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-58.1, 42-7-107.
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20:04:33:90. Bank secrecy act compliance. A hub licensee shall comply with all applicable
provisions of the Bank Secrecy Act of 1970, 31 U.S.C. §§ 5311 to 5332 (January 1, 2021).
A hub licensee must, with regard to its online wagering operation, maintain records
related to its compliance with 31 U.S.C. §§ 5311 to 5332 (January 1, 2021), including all
currency transaction reports, suspicious activity reports, and any supporting documentation, for a
minimum of five years. The hub licensee shall provide the records to the commission and any
appropriate law enforcement agencies on request, consistent with the authorization prescribed in
31 U.S.C §§ 5311 to 5332 (January 1, 2021).
A hub licensee shall provide a written notice to the commission as soon as the hub
licensee becomes aware of a compliance review that is conducted by the Internal Revenue
Service under 31 U.S.C §§ 5311 to 5332 (January 1, 2021) and involves or impacts the hub
licensee. The hub licensee shall provide a copy of the compliance review report or the equivalent
to the commission within ten days after the hub licensee receives the report.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-58.1, 42-7-107.
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20:04:33:91. Commission access to information. A hub licensee shall detail the controls that
are in place to ensure that all information the commission requires to be maintained under this
chapter is appropriately segregated and controlled to prevent unauthorized access. Hub licensees
shall provide the commission with access to all required information, and the equipment and
facilities on which or within which the information is maintained, in a manner approved by the
commission, pursuant to internal controls. All information necessary for the commission to
conduct any investigation must be provided to the commission immediately upon request.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-58.1, 42-7-107.
31
20:04:33:92. Anti-money laundering monitoring. The hub licensee shall develop and
implement anti-money-laundering procedures and policies that adequately address the risks
posed by online wagering for the potential of money laundering and terrorist financing.
Additional requirements for anti-money-laundering procedures and policies may be specified by
the commission through internal controls.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-58.1, 42-7-107.
32
20:04:33:93. Reports of online pari-mutuel wagering operations. The hub licensee shall
prepare reports supporting wagering revenue, wagering liability, winnings, and any other reports
required by the commission through internal controls. Additional reporting requirements may be
specified by the commission through internal controls. Information provided under this section is
confidential and proprietary and is exempt from disclosure.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-58.1, 42-7-107.
33
20:04:33:94. Retention of records. Except as otherwise provided, all records required by this
chapter must be maintained for three years.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-58.1, 42-7-107.
34
20:04:33:95. Internal control procedures audit. A hub licensee's internal controls must be
independently audited at least every two years, with the results documented in a written report
that must be maintained and available to the commission. The requirements of this section
include internal controls conducted by a third-party online pari-mutuel wagering services
provider on behalf of the licensee. The following apply to independent audits:
(1) Independent audits may be conducted by the commission, or a commission-approved
third-party auditor;
(2) The commission or third-party auditor is responsible for auditing the licensee's
compliance with this chapter, including the provisions adopted in appendix A of GLI-33,
the internal control system, and any other applicable rules and regulations;
(3) Documentation, including checklist, programs, reports, corrective actions, and other
items, must be prepared to evidence all independent audit work performed as it relates to
the requirements of this section, including all instances of noncompliance;
(4) Independent audit reports must include objectives, procedures and scope, findings and
conclusions, and recommendations;
(5) Independent audit findings must be reported to management. Management shall respond
to the independent audit findings and shall state the corrective measures to be taken to
avoid recurrence of the audit exception. The management responses must be included in
the final independent audit report;
(6) Follow-up observation and examinations must verify that corrective action has been
taken regarding all instances of noncompliance cited by the independent audits, or by the
commission. The verification must be performed within six months following the date of
notification; and
35
(7) Where approved by the commission, a licensee may leverage the results of prior audits
conducted within the two-year period by the same third-party auditor in another online
pari-mutuel wagering jurisdiction. The leveraging must be noted in the audit report. This
leveraging does not include any internal controls unique to the state, which require new
audits.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL, 42-7-58.1, 42-7-107.
Reference: GLI-33 Standards for Event Wagering Systems, v1.1, May 14, 2019,
Gaming Laboratories International, LLC. Copies may be obtained without charge from
Gaming Laboratories International, LLC, at 600 Airport Road, Lakewood, New Jersey,
08701 (732) 942-3999 and online at Gaminglabs.com/gli-standards.
36
20:04:33:96. Annual financial audit. A financial audit of the wagering operations of the hub
licensee must be conducted by a duly licensed certified public accountant and provided to the
commission each year within one hundred twenty days of the licensee's fiscal year and must
meet the following requirements:
(1) Inclusion of an audited balance sheet and audited profits-and-losses statement and
breakdown of expenditures and subsidiaries of advance deposit pari-mutuel wagering
activities;
(2) Inclusion of a supplement schedule indicating financial activities on a calendar-year basis
if the licensee’s fiscal year does not correspond to the calendar year;
(3) Report of any material errors, and irregularities that may be discovered during the audit,
or notice of any audit adjustments;
(4) Availability, upon request, of an engagement letter for the audit between the licensee and
the auditing firm; and
(5) Inclusion of a supplemental schedule for this state operations and a breakdown of online
pari-mutuel wagering activities by each South Dakota licensee.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
37
20:04:33:97. Self-exclusion plan. A hub licensee conducting wagering on pari-mutuel 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-exclusion or voluntary
exclusion program from participating in wagering. The plan must be submitted to the executive
secretary for review and approval. The plan must include monthly reporting of voluntarily
excluded persons.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
38
20:04:33:98. Online wagering system. A hub licensee shall use an online pari-mutuel wagering
system to offer, conduct, or operate pari-mutuel wagering in accordance with applicable laws
and this chapter.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
39
20:04:33:99. Licensee's duty to report criminal or disciplinary proceeding -- Commission
may share information. A hub licensee shall promptly report to the commission any criminal or
disciplinary proceeding commenced against the hub licensee or any of its employees, where
applicable, relating to online pari-mutuel wagering.
The commission may report any information received pursuant to this section to a
governing body if sharing the information does not interfere with an ongoing criminal
investigation.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
40
20:04:33:100. Certain persons prohibited from betting. A hub licensee may not knowingly
accept a bet on an event taking place from any of the following persons:
(1) A person who is participating in the pari-mutuel event or who is a member of any group
participating in or overseeing the pari-mutuel event on which the bet is placed;
(2) A person who holds a position of authority or influence sufficient to exert influence over
the outcome of the pari-mutuel race or event on which the bet is placed, including a
manager, trainer, jockey, steward, or any event official;
(3) An owner, officer, director, or employee of a hub licensee;
(4) An agent or proxy for any person for the purposes of placing or redeeming the bet; or
(5) A person who uses false identification when placing or redeeming a bet.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
41
20:04:33:101. Location detection requirements. All wagers placed through an advance
deposit online wagering account may only be initiated and received or otherwise made by an
account holder located in the permitted boundaries pursuant to SDCL 42-7B-79.
A hub licensee using an online pari-mutuel wagering system shall use location detection
procedures to reasonably detect and dynamically monitor the location of an account holder
attempting to place an advance deposit wager and to monitor and block unauthorized attempts to
place a wager. An account holder outside the permitted boundary must be rejected, and the
account holder must be notified. The commission shall approve technical specifications and
requirements related to location detection.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
42
20:04:33:102. Location of wager. Each wager made through a hub licensee pursuant to this
chapter and SDCL chapter 42-7 by an account holder physically present in this state is deemed to
be made within this state.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
43
20:04:33:103. System errors. The hub licensee's key employee or manager shall determine the
cause of an error in the totalizator operation or the independent monitoring system and make the
necessary repairs or adjustments. Notification of any error identified pursuant to this section must
be made to the executive secretary no later than twenty-four hours after each error occurrence.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
44
20:04:33:104. Bond. At the time of final approval of the applicant's system and multi-
jurisdictional totalizator hub license, the applicant shall give to the commission a bond in an
amount and form set by the commission, which guarantees all payments to the commission,
payments for winning tickets, and the payment of account balances of account holders who are
residents of this state not to exceed ten thousand dollars per account. The bond must be made
payable to the commission.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
45
20:04:33:105. Confidentiality. The following information is confidential and is not subject to
public disclosure except pursuant to a court order or as provided in § 20:04:33:106:
(1) Tax statements and information received by the commission during the licensing process
or otherwise received at the request of the commission or executive secretary;
(2) The account information of individual account holders;
(3) Account holder information or information submitted in the operating plan required by
§ 20:04:33:26 the disclosure of which may be harmful to the competitive position of the
hub operation; and
(4) Communications between the commission and the executive secretary relating to licensing,
disciplining of licensees, or violations by licensees which are privileged, if made lawfully
and in the course of and in furtherance of the business of the commission. The executive
secretary, the commission, or any member of the commission may claim this privilege.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
46
20:04:33:106. Confidentiality -- Exceptions. The confidentiality provisions in §
20:04:33:105 do not apply to information or records described in that section when requested by
the Governor; attorney general; the state's attorney of the county in which the hub is located;
officers, employees, or legal representatives of the Department of Revenue for the purpose of and
only to the extent necessary in the investigation and audit procedures authorized by SDCL title 10;
law enforcement officers of any other municipality, county, or state or federal agency or
department for a law enforcement activity if the head of that agency or department requesting the
information makes a written request to the executive secretary specifying the particular
information requested and specifying the law enforcement activity for which the information is
sought. The confidentiality provisions do not apply to the use of such information or records by
the executive secretary or commission for official purposes.
The provisions of § 20:04:33:105 do not make confidential the aggregate tax collections
during any reporting period, the names and business of any licensee, figures showing the aggregate
amount of money wagered during any reporting period, or requests by host tracks for information
that the hub licensee is required by contract to provide to the host tracks.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
47
20:04:33:107. Manner of wagers approved by commission. Account wagers may only be
accepted during times when the wagering pools of the host track are open for account wagers.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
48
CHAPTER 20:04:34
INTEGRITY AND PENETRATION TESTING
Section
20:04:34:01 Integrity monitoring -- Suspicious behavior.
20:04:34:02 Integrity monitoring -- Suspension of wagering.
20:04:34:03 Integrity monitoring -- Evaluation.
20:04:34:04 Integrity monitoring -- Maintaining records.
20:04:34:05 Integrity monitoring -- Sharing of information.
20:04:34:06 Integrity monitoring -- Registration of independent integrity provider.
20:04:34:07 Integrity monitoring -- Personnel and notification.
20:04:34:08 Technical standards.
20:04:34:09 Integrity and security assessment.
20:04:34:10 Certification testing.
20:04:34:11 Integrity and security assessment -- Scope.
20:04:34:12 Integrity and security assessment -- Report.
20:04:34:13 Information security management system.
49
20:04:34:01. Integrity monitoring -- Suspicious behavior. A hub licensee shall have internal
controls in place to identify unusual wagering activity, and shall report the activity to the
commission.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
50
20:04:34:02. Integrity monitoring -- Suspension of wagering. A hub licensee receiving a
report of suspicious wagering activity may suspend wagering on events or wager types related to
the report but may cancel bets related to the report only after receiving approval from the
commission.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
51
20:04:34:03. Integrity monitoring -- Evaluation. The commission may require a hub licensee
to provide any hardware or software necessary to the commission or to an independent gaming
laboratory approved by the commission for evaluation of its online wagering offering or to
conduct further monitoring of data provided by its online wagering system.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
52
20:04:34:04. Integrity monitoring -- Maintaining records. A hub licensee shall maintain
records of all event integrity monitoring services and activities for a minimum of three years and
shall provide the records to the commission on request.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
53
20:04:34:05. Integrity monitoring -- Sharing of information. If the commission receives
information regarding the integrity of a race on which bets are made, the commission may, to the
extent allowed in SDCL chapter 42-7 and this chapter, share the information with a hub licensee,
independent integrity monitoring provider, governing body, law enforcement entity, regulatory
agency, or other person the commission considers appropriate.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
54
20:04:34:06. Integrity monitoring -- Registration of independent integrity provider. A hub
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 with the commission before providing event integrity monitoring services to a hub
licensee or online pari-mutuel wagering services provider under SDCL chapter 42-7 and this
chapter.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
55
20:04:34:07. Integrity monitoring -- Personnel and notification. A hub licensee shall employ
or retain a person responsible for ensuring the operation and integrity of online wagering and
reviewing all reports of suspicious behavior. Unless otherwise directed by the commission, a hub
licensee shall promptly notify the commission upon detecting or becoming aware of any of the
following:
(1) A person participating in wagering who is engaging in or attempting to engage in, or who
is reasonably suspected of, cheating, theft, embezzlement, collusion, use of funds derived
from illegal activity, money laundering, or any other illegal activities;
(2) A person who is reasonably suspected of misrepresenting the person's identity or using
false identification to establish or attempt to establish a wagering account;
(3) Suspected criminal activity related to any aspect of pari-mutuel wagering;
(4) Any criminal or disciplinary proceedings commenced against the hub licensee or online
wagering services provider in connection with its online wagering operations; or
(5) Any pari-mutuel bets that violate any applicable state or federal law.
An online wagering services provider shall promptly notify any affected hub licensees of
any issues impacting the integrity of online wagering.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
56
20:04:34:08. Technical standards. All equipment and systems integral to the conduct of
advance deposit pari-mutuel wagering must meet the specifications set forth in this chapter and
other technical specifications as prescribed by the commission through internal controls. Failure
to comply with the approved specifications, internal controls, or technical specifications may
result in disciplinary action by the commission.
Hub licensees and online pari-mutuel wagering systems shall comply with the following
Gaming Laboratories International, LLC (GLI) standards:
(1) GLI-33: Standards for Event Wagering Systems, v1.1, and its Appendices. The GLI-33
standards are intended to supplement rather than supplant other technical standards and
requirements under these rules;
(2) GLI Gaming Security Framework (GLI-GSF-1);
(3) GLI Gaming Information Security (GIS) Controls Audit v1.1;
(4) GLI Gaming Technical Security (GTS) Assessment v1.0; and
(5) Gaming Information Security (GIS) Landbased Audit v1.0.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
Reference: GLI-33 Standards for Event Wagering Systems, v1.1, May 14, 2019,
Gaming Laboratories International, LLC. Copies may be obtained without charge from Gaming
Laboratories International, LLC, at 600 Airport Road, Lakewood, New Jersey, 08701. (732) 942-
3999, and online at Gaminglabs.com/gli-standards.
57
GLI Gaming Security Framework Module 1 (GLI-GSF-1) v1.1: Gaming Information
Security (GIS) Controls Audit – Common Controls Core Security Framework, July 25, 2025,
Gaming Laboratories International, LLC. Copies may be obtained without charge from Gaming
Laboratories International, LLC, at 600 Airport Road, Lakewood, New Jersey, 08701. (732) 942-
3999, and online at Gaminglabs.com/gli-standards.
GLI-GSF-2 (GLI-GSF-2) v1.1: Gaming Technical Security (GTS) Assessment
Benchmark for Conducting a Gaming Enterprise’s GPE, February 7, 2025, Gaming
Laboratories International, LLC. Copies may be obtained without charge from Gaming
Laboratories International, LLC, at 600 Airport Road, Lakewood, New Jersey, 08701. (732) 942-
3999, and online at Gaminglabs.com/gli-standards.
GLI Gaming Security Framework Module 3 (GLI-GSF-3) v1.0: Gaming Information
Security (GIS) Controls Audit – Vendor Controls Non-Gaming Vendor Integration,
September 30, 2025, Gaming Laboratories International, LLC. Copies may be obtained without
charge from Gaming Laboratories International, LLC, at 600 Airport Road, Lakewood, New
Jersey, 08701. (732) 942-3999, and online at Gaminglabs.com/gli-standards.
GLI Gaming Security Framework Module 4 (GLI-GSF-4) v1.0: Gaming Information
Security (GIS) Controls Audit – Land-based Gaming Controls Land-Based Gaming
Operations, September 30, 2025, Gaming Laboratories International, LLC. Copies may be
obtained without charge from Gaming Laboratories International, LLC, at 600 Airport Road,
Lakewood, New Jersey, 08701. (732) 942-3999, and online at Gaminglabs.com/gli-standards.
58
GLI Gaming Security Framework Module 5 (GLI-GSF-5) v1.0: Gaming Information
Security (GIS) Controls Audit – Online Gaming Controls Online Gaming Operations, August
22, 2025, Gaming Laboratories International, LLC. Copies may be obtained without charge from
Gaming Laboratories International, LLC, at 600 Airport Road, Lakewood, New Jersey, 08701.
(732) 942-3999, and online at Gaminglabs.com/gli-standards.
59
20:04:34:09. Certification testing. Prior to conducting online wagering, and annually
thereafter, all equipment and systems integral to the conduct of online pari-mutuel wagering and
advance deposit wagering must be submitted to a commission-designated, independent testing
laboratory for evaluation. Certification and executive secretary approval must be received prior
to the use of any equipment or system to conduct online wagering. The submission for evaluation
must include the following:
(1) The hub licensee shall provide internal controls that protect the integrity of all hardware,
networks, applications, databases, and data of the system to the executive secretary for
approval prior to completion of the system testing period and final approval of the
system; and
(2) The hub licensee and online pari-mutuel wagering services provider shall submit change
control processes to the executive secretary for approval. These processes must be:
(a) Developed in accordance with the Gaming Laboratories International, LLC Guide
GLI-CMP Change Management Program Guide, v1.0; and
(b) Certified prior to the equipment or system deployment and audited at an annual
interval by the independent gaming laboratory.
At least annually, each product operating under the certified change control processes
must be fully certified to the specifications set forth in this chapter or other technical
specifications as prescribed by the commission through internal controls and accompanied by
formal certification documentation from the independent gaming laboratory.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
60
Law Implemented: SDCL 42-7-56 42-7-107.
Reference: GLI-CMP Change Management Program Guide, v1.0, May 6, 2020, Gaming
Laboratories International, LLC. Copies may be obtained without charge from Gaming
Laboratories International, LLC, at 600 Airport Road, Lakewood, New Jersey, 08701. (732) 942-
3999, and online at Gaminglabs.com/gli-standards.
61
20:04:34:10. Integrity and security assessment. System integrity and security risk assessment
must be performed annually on all online pari-mutuel wagering systems by an independent
information technology security professional approved by the executive secretary.
An online pari-mutuel wagering system operator shall engage an independent third-party auditor
to conduct an annual audit of their information security and operational controls; and
The third-party auditor must possess at least one of the following credentials:
(1) Certified Information Systems Auditor Certification;
(2) Lead Auditor for ISO; or
(3) Certified Information Security Manager Certification.
The system integrity and security risk assessment must be conducted no later than
ninety days after commencing operations and annually thereafter.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
62
20:04:34:11. Integrity and security assessment -- Scope. The scope of the online pari-mutuel
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, external,
and wireless networks with the intent of identifying vulnerabilities of all devices; the
online pari-mutuel wagering systems; and applications transferring, storing, or processing
personal identifying information or other sensitive information connected to or present on
the networks;
(2) A penetration test of all digital platforms; mobile applications; internal, external, and
wireless networks to confirm devices; the wagering systems; and applications that are
susceptible to compromise;
(3) A review of the firewall rules to verify the operating condition of the firewall and the
effectiveness of the firewall's security configuration and rule sets that must be performed
on all perimeter and internal firewalls;
(4) A technical security control assessment approved by the commission with generally
accepted professional standards;
(5) An evaluation of information security services, cloud services, payment services,
financial institutions, payment processors, location services, and any other services that
may be offered directly by the licensee or involve the use of third parties; and
(6) At the discretion of the executive secretary, any additional assessments or specific testing
criteria that may be required by internal controls.
Source:
63
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
64
20:04:34:12. Integrity and security assessment -- Report. The full independent information
technology security professional's report on the assessment must be submitted to the executive
secretary no later than thirty days after the assessment is conducted and must include:
(1) A scope of review;
(2) The name and company affiliation of the individual or individuals who conducted the
assessment;
(3) The date of assessment;
(4) Findings;
(5) Recommended corrective action, if applicable; and
(6) The hub licensee's or online wagering services provider's response to the findings and
recommended corrective action.
When approved by the executive secretary, the independent information technology
security professional may leverage the results of prior assessments within the past year
conducted by the same professional against standards from the International Organization for
Standardization, the International Electrotechnical Commission, the National Institute of
Standards and Technology, the Payment Card Industry, or equivalent. Any leveraging must be
noted in the professional's report. Components unique to the state must be given fresh
assessments.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
65
20:04:34:13. Information security management system. A hub licensee shall implement,
maintain, regularly review and revise, and comply with, a comprehensive information security
management system that protects the confidentiality, integrity, and availability of personal
identifying information of individuals who place a wager with the licensee. The system must
contain administrative, technical, and physical safeguards appropriate to the size, complexity,
nature, and scope of the operations and the sensitivity of the personal identifying information
owned, licensed, maintained, handled, or otherwise possessed by the hub licensee or online
wagering services provider. Additional specifications may be adopted by the commission
through internal controls.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
66
CHAPTER 20:04:35
ADVANCE DEPOSIT PARI-MUTUEL WAGERING ACCOUNTS
Section
20:04:35:01. Definitions.
20:04:35:02. Authorization to conduct advance deposit wagering.
20:04:35:03. Advance deposit wagering -- Associated agreements.
20:04:35:04. Account requirements.
20:04:35:05. Establishing an account.
20:04:35:06. Account application verification.
20:04:35:07. Account eligibility.
20:04:35:08. Licensee may close or refuse to open accounts.
20:04:35:09. Terms and conditions and privacy policies for accounts.
20:04:35:10. Account information.
20:04:35:11. Authentication credentials.
20:04:35:12. Authentication credentials -- Reset or locked accounts.
20:04:35:13. Account balance.
20:04:35:14. Accounts nontransferable.
20:04:35:15. Financial transactions.
20:04:35:16. Licensee may refuse financial transactions.
20:04:35:17. Account credits and deposits.
20:04:35:18. Failed electronic funds transfer transactions.
20:04:35:19. Withdrawals from an account.
20:04:35:20. Withdrawals from one account -- Overdraws.
67
20:04:35:21. Declining to withdraw from an account.
20:04:35:22. Modification of account information.
20:04:35:23. Balance adjustments.
20:04:35:24. Responsible gaming limits.
20:04:35:25. A multi-jurisdictional totalizator hub licensee may suspend or close accounts.
20:04:35:26. Suspension and restoration of accounts.
20:04:35:27. Suspension of Account -- Effect.
20:04:35:28. Restoration of accounts.
20:04:35:29. Account closure.
20:04:35:30. Inactive accounts.
20:04:35:31. Deceased account holder.
20:04:35:32. Account security -- Account holder responsibility.
20:04:35:33. Account statements.
20:04:35:34. Account holder's principal residence address.
20:04:35:35. Wager information confidential -- Disciplinary action for violations.
20:04:35:36. Securing payment methods.
20:04:35:37. Advance deposit wagering -- Account requirements.
68
20:04:35:01. Definitions. Terms used in this chapter mean:
(1) “Account,” a ledger for advance deposit wagering with a specific identifiable record of
deposits, wagers, and withdrawals established by an account holder and managed by an
advance deposit pari-mutuel wagering licensee. The term does not include an account
used solely to track promotional points, credits, or similar benefits issued to an individual
that may be redeemed for merchandise or services;
(2) “Account application,” the forms and other required submissions received from an
applicant intending to open an account;
(3) “Account holder,” an individual who successfully completes an application and for whom
an advance deposit wagering licensee has opened an account;
(4) “Advance deposit wagering licensee,” a hub licensee who manages accounts on horse or
greyhound races in which an eligible individual may deposit money into an account and
use the balance to pay for bets as allowed and regulated by the commission;
(5) "Confidential account information," the following information:
(a) The amount of money credited to, debited from, withdrawn from, or present in
any particular account;
(b) The amount wagered by a particular account holder on any event or game or
series of events or games;
(c) The unique account ID or username and authentication credentials of a particular
account holder;
(d) The identities of the particular events or games on which the account holder is
wagering or has wagered; and
69
(e) The name, address, and other information in the possession of an advance deposit
wagering licensee that identifies the account holder to anyone other than a
representative of the commission, unless otherwise authorized by the account
holder;
(6) “Credits,” all positive inflows of money to an account;
(7) “Debits,” all negative outflows of money from an account;
(8) “Deposit,” a payment of money by an account holder to the account holder's account;
(9) “Geolocation process,” a process to detect the location of an account holder when the
account holder is attempting to access the system and place an advance deposit wager;
(10) “Principal residence address,” the place where the individual submitting an application
for an account resides at least fifty percent of the calendar year;
(11) “Proper identification,” a form of identification accepted in the normal course of business
establishing the identity of a person;
(12) “Secure personal identification code,” a security compliant code chosen by an account
holder as a means to verify that a wager or account transaction is authorized by the
account holder;
(13) “Suspended account,” an account that has been temporarily disabled from engaging in
wagering activity; and
(14) “Withdrawal,” a payment of money from an account to the account holder when properly
requested by the account holder.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
70
Law Implemented: SDCL 42-7-107.
71
20:04:35:02. Authorization to conduct advance deposit wagering. A hub licensee shall
receive specific authorization from the commission to conduct advance deposit wagering prior to
conducting wagering. Any entity authorized to conduct wagering under SDCL chapter 42-7 shall
comply with all applicable federal, state, local, and commission requirements to be eligible for
authorization.
The licensee shall submit internal controls, approved by the executive secretary, that
contain:
(1) Specific procedures and technology partners to fulfill the requirements set forth in this
chapter;
(2) Commercially available and demonstrable standards to confirm that an individual
attempting to create an account is not a prohibited person as described in § 20:04:33:87;
(3) A process to close out inactive accounts;
(4) A method for verifying location detection procedures to establish account holders'
geographic locations;
(5) Detailed procedures for making adjustments to an account;
(6) A method for an account holder to close out an account;
(7) A detailed description of how an account holder is to be refunded after the closure of an
account;
(8) Detailed procedures for maintaining the security of personal identifying information of
account holders;
(9) A method for securely issuing, modifying, and resetting an account holder's
authentication credential;
72
(10) Methods of account holder notification when changes are made to any account used for
financial transactions or to registration information or when financial transactions are
made, unless other notification preferences are established by the account holder;
(11) Methods of account holder notification including any authentication credential
modification via electronic or regular mail, text message, or other manner approved by
the executive secretary. Methods must include:
(a) Proof of identity, if in person;
(b) The correct response to two or more challenge questions;
(c) Strong authentication; or
(d) Multi-factor authentication; and
(12) Processes to ensure funds in a hub licensee's account are held in trust for the player in a
special purpose segregated account, and that make clear the funds do not belong to the
licensee and are not available to creditors other than the account holder whose funds are
being held.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
73
20:04:35:03. Advance deposit wagering -- Associated agreements. The commission's
approval of any agreements between a hub licensee and its service providers does not constitute
the authorization to conduct advance deposit wagering. If an online pari-mutuel wagering
services provider operating advance deposit pari-mutuel wagering has an agreement with more
than one hub licensee, the provider must submit the agreement with the licensed operator to the
executive secretary that indicates the manner in which accounts, activity, and net receipts are to
be accounted for and maintained separately.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
74
20:04:35:04. Account requirements. A patron must have an established account in order to
place wagers on horse and dog races. An account may only be established through registration
procedures pursuant to these rules. A single account used for online pari-mutuel wagering cannot
be connected or associated with any other wagering. If a patron has multiple accounts, each
account must be identified, recorded, accounted for, and reported separately and distinctly from
pari-mutuel wagering activity.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
75
20:04:35:05. Establishing an account. To establish an account, an application for an account
must be signed by the applicant and the hub licensee shall:
(1) Collect the following applicant personal identifying information:
(a) Full legal name;
(b) Date of birth;
(c) Principal residential address;
(d) Social Security number or the last four digits of the Social Security number, or a
passport or taxpayer identification number for a noncitizen account holder; and
(e) Government-issued identification credential or other information required by the
executive secretary used to verify his or her identity and to prove the account
holder is at least eighteen years of age;
(2) Deny the applicant the ability to register for an account if they submit a birth date that
indicates that they are under the age of eighteen;
(3) Indicate the required information on the account application and the consequences of not
providing the application;
(4) Require the applicant to agree to the hub licensee's terms and conditions and privacy
policies;
(5) Obtain the applicant's acknowledgment that the applicant is prohibited from allowing any
unauthorized person to access their account;
(6) Obtain the applicant's consent to the monitoring and recording of the use of the
applicant's account by the hub licensee and the commission; and
(7) Obtain the applicant's assurance that the information on the application is accurate.
76
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
77
20:04:35:06. Account application verification. Each account application submitted is subject
to electronic verification of the information submitted pursuant to § 20:04:35:05, by either a
national, independent, individual reference service company approved by the commission, or
other technology approved by the commission that meets or exceeds the reliability, security,
accuracy, privacy, and timeliness of the individual reference service companies. If there is a
discrepancy between the application submitted and the information provided by the electronic
verification described above, or if no information on the applicant is available from the
electronic verification, another individual reference service may be accessed or other technology
meeting the requirements described above may be used to verify the information provided. If
these measures prove unsatisfactory, the applicant for an account must be contacted by the
advance deposit pari-mutuel wagering licensee and given instructions on how to resolve the
matter.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
78
20:04:35:07. Account eligibility. Only an individual who is eighteen years of age or older and
not a prohibited person as described in § 20:04:33:87 may create an account, deposit funds, or
participate in advance deposit wagering. The hub licensee shall deny the ability to create an
account, deposit funds, or participate in advance deposit wagering to any individual who is under
eighteen years of age or is a prohibited person.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
79
20:04:35:08. Licensee may close or refuse to open accounts. The hub licensee may close or
refuse to open an account for what the hub licensee considers good and sufficient reason. The
hub licensee shall order an account closed if information used to open the account was false or
misleading, or if the account has been used in violation of the provisions of this chapter or any
state or federal law. The hub licensee shall inform the commission of having refused or closed an
account within seven days of the action.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
80
20:04:35:09. Terms and conditions and privacy policies for accounts. All terms and
conditions and privacy policies for accounts must be included in the internal controls of the hub
licensee, be readily accessible to the account holder before and after registration, and be noticed
when materially updated.
Terms and conditions and privacy policies for accounts must contain the following:
(1) That no underage individuals are permitted to participate in wagering;
(2) Specifications advising account holders to keep their authentication credentials secure;
(3) Processes for dealing with lost authentication credentials, forced password changes, and
password strength;
(4) Conditions under which an account is declared inactive and the actions undertaken on the
account once this declaration is made;
(5) Actions that will be taken on the account holder's pending wagers placed prior to any
exclusion or suspension, the return of all wagers, or settling all wagers, as appropriate;
(6) Information about timeframes and limits regarding deposits to or withdrawals from the
account;
(7) That the advance deposit wagering licensee has the right to:
(a) Refuse to establish an account for what it deems good and sufficient reason;
(b) Refuse deposits to or withdrawals from accounts for what it deems good and
sufficient reason; and
(c) Unless there is a pending investigation or account holder dispute, suspend or close
any account at any time pursuant to the terms and conditions between the licensee
and the account holder;
81
(8) The licensee's personal identifying information protection policy with the following
terms:
(a) The information required to be collected;
(b) The purpose and legal basis for collection;(c) The period in which the
information is stored, or, if no period can be possibly set, the criteria used to set
this;
(d) The conditions allowing disclosure;
(e) That measures are in place to prevent unauthorized or unnecessary disclosure; and
(f) Any other privacy requirements specified by the commission through internal
controls.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
82
20:04:35:10. Account information. A hub licensee shall maintain an electronic account holder
file that contains the following for each account:
(1) Unique account ID or username;
(2) The information in § 20:04:35:05 to register an account holder and create the account;
(3) Encrypted government-issued identification number, authentication credential, and
personal financial information;
(4) The date and method of identity verification, including, as applicable, the document
number of the government issued identification credential examined and its date of
expiration. If a government-issued identification credential is not required for
registration, the electronic record that details the process used to confirm the account
holder's identity must be recorded;
(5) The date the account holder agrees to the terms and conditions and privacy policies;
(6) Account details and current balance, including any incentive credits. All restricted
wagering credits and unrestricted funds that have a possible expiration must be
maintained separately;
(7) Previous accounts, if any, and the reason for deactivation;
(8) The date and method the account was registered;
(9) The date and time the account is accessed by any person, including IP address or gaming
establishment location as applicable; and
(10) The current status of the account.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
83
Law Implemented: SDCL 42-7-107.
84
20:04:35:11. Authentication credentials. The applicant for an account shall supply the hub
licensee with an authentication credential to assure that only the account holder has access to the
account. The requirement may not prohibit the option for more than one method of
authentication for an account holder to access the account. An account holder may change this
authentication credential at any time.
If an account holder has forgotten the account holder's authentication credentials, a multi-
factor authentication process must be employed for the retrieval or reset of the forgotten
authentication credentials.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
85
20:04:35:12. Authentication credentials -- Reset or locked accounts. If the online pari-
mutuel wagering system does not recognize the authentication credentials when entered, a
message must be displayed to the account holder that prompts the account holder to try again.
The error message must be the same regardless of which authentication credential is incorrect.
The system must support a mechanism that locks an account in the event that suspicious
activity is detected, such as three consecutive, failed access attempts in a thirty-minute period. A
multi-factor authentication process must be employed for the account to be unlocked.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
86
20:04:35:13. Account balance. Current wagering account balance information, restricted
wagering credits, unrestricted funds, and transaction options must be available on demand after
confirmation of account holder identity. The account balance must be presented in terms of
currency to the account holder. All restricted wagering credits and unrestricted funds that have a
possible expiration must be indicated separately.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
87
20:04:35:14. Accounts nontransferable. No account may be transferred between individuals or
other legal entities.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
88
20:04:35:15. Financial transactions. A hub licensee shall provide a fee-free method for
account holders to deposit or withdraw funds from their accounts. The account holder must be
provided with a confirmation or denial, of every financial transaction initiated, which provides:
(1) Whether the type of transaction is a deposit or withdrawal;
(2) The transaction value; and
(3) For denied transactions, why the transaction did not complete as initiated.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
89
20:04:35:16. Licensee may refuse financial transactions. The hub licensee may refuse
financial transactions on an account for what the licensee considers good and sufficient reasons,
which must be listed in the licensee's internal controls.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
90
20:04:35:17. Account credits and deposits. After establishment, an account may be funded
using approved methods that produce a sufficient audit trail for verification of the source of the
wagers.
The approved methods for funding accounts are:
(1) Cash or voucher deposits;
(2) Check or money order;
(3) Charges made to an account holder's or debit card;
(4) Bonus or promotional credit;
(5) Electronic funds transfer from a monetary account controlled by an account holder;
(6) Credit for winnings from wagers placed with funds in the account;
(7) Adjustments made by the hub licensee with documented notification to the account
holder;
(8) Wire transfer; and
(9) Any other means approved by the commission pursuant to internal controls.
For debit cards and electronic fund transfers, the account holder is liable for any charges
imposed by the transmitting or receiving entity, with the charges to be deducted from the
account.
Funds deposited pursuant to this section are available for wagering use in accordance
with the financial institution's policy regarding funds availability.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
91
92
20:04:35:18. Failed electronic funds transfer transactions. If financial transactions are
conducted through electronic funds transfer, the hub licensee must have security measures and
controls to prevent electronic funds transfer fraud. A failed electronic funds transfer attempt is
not considered fraudulent if the account holder has successfully performed a transfer on a
previous occasion with no outstanding chargebacks. Otherwise, the licensee must:
(1) Temporarily block the holder's account for investigation of fraud after five consecutive
failed electronic funds transfer attempts within a ten-minute period. If there is no
evidence of fraud, the block must be vacated; and
(2) Suspend the account holder's account after five additional, consecutive failed transfer
attempts within a ten-minute period.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
93
20:04:35:19. Withdrawals from an account. An account holder may withdraw the funds
maintained in the holder's account, except as otherwise provided in these rules, or any other
applicable state or federal laws. For withdrawals not paid directly to an account holder, payments
from an account must be paid directly to an account with a financial institution in the name of the
account holder, or made payable to the account holder and forwarded to the account holder's
principal address using a secure delivery service or through another method that is not prohibited
by state or federal law. For purposes of this chapter, a request for withdrawal is considered
honored if it is processed by the advance deposit wagering licensee notwithstanding a delay by a
payment processor, credit card issuer, or the custodian of a financial account.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
94
20:04:35:20. Withdrawals from one account -- Overdraws. An online wagering system must
employ a mechanism that can detect and prevent any withdrawal activity initiated by an account
holder that would result in a negative account balance of the account.
A hub licensee may not allow an account to be overdrawn unless caused by payment processing
issues outside the control of the licensee.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
95
20:04:35:21. Declining to withdraw from an account. A hub licensee must honor the account
holder's request to withdraw funds within five business days after the request unless the licensee
believes in good faith that the account holder engaged in fraudulent conduct or other conduct that
would put the licensee in violation of state law or these rules. If the licensee dose not honor the
request, the licensee shall:
(1) Provide notice to the account holder of the nature of the investigation of the account; and
(2) Conduct an investigation in a reasonable and expedient fashion, providing the account
holder written notice of the investigation status every tenth business day from the day the
original notice was provided to the account holder.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
96
20:04:35:22. Modification of account information. A hub licensee shall allow the account
holder to update authentication credentials, registration information, and the account used for
financial transactions. A multi-factor authentication process must be employed for these
purposes.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
97
20:04:35:23. Balance adjustments. A hub licensee must have in place security or authorization
procedures to ensure that only authorized adjustments can be made to wagering accounts. The
licensee shall ensure each adjustment is auditable, indicating who performed the adjustment,
what the adjustment was, when the adjustment occurred, the value before the adjustment, and the
reason for the adjustment. All adjustments to an account balance for amounts of five hundred
dollars or less must be periodically reviewed by supervisory personnel as set forth in the
licensee's internal controls. All other adjustments must have a supervisor's approval before being
entered.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
98
20:04:35:24. Responsible gaming limits. A hub licensee shall allow the account holder to set:
(1) A deposit limit offered on a daily, weekly, or monthly basis specifying the maximum
amount of money an account holder may deposit into the account during a particular
period of time; and
(2) A wager limit offered on a daily, weekly, or monthly basis specifying the maximum
amount of wagering account funds that may be put at risk during a particular period of
time.
A decrease to these limits is effective immediately or at a time clearly indicated to the
player. An increase to these limits is effective only after the previous limit has expired and the
player reaffirms the requested increase.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
99
20:04:35:25. A hub licensee may suspend or close accounts. The licensee may suspend or close
any wagering account at any time if, when an account is closed, the licensee, within five business
days, returns to the account holder all monies then on deposit pursuant to the licensee's internal
controls.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
100
20:04:35:26. Suspension and restoration of accounts. The hub licensee shall employ a
mechanism that places a wagering account in a suspended mode under the following conditions:
(1) When a self-exclusion request is made by the account holder for a specified period not
less than seventy-two hours;
(2) When required by the commission;
(3) Upon a determination that an account holder is a prohibited person as described in §
20:04:33:87; or
(4) When initiated by a hub licensee with evidence that illegal activity, a negative account
balance, or a violation of the terms and conditions has taken place on an account holder's
account.
Each licensee shall, on a monthly basis, provide the commission with a list of suspended
accounts, and the reasons why the account was suspended.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
101
20:04:35:27. Suspension of Account -- Effect. Upon suspension of an account, the hub
licensee shall:
(1) Prevent the account holder from wagering;
(2) Prevent the account holder from depositing funds, unless the account is suspended due to
having a negative account balance, but only to the extent the account balance is brought
back to zero dollars;
(3) Prevent the account holder from withdrawing funds from the holder's account unless the
licensee acknowledges that the funds have cleared and that the reason or reasons for
suspension would not prohibit a withdrawal;
(4) Prevent the account holder from making changes to the account holder's account;
(5) Prevent the removal of the account from the system; and
(6) Prominently display to the account holder that the account is in a suspended mode, the
restrictions placed on the account, and any further course of action needed to remove the
suspended mode.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
102
20:04:35:28. Restoration of accounts. A suspended account may be restored:
(1) Upon expiration of the time period established by the account holder if solely the result
of a self-exclusion request;
(2) If authorized by the commission;
(3) When the account holder is no longer a prohibited person as described in § 20:04:33:87;
or
(4) When the hub licensee has lifted the suspended status.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
103
20:04:35:29. Account closure. An account holder must be provided with a conspicuous and
readily accessible method to close the holder's account through an account management or
similar webpage, or through the customer support team. Any balance remaining in an account
closed by the account holder must be refunded pursuant to the licensee's internal controls.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
104
20:04:35:30. Inactive accounts. A hub licensee may close any account that has no activity for
twenty-four months.
For purposes of this section, "activity" means making a wager, making an account
deposit, or withdrawing funds.
The hub licensee shall:
(1) Allow access to a player's inactive account only after performing additional identity
verifications;
(2) Protect inactive accounts that contain funds from unauthorized access, changes, or
removal; and
(3) Deal with unclaimed funds from inactive accounts, and return any remaining funds to the
player where possible.
An advance deposit wagering licensee may not charge an administration fee or
maintenance fee for any inactive account. The licensee shall treat inactive accounts as unclaimed
property and comply with the provision of SDCL chapter 43-41.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
105
20:04:35:31. Deceased account holder. If an account holder is deceased, funds accrued in the
account must be released to the decedent's legal representative upon receipt of a certified copy of
a valid death certificate, tax releases or waivers, probate court authorizations, or other documents
required by applicable laws.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
106
20:04:35:32. Account security -- Account holder responsibility. An account is for the
personal use of the account holder only. The account holder is responsible for maintaining the
confidentiality of the account holder's authentication credentials. Except where the hub licensee
or its employees or agents act without good faith or fail to exercise ordinary care, the licensee is
not responsible for any loss from an account holder's account arising from the use by any other
person or persons. The account holder shall immediately notify the licensee of a breach of the
account's security.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
107
20:04:35:33. Account statements. Upon the request of an account holder, the hub licensee shall
provide to the account holder a statement of the account activity for the time period requested,
not to exceed one year. Statements provided must include sufficient information to allow an
account holder to reconcile the statement against the account holder's own financial records. The
statement is presumed to be correct unless written notice to the contrary is received by the
licensee within thirty days of the date that any statement is provided to the account holder.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
108
20:04:35:34. Account holder's principal residence address. The principal residence address
provided by the account holder at the time of account application is the proper address for all
mailings to the account holder unless the account holder has provided the hub licensee with a
change of principal residence address. The mailing of checks or other correspondence under this
section is at the sole risk of the account holder.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
109
20:04:35:35. Wager information confidential -- Disciplinary action for violations. Any
information about accounts that is not subject to disclosure pursuant to the privacy policies must
be kept confidential, except if the release of that information is required by law. No employee or
agent of the hub licensee may divulge any confidential information related to the placing of a
wager or any confidential account information related to the operation of the licensee, except as
provided by article 20:04, or pursuant to a court order, state or federal law, or commission order.
A violation of this section is grounds for disciplinary action.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
110
20:04:35:36. Securing payment methods. The hub licensee shall have procedures to ensure all
financial transactions are conducted in accordance with federal regulations and the commission's
rules. To protect payment methods against fraudulent uses, the licensee shall:
(1) Ensure collection of sensitive information directly related to financial transactions must
be limited to the information strictly needed for the transaction;
(2) Take adequate measures to protect any type of payment in the system from a fraudulent
use;
(3) Verify that the payment processors ensure the protection of the account holder's data,
including any sensitive information given by the account holder, or transaction-related
data;
(4) Establish a procedure for assuring a match of ownership between the payment-type
holder and the account holder; and
(5) Generate all transactional records of accounts. The data recorded must allow the licensee
to trace a single financial transaction of an account holder from another transaction.
All financial transactions must be reconciled with financial institutions and payment
processors daily or as otherwise specified by the commission.
Additional requirements for payment processors may be specified by the commission
through internal controls.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: SDCL 42-7-107.
111
20:04:35:37. Advance deposit wagering -- Account requirements.
Each hub licensee that is authorized to conduct advance deposit pari-mutuel wagering shall
maintain an account at a state or federally chartered financial institution to hold patron deposits
and payments made by the operator or route operator to the patrons for winning bets. This
account may not be used by the hub licensee for any other purpose and is not an asset of the
licensee. This account is subject to review and audit by the commission at any time.
Source:
General Authority: SDCL 42-7-56(13)(15)(16).
Law Implemented: 42-7-107.