Current through Register Vol. 54, No. 44, November 2, 2024
(a) At
least 90 days prior to commencing sports wagering under this subpart, a sports
wagering certificate holder or sports wagering operator shall submit to the
Board for approval internal controls for all aspects of sports wagering,
including retail sportsbooks, interactive sportsbook operations through a web
site or mobile application and nonprimary location sportsbook operations, prior
to implementation and any time a change is made thereafter. The internal
controls shall include detailed procedures for system security, operations,
accounting, and other information as required by the Board.
(b) Notwithstanding subsection (a), the
procedures and controls may be implemented by a sports wagering certificate
holder or sports wagering operator upon the filing of the procedures and
controls with the Board and written approval to commence operations by the
Executive Director. Each procedure or control submission shall contain both
narrative and diagrammatic representations of the system to be utilized and
shall include the following:
(1) Provide for
reliable accounting controls, including the standardization of forms and
definition of terms to be utilized in the retail sports wagering and
interactive or mobile sports wagering operations.
(2) Procedures, forms and, where appropriate,
details as to the reconciliation of assets and documents contained in the
retail sports wagering cashier drawers. These procedures shall provide for the
reporting of any overage or shortage.
(3) Job descriptions and the system of
personnel and chain of command, establishing a diversity of responsibility
among employees engaged in sports wagering operations, including employees of a
sports wagering operator and identifying primary and secondary management and
supervisory positions for areas of responsibility.
(4) Procedures for the registration of
players and establishment of sports wagering accounts, including a procedure
for authenticating the age, identity and physical address of an applicant for a
sports wagering account and whether the applicant is a person prohibited from
establishing or maintaining an account under applicable laws or regulations.
(5) Procedures for terminating a
registered player's sports wagering account and the return of any funds
remaining in the sports wagering account to the registered player.
(6) Procedures for suspending or terminating
a dormant sports wagering account and the return of any funds remaining in the
dormant sports wagering account to the registered player.
(7) Procedures for the logging in and
authentication of a registered player to enable the player to commence sports
wagering and the logging off of the registered player when the registered
player has completed play, including a procedure to automatically log a
registered player out of the registered player's sports wagering account after
a specified period of inactivity.
(8) Procedures for the crediting and debiting
of a registered player's sports wagering account.
(9) Procedures for cashing checks, receiving
electronic negotiable instruments and for redeeming cash equivalents.
(10) Procedures for withdrawing funds from a
sports wagering account by the registered player.
(11) Procedures for the protection of a
registered player's funds, including the segregation of a registered player's
funds from operating funds of the sports wagering certificate holder or sports
wagering operator.
(12) Procedures
for recording transactions pertaining to sports wagering.
(13) Procedures for the security and sharing
of personal identifiable information of a registered player, funds in a sports
wagering account and other information as required by the Board. The procedures
shall include the means by which a sports wagering certificate holder or sports
wagering operator will provide notice to a registered player related to the
sharing of personal identifiable information.
(14) Procedures and security for the
calculation and recordation of revenue.
(15) Procedures for the security of the
sports wagering platform, sports wagering interactive system, sports wagering
devices and associated equipment.
(16) Procedures and security standards as to
receipt, handling and storage of sports wagering devices and associated
equipment.
(17) Procedures and
security standards to protect and respond to suspected or actual hacking or
tampering by any person with the sports wagering certificate holder's or sports
wagering operator's interactive sports wagering web site, mobile application
and sports wagering devices and associated equipment.
(18) Procedures to verify each registered
player's physical location each time a registered player logs into his or her
sports wagering account and at appropriate intervals thereafter as determined
by the Board.
(19) Procedures and
appropriate measures implemented to deter, detect and, to the extent possible,
to prevent cheating, including collusion and use of cheating devices, including
the use of software programs that make wagers according to
algorithms.
(20) Procedures to
govern emergencies, including suspected or actual cyber-attacks, hacking or
tampering with the sports wagering certificate holder's or sport wagering
operator's interactive sports wagering platform, interactive sports wagering
web site or mobile application and sports wagering devices and associated
equipment. The procedures shall include the process for the reconciliation or
repayment of a registered player's sports wagering account.
(21) If any athlete or person who holds a
position of authority or influence sufficient to exert influence over the
participants in sporting event, as fully described in §
1401a.7(c)
(relating to prohibited and restricted sports wagering activities) of this
subpart, has less than 10% direct or indirect ownership interest in or control
of a sports wagering certificate holder or a sports wagering operator,
procedures for the following shall be included:
(i) Providing notice to the Board of the
identity of the owner, and if known, the ownership interest in the sports
wagering certificate holder or sports wagering operator.
(ii) Implementing appropriate measures to
prevent an athlete or a person from participating in the management or
operations of sports wagering activities of a sports wagering certificate
holder or a sports wagering operator.
(iii) Obtaining a certification from the
owner acknowledging that the less than 10% direct or indirect owner is not
permitted to be a customer of the sports wagering certificate holder or
operator under §
1401a.7(b)(2),
not permitted participate in the management or operations of the sports
wagering certificate holder or sports wagering operator, and in the instance of
an owner of an athletic team, not permitted to engage in sports wagering
activity on any team in the league as that in which he has an ownership
interest.
(c)
The submission required under subsections (a) and (b) shall include a detailed
description of the sports wagering certificate holder's or sports wagering
operator's administrative and accounting procedures related to sports wagering,
including its written system of internal controls. Each written system of
internal controls shall include:
(1) An
organizational chart depicting appropriate functions and responsibilities of
employees involved in sports wagering.
(2) A description of the duties and
responsibilities of each position shown on the organizational chart.
(3) The record retention policy of the sports
wagering certificate holder or sports wagering operator.
(4) The procedure to be utilized to ensure
that money generated from the conduct of sports wagering is safeguarded and
accounted for.
(5) Procedures to
ensure that recorded accountability for assets is compared with actual assets
at intervals required by the Board and appropriate action is taken with respect
to discrepancies.
(6) Procedures to
be utilized by an employee of a sports wagering certificate holder or sports
wagering operator in the event of a malfunction of a sports wagering
certificate holder's interactive sports wagering platform, interactive sports
wagering web site or mobile application and sports wagering devices and
associated equipment used in the conduct of sports wagering.
(7) Procedures to be utilized by the sports
wagering certificate holder or sports wagering operator to prevent persons
under 21 years of age, self-excluded or involuntary excluded individuals,
individuals who are prohibited from wagering in accordance with §
1401a.8 (relating to persons
prohibited from engaging in sports wagering activities) and players outside
this Commonwealth from engaging in sports wagering.
(8) Other items the Board may request in
writing to be included in the internal controls.
(d) Prior to authorizing a sports wagering
certificate holder or sports wagering operator to commence the conduct of
sports wagering, the Board shall review and approve the system of internal
controls, security protocols and audit protocols submitted under this chapter
to determine whether they conform to the requirements of this chapter and
whether they provide adequate and effective controls for the conduct of sports
wagering.
(e) If a sports wagering
certificate holder or sports wagering operator intends to make a change or
amendment to its system of internal controls, it shall submit the change or
amendment electronically to the Bureau of Gaming Operations, in a manner
prescribed by the Bureau of Gaming Operations. The sports wagering certificate
holder or sports wagering operator may implement the change or amendment on the
30th calendar day following the filing of a complete submission unless the
sports wagering certificate holder or sports wagering operator receives written
notice tolling the change or amendment in accordance with this chapter or
written notice from the Board's Executive Director rejecting the change or
amendment.
(f) If during the 30-day
review period in this chapter, the Bureau of Gaming Operations preliminarily
determines that a procedure in a submission contains an insufficiency likely to
negatively affect the integrity of sports wagering or the control of revenue
generated from sports wagering, the Bureau of Gaming Operations, by written
notice to the sports wagering certificate holder or sports wagering operator,
will:
(1) Specify the nature of the
insufficiency and, when possible, an acceptable alternative
procedure.
(2) Direct that the
30-calendar day review period in this chapter to be tolled and that any
internal controls at issue not be implemented until approved under this
chapter.
(g) Examples of
submissions that may contain an insufficiency likely to negatively affect the
integrity of sports wagering may include any of the following:
(1) Submissions that fail to provide
information sufficient to permit the review of sports wagering activities by
the Board.
(2) Submissions that
fail to provide for the segregation of incompatible functions so that no
employee is in a position to both commit an error or perpetrate a fraud and to
conceal the error or fraud in the normal course of the employee's
duties.
(3) Submissions that do not
include forms or other materials referenced in the submission or required under
the act or this subpart.
(4)
Submissions that would implement operations or accounting procedures not
authorized by the act or this subpart.
(h) Whenever a change or amendment has been
tolled under this chapter, the sports wagering certificate holder or sports
wagering operator may submit a revised change or amendment within 30 days of
receipt of the written notice from the Bureau of Gaming Operations. The sports
wagering certificate holder or sports wagering operator may implement the
revised change or amendment upon receipt of written notice of approval from the
Board's Executive Director or on the 30th calendar day following the filing of
the revision unless the sports wagering certificate holder or sports wagering
operator receives written notice tolling the change or amendment in accordance
with this chapter or written notice from the Board's Executive Director
rejecting the change or amendment.
(i) A sports wagering certificate holder or
sports wagering operator shall submit to the Board for approval a Catalog of
Events and Wagers, which shall include a description of the events and wagers
intended to be offered and shall include the following:
(1) Sport.
(2) Competition or league.
(3) Governing body.
(4) Games or matches.
(5) Description of the type of events that it
intends to accept wagers on as well as the type of wagers it intends to
accept.
(j) A sports
wagering certificate holder or sports wagering operator shall submit for
approval any revision to the Catalog of Events and Wagers at least 72 hours in
advance of implementation of these changes. A sports wagering certificate
holder or sports wagering operator must maintain a catalog of all prior and
current events and the types of wagers it offered on the events.
(k) The Board reserves the right to prohibit
the acceptance of wagers and may order the cancellation or discontinuation of
wagering, and require refunds on any event which may have an impact on the
public or the integrity of sports wagering operations.
(l) A sports wagering certificate holder or
sports wagering operator shall only accept wagers on sporting events for which:
(1) The outcome can be verified.
(2) The outcome can be generated by a
reliable and independent process.
(3) The outcome is not affected by any wagers
placed.
(4) The event is conducted
in conformity with all applicable laws or regulations.
(m) A sports wagering certificate holder or
sports wagering operator shall not unilaterally rescind or cancel any wager
made under this chapter without prior approval of the Board.
(n) The available wagers, including the event
number, odds and a brief description of the event, shall be displayed to the
public, the sports wagering certificate holder or sports wagering operator's
closed circuit television system, interactive sports wagering web site and
mobile application.
(o) Winning
sports wagering tickets shall be redeemed through the sports wagering system,
and a ticket writer or self-service kiosk shall cause the winning ticket to be
reflected as claimed or redeemed in the sports wagering system upon
redemption.
This section cited in 58 Pa. Code §1407.5 (relating
to self-service kiosks and point of sale system requirements); 58 Pa. Code
§
1407a.6 (relating to
ticket/voucher requirements); 58 Pa. Code §
1407a.9 (relating to sports
wagering system general requirements); 58 Pa. Code §
1408a.5 (relating to information
to be displayed/provided); and 58 Pa. Code §
1409a.2 (relating to sports
wagering contests, tournaments, pools or other organized
events).
