Your Guide to Lottery Bonds

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 bonds. If you have additional questions or want to explore bonding solutions for your business, speak with one of our knowledgeable surety bond experts.

CONTACT US FOR A

FREE LOTTERY BOND QUOTE

Why Apply for a Lottery Retailer License?

Since you’re reading about lottery bonds, it’s probably safe to assume you may be considering applying for a license to sell lottery tickets in a retail establishment you currently own or are thinking about opening. 

Lottery retailers (or lottery sales agents, as they are called in some states) earn commissions based on sales volume and bonuses for selling winning tickets—the bigger the win, the bigger the bonus. They also see an increase in the traffic to their shop when they sell lottery tickets. People passing by who notice the lottery signage and come in to buy lottery tickets may make some other purchases and even become regular customers. And customers who came in occasionally before lottery tickets were sold may come in more frequently. 

So lottery retailers not only gain additional income streams from lottery ticket sales, but also enjoy higher sales of their regular products and services.

What Does the Licensing Process Involve?

Every state has its own licensing process for lottery retailers. In some states, license applications are submitted online, while other states require the submission of paper applications by mail. In general, the application review process is designed to assess:

  • the establishment’s location and suitability for lottery ticket sales, and
  • the owner’s character and integrity and ability and willingness to comply with the state’s lottery statutes and the terms of the lottery retailer contract.

The state’s intent, to ensure the establishment meets certain standards, is to make sure an adequate lottery sales volume to justify the state’s investment in the site; without infringing on the business of neighboring retailers selling lottery tickets. Additionally, the state must verify the applicant’s location complies with the Americans with Disabilities Act so no adult is denied the opportunity to take part in the state lottery.

The state also has a vested interest in ensuring only people who meet certain ethical standards are granted a lottery retailer license. Submitting a signed lottery retailer license application authorizes the state to conduct criminal records checks and credit checks on the applicant(s) and to ascertain whether any back taxes are owed to the state. The intent is to screen out any applicants who have a criminal history or who don’t meet the state’s standards for financial responsibility–either of which suggests the potential for future unlawful or unethical behavior that could cause a monetary loss to the state or the public.

Most criminal convictions will disqualify an applicant, but failing to meet financial responsibility standards is not necessarily disqualifying. State lottery commissions often impose a bonding requirement to mitigate any financial risk to the state.

State-Specific Lottery Bonds

How to Get a Lottery Retailer License in Arkansas

How to Get a Lottery Sales Agent License in Connecticut

How to Get a Lottery Retailer License in Colorado

How to Get a Lottery Retailer License in Delaware

How to Get a Lottery Retailer License in Florida

How to Get a Lottery Retailer License in Georgia

How to Get a Lottery Retailer License in Illinois

How to Get a Lottery Retailer License in Iowa

How to Get a Lottery Retailer License in Louisiana

How to Get a Lottery Retailer License in Maine

How to Get a Lottery Retailer License in Massachusetts

How to Get Lottery Agency Bonds in Maryland

How to Get a Lottery Retailer Bond in Michigan

How to Get a Lottery Retailer License in Mississippi

How to Get a Lottery Retailer License in Missouri

How to Get a Lottery Retailer License in Nebraska

How to Get a Lottery Retailer License in New Jersey

How to Get a Lottery Retailer License in New York

How to Get a Lottery Retailer License in North Carolina

How to Get a Lottery Retailer License in North Dakota

How to Get a Lottery Retailer License in New Mexico

How to Get a Lottery Retailer License in Oklahoma

How to Get a Lottery Retailer License in Ohio

How to Get a Lottery Retailer License in Oregon

How to Get a Lottery Retailer License in Rhode Island

How to Get a Lottery Retailer License in South Carolina

How to Get a Lottery Retailer License in South Dakota

How to Get a Lottery Retailer License in Tennessee

How to Get a Lottery Retailer License in Texas

How to Get a Lottery Retailer License in Vermont

How to Get a Lottery Retailer License in Virginia

How to Get a Lottery Retailer License in Pennsylvania

How to Get a Lottery Retailer License in Washington

How to Get a Lottery Retailer License in West Virginia

How to Get a Lottery Retailer License in Wisconsin

How to Get a Lottery Retailer License in Wyoming

Why Do States Require Lottery Bonds?

When a state requires a lottery bond from all license applicants or only from certain applicants, the purpose is to protect the state against losses caused by a lottery retailer’s noncompliance with state laws, Lottery Commission regulations, or the terms of the lottery retailer contract or of the surety bond agreement. A lottery bond provides a way to compensate the state or any other party injured by the unlawful, unethical, or negligent acts of the licensed lottery retailer, such as not remitting lottery sales proceeds to the state or not reporting lost or stolen tickets. Bonding also helps maintain the lottery’s reputation for integrity and the public’s confidence in it. 

Learn More about Lottery Bonds

Every surety bond establishes a legally binding contract among three parties referred to as the “obligee,” the “principal,” and the “surety.” 

  • The obligee is the state’s lottery commission or other state entity requiring the bond.
  • The principal is the lottery retailer required to purchase the bond, and
  • The surety is the bond’s guarantor.

The obligee determines when a lottery bond is required and the required bond amount, then establishes the rules to follow to avoid claims against the bond. The principal must comply with those rules and is legally obligated to pay all valid claims for damages. The surety sets the premium rate for each applicant, investigates claims to determine their legitimacy, and guarantees their payment.

Because of that guarantee, the surety will pay a valid claim initially, to be reimbursed by the principal. Both the surety and the obligee are indemnified against any legal responsibility for damages caused by the principal.

The cost of a lottery bond is the product of multiplying the bond amount required by the obligee and the premium rate set by the surety. With this, the better the principal’s credit score, the lower the premium rate. An average rate for those with good credit is between one and three percent.

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 bonds. If you have additional questions or want to explore bonding solutions for your business, speak with one of our knowledgeable surety bond experts.

CONTACT US FOR A

FREE LOTTERY BOND QUOTE

Why Apply for a Lottery Retailer License?

Since you’re reading about lottery bonds, it’s probably safe to assume you may be considering applying for a license to sell lottery tickets in a retail establishment you currently own or are thinking about opening. 

Lottery retailers (or lottery sales agents, as they are called in some states) earn commissions based on sales volume and bonuses for selling winning tickets—the bigger the win, the bigger the bonus. They also see an increase in the traffic to their shop when they sell lottery tickets. People passing by who notice the lottery signage and come in to buy lottery tickets may make some other purchases and even become regular customers. And customers who came in occasionally before lottery tickets were sold may come in more frequently. 

So lottery retailers not only gain additional income streams from lottery ticket sales, but also enjoy higher sales of their regular products and services.

Every state has its own licensing process for lottery retailers. In some states, license applications are submitted online, while other states require the submission of paper applications by mail. In general, the application review process is designed to assess:

  • the establishment’s location and suitability for lottery ticket sales, and
  • the owner’s character and integrity and ability and willingness to comply with the state’s lottery statutes and the terms of the lottery retailer contract.

The state’s intent, to ensure the establishment meets certain standards, is to make sure an adequate lottery sales volume to justify the state’s investment in the site; without infringing on the business of neighboring retailers selling lottery tickets. Additionally, the state must verify the applicant’s location complies with the Americans with Disabilities Act so no adult is denied the opportunity to take part in the state lottery.

The state also has a vested interest in ensuring only people who meet certain ethical standards are granted a lottery retailer license. Submitting a signed lottery retailer license application authorizes the state to conduct criminal records checks and credit checks on the applicant(s) and to ascertain whether any back taxes are owed to the state. The intent is to screen out any applicants who have a criminal history or who don’t meet the state’s standards for financial responsibility–either of which suggests the potential for future unlawful or unethical behavior that could cause a monetary loss to the state or the public.

Most criminal convictions will disqualify an applicant, but failing to meet financial responsibility standards is not necessarily disqualifying. State lottery commissions often impose a bonding requirement to mitigate any financial risk to the state.

Only a few states require every applicant for a lottery retailer license to purchase a surety bond for the financial protection of the state and the public. And another few states require lottery retailers to pay a small monthly bonding fee to the Lottery Commission rather than purchase individual lottery bonds. 

In the states that do not require a lottery bond as a condition for licensing as a lottery retailer, the lottery statutes may give the Lottery Commission the right to require a surety bond from any applicant who falls short of the state’s financial responsibility standards. If you apply for a license in one of these states, you will be informed after your application is reviewed if you need to purchase a surety bond because of your credit history and/or financial circumstances.

When a state requires a lottery bond from all license applicants or only from certain applicants, the purpose is to protect the state against losses caused by a lottery retailer’s noncompliance with state laws, Lottery Commission regulations, or the terms of the lottery retailer contract or of the surety bond agreement. A lottery bond provides a way to compensate the state or any other party injured by the unlawful, unethical, or negligent acts of the licensed lottery retailer, such as not remitting lottery sales proceeds to the state or not reporting lost or stolen tickets. Bonding also helps maintain the lottery’s reputation for integrity and the public’s confidence in it. 

How to Get a Lottery Retailer License in Arkansas

How to Get a Lottery Sales Agent License in Connecticut

How to Get a Lottery Retailer License in Colorado

How to Get a Lottery Retailer License in Delaware

How to Get a Lottery Retailer License in Florida

How to Get a Lottery Retailer License in Georgia

How to Get a Lottery Retailer License in Illinois

How to Get a Lottery Retailer License in Iowa

How to Get a Lottery Retailer License in Louisiana

How to Get a Lottery Retailer License in Maine

How to Get a Lottery Retailer License in Massachusetts

How to Get Lottery Agency Bonds in Maryland

How to Get a Lottery Retailer Bond in Michigan

How to Get a Lottery Retailer License in Mississippi

How to Get a Lottery Retailer License in Missouri

How to Get a Lottery Retailer License in Nebraska

How to Get a Lottery Retailer License in New Jersey

How to Get a Lottery Retailer License in New York

How to Get a Lottery Retailer License in North Carolina

How to Get a Lottery Retailer License in North Dakota

How to Get a Lottery Retailer License in New Mexico

How to Get a Lottery Retailer License in Oklahoma

How to Get a Lottery Retailer License in Ohio

How to Get a Lottery Retailer License in Oregon

How to Get a Lottery Retailer License in Rhode Island

How to Get a Lottery Retailer License in South Carolina

How to Get a Lottery Retailer License in South Dakota

How to Get a Lottery Retailer License in Tennessee

How to Get a Lottery Retailer License in Texas

How to Get a Lottery Retailer License in Vermont

How to Get a Lottery Retailer License in Virginia

How to Get a Lottery Retailer License in Pennsylvania

How to Get a Lottery Retailer License in Washington

How to Get a Lottery Retailer License in West Virginia

How to Get a Lottery Retailer License in Wisconsin

How to Get a Lottery Retailer License in Wyoming

Every surety bond establishes a legally binding contract among three parties referred to as the “obligee,” the “principal,” and the “surety.” 

  • The obligee is the state’s lottery commission or other state entity requiring the bond.
  • The principal is the lottery retailer required to purchase the bond, and
  • The surety is the bond’s guarantor.

The obligee determines when a lottery bond is required and the required bond amount, then establishes the rules to follow to avoid claims against the bond. The principal must comply with those rules and is legally obligated to pay all valid claims for damages. The surety sets the premium rate for each applicant, investigates claims to determine their legitimacy, and guarantees their payment.

Because of that guarantee, the surety will pay a valid claim initially, to be reimbursed by the principal. Both the surety and the obligee are indemnified against any legal responsibility for damages caused by the principal.

The cost of a lottery bond is the product of multiplying the bond amount required by the obligee and the premium rate set by the surety. With this, the better the principal’s credit score, the lower the premium rate. An average rate for those with good credit is between one and three percent.

REQUEST A QUOTE

Request a quote online or call today to speak with one of our surety bond experts about obtaining the lottery bond you may need in your state.