Learn how to become licensed as a lottery retailer in Colorado, and speak with an Single Source Insurance agent today about purchasing the lottery bond you�ll need.
How Can I Get Licensed as a Lottery Retailer?
If you want to become one of the more than 3,000 lottery retailers operating in Colorado and enjoying the revenue from lottery ticket sales, you�ll need to obtain a license from the Colorado Lottery Commission (CLC). Learn more about the role of lottery brokers and why lottery bonds are required.
Steps in the Licensing Process
To initiate the licensure process, complete the contact form on the Colorado Lottery website. You will then be contacted by a Lottery Licensing Specialist, who will guide you through the application process. You will need to provide information about yourself, your retail establishment, and any other owners of the business.
In applying for a Colorado lottery retailer license, you will be authorizing CLC to conduct certain background checks, such as a criminal records check and credit history check.
The fees involved in becoming a Colorado lottery retailer include a $21 annual licensing fee, a $5 weekly communications fee, and, if you choose to participate in CLC�s bonding program, a $40 annual bonding fee per location. You have the option of purchasing a $2,000 Colorado lottery retailer surety bond, which typically costs less. If you are seeking a license to operate more than one retail location, you will need a separate bond for each.
Why Is a Colorado Lottery Bond Required?
Whether you choose to participate in CLC�s bonding program or purchase a surety bond on your own, the purpose of bonding is the same�to protect CLC (the bond�s �obligee�) and the public against any financial harm caused by a licensed lottery dealer�s noncompliance with the state�s lottery statutes. If such harm does occur, the lottery bond ensures that the lottery retailer (the �principal�) will compensate the injured party.
How Do Colorado Lottery Bonds Work?
A Colorado lottery bond brings the obligee and the principal together the bond’s guarantor (known as the “surety”) in a legally binding contract. That contract legally obligates the principal to pay all claims against the bond if the surety finds them to be legitimate. It also guarantees that the surety will pay them if the principal doesn’t.
Typically, unless the principal pays a valid claim right away, the surety will pay it instead. But the principal must then repay that debt to the surety. If the debt is not repaid, the surety can sue the principal to recover the funds.
How Much Does a Lottery Bond Cost?
Colorado lottery bond applications go through an underwriting process that uses information about the applicant�s background to determine the risk the surety will be accepting in guaranteeing the bond. The primary risk is that the principal might not repay the debt created by the surety paying a claim on the principal�s behalf.
A high personal credit score is a reliable indicator of low risk to the surety and usually results in a low interest rate, perhaps as low as one percent. That would make the annual premium for a $2,000 Colorado lottery bond only $20. A lower credit score suggests a higher risk level, which requires a higher premium rate.
Our surety bond professionals will get you the Colorado lottery bond you need at a competitive rate.