Free Market

Utah’s Universal Sandbox Is Open for Business


Dear Utah businesses and entrepreneurs, 

Have you heard the good news? Utah’s universal regulatory sandbox is finally open and accepting applications from businesses and entrepreneurs with innovative ideas. 

For all the great ideas out there that could change lives and innovate for tomorrow, there is a greater amount of regulatory code and bureaucratic red tape that keeps ideas from getting off the ground. Utah’s universal regulatory sandbox is a solution for innovative market ideas, intended to cut through the red tape and help lawmakers and regulators plan for the industries of the future.

If you have a great idea, but the burden of regulatory requirements is holding that idea back, this is what you need to know about Utah’s universal regulatory sandbox and how to jump in.

What is a regulatory sandbox?

A regulatory sandbox creates a safe-space for businesses to experiment with new and innovative ideas in the market without the burden of regulatory barriers for one year with a possible one year extension. The sandbox is designed for businesses with innovative products, services, or business models that don’t neatly fit into a single industry or regulatory rule. 

As the sandbox business innovates and tests its idea, data is collected in collaboration with state regulators about how well the business and idea works without burdensome regulations. At the end of the set time period, regulators evaluate the results of the business experiment to determine what, if any, rules should apply moving forward. Once regulators have gathered all the facts, they bring them to the legislature to recommend legislative changes to solve the regulatory issue for good.

This collaborative approach between innovators and regulators is the way forward for innovation in many regulated industries. Moreover, sandboxing is demonstrably more efficient and successful than lobbying governments to change rules, or litigating them in court, just to bring a new idea to market. For that reason, Utah’s general regulatory sandbox is a stepping stone to ensuring entrepreneurial freedom

What is different about Utah’s universal regulatory sandbox?

Most regulatory sandboxes are industry-specific, meaning they offer regulatory relief to businesses that would ordinarily run afoul of the regulatory code for that industry, but are otherwise treated like industry participants. Industry-specific sandboxes have been valuable tools for managing the influx of innovations in the financial technology, insurance, and legal services industries.

After all the success that came from industry-specific sandboxes, Utah’s legislature opened up a universal sandbox for every other industry last year. That means that businesses in the agriculture industry, real estate industry, drone industry, and many more are all eligible to join Utah’s regulatory sandbox and challenge the regulations holding back innovation. 

How do I get into the regulatory sandbox?

The Utah Office of Regulatory Relief oversees Utah’s universal regulatory sandbox, and applications may be submitted through the application portal

Before applying, applicants should find out which regulatory codes apply, or could apply, to their idea or business model. Regardless of the industry, being clear in the application process about how an idea will run afoul of existing law or regulation is a crucial step in establishing need. This includes any applicable licensing, legal prohibitions, or authorization requirements, even those that fall outside of what can be waived for the regulatory sandbox.

Applicants should also lay out a clear business plan that details the need for participating in the regulatory sandbox, the benefits to consumers, how the idea is different from ideas in other states, what risks the idea might pose to consumers in the state, and how the potential risk will be mitigated if the demonstration fails.

If regulations are what’s holding back your great business or product idea, come play in Utah’s universal sandbox.

To learn more about regulatory sandboxes, read our policy brief. Be sure to also explore our dedicated webpage on regulatory sandboxes, which serves as an information center for all of our work on the topic.