A Colorado lottery bond protects the Colorado Lottery (the “obligee” requiring the bond) and the public against financial harm resulting from the unlawful or unethical conduct of a licensed Colorado lottery retailer (the “principal” required to furnish the bond). In the event of such a loss, the injured party can seek compensation by filing a claim for damages against the bond.
How to Get a Lottery Retailer License in Colorado
At Surety Bonds Agent, we offer a full range of surety bonds nationwide through an extended carrier network. Continue below to learn more about lottery retailer licensing in Colorado. If you have additional questions or want to explore bonding solutions for your business, speak with one of our knowledgeable surety bond experts.
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Who Licenses Lottery Retailers?
To get started on the path to licensure as a Colorado lottery retailer, fill out the contact form contact form on the Colorado lottery website. Shortly after submitting it, you’ll be contacted by a Colorado Lottery Licensing Specialist to get the process started. Or, you can download the application packet and instructions, complete it, and return it by mail to the address printed on the form.
Why Is a Surety Bond Required?
How Do They Work?
In addition to the obligee and the principal, there is a third party to the legally binding surety bond agreement—the party guaranteeing the payment of claims by the principal (known as the “surety”). Although the terms of the surety bond legally obligate the principal to pay all claims the surety finds to be valid, the surety has agreed to extend credit to the principal to provide the necessary funds. In fact, the surety typically pays a valid claim initially, on the principal’s behalf, to be repaid at a later date.
Failing to repay the surety can result in the surety suing the principal to recover the amount of the claim.
What Are the Steps in the Licensing Process?
The licensing process to become a Colorado lottery retailer is fairly straightforward. Your signature authorizes certain background checks that will help the Colorado Lottery determine whether you have the requisite commitment to conducting lottery business ethically.
All licensees are required to be bonded, either by participating in the state’s self-bonding program (which costs $40 per year) or purchasing a $2,000 Colorado lottery bond on their own. The choice of bonding method is entirely up to the applicant.
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What Do They Cost?
The annual premium for a Colorado lottery bond is calculated by multiplying the $2,000 bond amount by the premium rate set by the surety for the principal through an underwriting assessment of the risk to the surety. The primary concern is the risk of the surety not being repaid for claims paid on the principal’s behalf. That risk is measured largely on the basis of the principal’s personal credit score. The higher the credit score, the lower the risk and the lower the premium rate, perhaps as low as 1%, and vice versa.
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How Do Colorado Lottery Bonds Work?
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Choose Your Bond Type
Select the bond you need — commercial, contract, or any specialized bond. We help you find exactly what is required in your state.
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Submit a Quick Application
Complete a short online form. It only takes a few minutes, with no extra paperwork or long verification steps.
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Get Approved & Receive Your Bond
Get fast approval and receive your bond instantly by email. Your document is ready to use right away.
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