Section · Administrative Rules of South Dakota · View on sdlegislature.gov ↗
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 (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: 53 SDR 35, effective September 30, 2026.