Learn how to become licensed as a lottery retailer in Minnesota, 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 start selling lottery tickets in your retail establishment, you�ll need to become licensed by the Minnesota State Lottery (MSL).
Steps in the Licensing Process
You can download the necessary forms and instructions for completing them from the Minnesota Lottery website. You will need to return your completed application and two copies of the Retailer Contract to MSL; the Lottery will return one signed copy to you upon approval of your license. The application fee is $100 per retail location.
Your signature authorizes MSL to do some background checks on you�credit history, criminal records, and state and local tax liabilities. MSL�s accountants will review your credit history and determine whether you meet the Lottery�s financial responsibility standards. If you don�t, you will be required to purchase a surety bond in the amount of $3,000.
Why Is a Minnesota Lottery Bond Required?
MSL�s concern is that retailers whose credit leaves something to be desired may misappropriate lottery funds or fail to remit lottery ticket sales proceeds as required. A lottery bond serves as a retail agent’s guarantee to operate in accordance with Minnesota laws and Lottery regulations. It also requires the retailer (the bond’s “principal”) to pay damages to MSL (the bond’s obligee”) or other parties that experience financial harm due to the principal’s noncompliance.
Through this combination of prevention and compensation, a Minnesota lottery bond provides financial protection for both MSL and the public. MSL may discontinue the bonding requirement if six months pass without incident.
How Do Minnesota Lottery Bonds Work?
There is a third party to the legally binding surety bond agreement: the company serving as the bond�s guarantor (the �surety�). The surety guarantees the payment of claims against the bond, but the principal is legally obligated to pay them. It�s up to the surety to investigate claims and decide which ones are legitimate and must be paid.
Unless the principal pays a valid claim right away, the surety will pay it. That payment creates a debt that the principal now owes to the surety and is legally obligated to repay. The surety is indemnified against responsibility for damages resulting from the principal�s unlawful or unethical actions and can initiate legal action to recover the debt, if need be.
How Much Does a Lottery Bond Cost?
Every Minnesota lottery bond is subject to underwriting, which is how the surety sets the premium rate. The factor with the biggest impact on that determination is the principal�s personal credit score.
A high credit score indicates that a principal is financially responsible and very unlikely to cause claims against the bond or repay the surety if there were to be a claim. The low risk level results in a low premium rate. A low credit score, however, is cause for concern about the risk to the surety, which warrants a higher premium rate.
Our surety bond professionals will get you the Minnesota lottery bond you need at a competitive rate.