Learn how to become licensed as a lottery retailer in Iowa, 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?
To benefit from the additional revenue stream that comes from being a lottery retailer in Iowa, you�ll need to obtain a license from the Iowa Lottery. The Iowa Lottery website provides several options for contacting the Lottery with questions about the licensing process. Learn more about the role of lottery brokers and why lottery bonds are required.
Steps in the Licensing Process
The Iowa Lottery website also provides instructions for applying online through the GovConnectIowa portal. Submitting a completed application authorizes the Iowa Lottery to run criminal records, credit history, and tax liability checks.
Based on those checks, the Iowa Lottery may require an applicant to purchase an Iowa lottery retailer bond as a condition for being approved for a license. The Lottery will email the applicant when a license has been granted or if further information or a surety bond is required. When a bond is required, the Lottery will determine the required amount on a case-by-case basis.
Why Is an Iowa Lottery Bond Required?
The bonding requirement is intended to provide financial protection for the Iowa Lottery (the �obligee� requiring the bond) and the public. The bond is a pledge by a lottery retailer (the bond�s �principal�) to operate in compliance with Lottery regulations as set forth in Iowa Code 99G.1-42.
Any violation of state law or Lottery regulations that causes financial harm to the obligee or other party can result in a claim for damages being filed against the bond.
How Do Iowa Lottery Bonds Work?
There is a third party to the legally binding Iowa lottery bond agreement�the bond�s guarantor (the �surety�). The surety investigates each claim to make sure it�s valid before approving it for payment. The principal is legally obligated to pay all valid claims, but the surety guarantees that they will be paid.
Because of that guarantee, the surety typically will pay a claim initially to ensure that it�s resolved promptly. The principal then reimburses the surety. The surety is indemnified against any liability for claims and therefore can take legal action against the principal to secure repayment, if necessary.
How Much Does a Lottery Bond Cost?
The annual premium for an Iowa lottery bond is a small percentage of the required bond amount established by the obligee. That percentage is the premium rate, which is set by the surety through underwriting. The biggest underwriting concern is the possibility that the principal might not repay the surety for claims paid on the principal’s behalf.
The assumption is that a principal with a high personal credit score presents has handled credit responsibly in the past and therefore presents a low risk of non-repayment to the surety. Low risk results in a low credit score. Conversely, an applicant with a low credit score is a higher risk and pays a higher premium rate.
The average premium rate for an Iowa lottery bond is in the range of 2% to 4%.
Our surety bond professionals will get you the Iowa Lottery bond you need at a competitive rate.