An Arkansas lottery bond is required when ASL has concerns about an applicant’s level of financial responsibility and the possibility of the individual causing financial harm to ASL (the “obligee” requiring the bond) or the public. The terms of the bond require the retailer (the “principal” purchasing the bond) to do lottery business in accordance with all applicable state laws and ASL regulations and gives the injured party the right to claim compensation for damages in the event of a violation that causes financial harm.
How to Get a Lottery Retailer License in Arkansas
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 Arkansas. 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?
In Arkansas, lottery retailers are licensed by the Arkansas Scholarship Lottery (ASL). If you’re interested in selling lottery tickets in your retail location, call ASL Retailer Licensing at 501-978-3950 to obtain a license application packet and instructions for completing it.
Why Is a Surety Bond Required?
How Do They Work?
The surety bond forms a legally binding contract among three parties: the obligee, the principal, and the bond’s guarantor (called the “surety”). The surety guarantees the payment of claims by agreeing to extend credit to the principal if needed for the purpose of paying a valid claim. The surety determines which claims are valid and which aren’t.
Normally, unless the principal pays a valid claim immediately, the surety pays it on the principal’s behalf, tapping into the line of credit established for the principal when the bond was issued. The principal is legally obligated to repay the debt resulting from the surety paying a claim initially. A principal who does not repay the surety may be subject to legal action by the surety to recover the debt.
What Are the Steps in the Licensing Process?
The lottery retailer license application packet contains several forms that must be completed in their entirety: ASL Landlord Approval Form, ASL Record Check Form, ASL Fingerprint Verification Form, Electronic Funds Transfer (EFT) Form.
Upon completion of the review of your application, ASL will let you know whether you qualify for the Self-Bond program, which will cost you only $50 per year for each retail location. If you don’t meet the financial responsibility standards required for participation in the Self-Bond program, you will need to purchase a surety bond or put up security in the form of interest-bearing securities. Purchasing an Arkansas lottery bond is the less expensive of these two options. ASL will let you know what your required bond amount is.
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What Do They Cost?
The annual premium for an Arkansas lottery bond is a small percentage of the required bond amount. That percentage is the premium rate, which is assigned by the surety through underwriting. The underwriters are mainly concerned about the risk of the surety not being repaid for claims paid on the principal’s behalf. The primary way that risk is measured is by the principal’s personal credit score.
With a high credit score, the risk is assumed to be low, which results in a premium rate as low as 1%. A lower credit score suggests higher risk and results in a higher premium rate.
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How Do Arkansas Lottery Bonds Work?
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