A Lottery Bond is a type of license/permit surety bond. The bond also acts as a financial guarantee bond. Lottery bonds are required by state government agencies that administer the lottery programs the state participates in. The bond is usually a requirement of a business intent on gaining licensure to sell lottery tickets at their business establishment. The bond requirement typically remains for as long as the lottery retailer/lottery agent licensing is in place. The bond provides a form of security that the business selling the lottery tickets will comply with state laws, rules and regulations regarding the sale of lottery tickets.
Lottery bonds also provide a guarantee that the bonded business will remit the proceeds due the state government for the sale of lottery tickets in a timely manner. In cases where a business has a past due amount due the state for the sale of lottery tickets, a claim on the bond can be made to recover the unpaid amount. The Surety, the party providing the guarantee behind the bond, would have to pay the claim amount to cover their responsibility to the bond. The Surety would then attempt to collect the amount paid on the claim from the bond principal, the business selling the lottery tickets. The business is ultimately responsible for any amount paid on a claim by the Surety.
Lottery bond penalty amounts vary state to state. The typical bond amount required ranges from $5,000 to $20,000. Some states do have lottery bond requirements outside of this range though.
Lottery bonds are simple to process. At times, financial statements may be required to underwrite the bond. An agent will let you know exactly what is needed for your specific bond request to get the best quote.
Need a Bond? Here's how to get one. Read here for information about the bonding process.