The Supporting Affordability and Fairness with Every Bet (SAFE) Act is a proposed federal legislation designed to establish minimum standards for sports betting across the United States. It aims to ensure responsible gambling practices, protect consumers, and uphold the integrity of sports betting nationwide.
This article summarizes key compliance requirements outlined in the SAFE Bet Act and examines how the American Institution of Certified Public Accountants (AICPA) System and Organization Controls (SOC) 1 and SOC 2 standards help operators report internal controls over financial reporting (SOC 1) and security, availability, confidentiality, processing integrity, and privacy (SOC 2).
Key compliance requirements of the SAFE Bet Act
State sports wagering programs: States must implement federally compliant sports wagering programs, including measures to prevent underage gambling, promote responsible gambling, and support problem gamblers.
Artificial intelligence (AI) regulations: The act prohibits AI-driven tracking of gambling behaviors for personalized promotions and the use of AI to develop gambling products such as microbets.
National self-exclusion list: A national self-exclusion list allows individuals to voluntarily exclude themselves from sports betting, providing an essential tool for managing gambling-related risks.
Affordability checks: Bettors must undergo affordability checks to ensure wagers do not exceed 30% of their income, preventing excessive gambling and protecting vulnerable individuals.
Advertising restrictions: Strict regulations limit sports betting advertisements during primetime hours and live sporting events. Additionally, promotional terms like “bonus” and “no-sweat” are restricted to prevent misleading marketing.
Internal control development and reporting for sports wagering operators
Beyond compliance requirements, the SAFE Bet Act mandates that sports wagering operators document and maintain robust internal controls to ensure adherence to all applicable laws, regulations, and policies.
Section 103, paragraph 16, requires operators to submit an annual written system of internal controls to the state and undergo an independent third-party or regulatory audit at least once every three years.
With over 20 years of experience assisting gambling operators with independent third-party attestation reports, we have observed that most states now require annual independent audits. These audits typically assess controls related to financial reporting (SOC 1) and security, availability, confidentiality, processing integrity, and privacy (SOC 2).
SOC audits and SAFE Bet Act compliance
SOC audits reinforce sportsbook operators’ commitment to financial reporting, data security, privacy, and operational integrity, aligning with the SAFE Bet Act in several ways:
Security and privacy: Both SOC audits and the SAFE Bet Act prioritize consumer data protection. SOC 2 audits evaluate security and privacy controls, ensuring responsible data handling. The SAFE Bet Act mandates anonymized reporting and restricts AI-driven tracking, supporting privacy safeguards.
Compliance and transparency: SOC audits offer a structured method to evaluate and report compliance with security standards. Likewise, the SAFE Bet Act requires annual sports wagering reports, fostering transparency and accountability.
Consumer protection: Both frameworks emphasize consumer protection. SOC 2 audits assess controls for safeguarding data, while the SAFE Bet Act introduces affordability checks and advertising restrictions to prevent exploitation and promote responsible gambling.
BerryDunn can help you stay compliant with the SAFE Bet Act
The SAFE Bet Act establishes rigorous compliance standards for United States sports betting, focusing on responsible gambling, consumer protection, and integrity. SOC audits provide sportsbooks with a proactive approach to compliance, trust-building, and enhanced security measures.
BerryDunn has more than 25 years of specialized experience in providing auditing and consulting services to gaming, sportsbooks, and lottery clients. We provide the insight necessary to help you ensure the security and integrity of a successful gambling operation. Our professionals bring over two decades of expertise in assisting gambling clients with audit requirements, including SOC, NIST, PCI, and ISO 270001. Learn more about our team and services.