You can be required to provide a surety bond naming the Texas Comptroller of Public Accounts as the bond’s “obligee” if the Lottery Director has any reason to believe that your acts as a retail agent could cause the state to suffer a financial loss. The obligee determines the necessary bond sum on a case-by-case basis. The bond offers a means of making up for losses sustained by the state or a member of the public as a result of your violation of Texas lottery laws and regulations.
How to Become a Lottery Retailer in Texas
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 Texas. 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?
Before you may sell tickets anywhere in the state of Texas, you must get a Texas ticket sales license. You can either apply online through the Lottery Services Portal or download the necessary application materials from the Texas Lottery website and mail them in with your completed application packet.
Why Is a Surety Bond Required?
How Do They Work?
One of the three parties to the enforceable lottery bond arrangement is the obligee who needs a Texas lottery bond. The other two are the retail lottery agent (referred to as the “principal” on the bond) and the entity securing the payment of claims (referred to as the “surety”). Although the surety is the guarantor, the principal is solely responsible for paying genuine claimants under the law. The guarantor is protected from all legal responsibility for claims by the terms of the surety bond arrangement.
When a claim is made, the surety evaluates it to see if it is legitimate and, if it is, pays the claim on the principal’s behalf. The surety will then be paid back by the principal. If the claim is not paid back, the surety may sue the principal to recoup the money.
What Are the Steps in the Licensing Process?
First, you authorize the Texas Lottery to undertake a credit history check and any criminal history check through the Texas Department of Public Safety, which necessitates electronic fingerprinting, whether you apply online or by mailing in a completed application. You’ll then be called to arrange a fingerprinting session after your application has been reviewed. From here, you will learn if providing a surety bond is required as a prerequisite for licensure.
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What Do They Cost?
The bond amount (determined by the obligee) and the premium rate (determined by the surety through underwriting) are multiplied to determine the annual cost of a Texas lottery bond. The personal credit score of a bond applicant is used by the underwriters to determine the likelihood the surety will not be compensated for claims paid on the principal’s behalf.
A low risk level is implied by a high credit score, and vice versa. The premium rate increases as the surety’s risk increases. For candidates with excellent credit scores, lottery bonds normally cost between 1 and 2 percent. A greater premium rate can be required of applicants with poorer credit ratings.
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How Do Texas Lottery Bonds Work?
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