Learn how to become licensed as a lottery retailer, 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?
Before you can start selling lottery tickets in your retail establishment, you must obtain a license from the North Carolina Education Lottery (NCEL). Learn more about the role of lottery brokers and why lottery bonds are required.
Steps in the Licensing Process
You�ll find the downloadable application packet, instructions for completing it, and an application checklist on the NCEL website. Fill out the application with information on each owner of the establishment, with signatures authorizing criminal record checks, credit checks, and tax liability checks. Submit the completed packet, along with any supporting documents, and payment of the $75 application fee to the address indicated on the application.
If, upon reviewing your application, NCEL has concerns about your level of financial responsibility, you may be required to purchase a lottery bond in an amount determined by NCEL before being granted a license.
Why Is a North Carolina Lottery Bond Required?
There is the potential for financial harm to NCEL (the �obligee� requiring the bond) and the public if a lottery retailer (the �principal� required to purchase the bond) misappropriates lottery funds or fails to remit lottery sales proceeds to the state. The bond establishes a legal requirement for the principal to operate in full compliance with state laws and NCEL regulations, and to compensate the state or other injured party for financial damages resulting from the principal�s noncompliance.
After two years without incident, NCEL will reassess the situation and may drop the bonding requirement.
How Do North Carolina Lottery Bonds Work?
A fully executed North Carolina lottery bond agreement establishes a legally binding contract between the obligee and the principal and a third party known as the �surety.� This is the bond�s guarantor�the party guaranteeing the payment of all valid claims. The legal obligation to pay those claims, however, belongs entirely to the principal. The surety is indemnified against any legal liability for them.
Consequently, the surety will pay a valid claim initially, but must then be reimbursed by the principal. Failing to repay that debt can result in the surety taking legal action against the principal to recover the claim amount.
How Much Does a Lottery Bond Cost?
North Carolina lottery bonds are subject to underwriting. The premium rate is set by the surety based on an assessment of the risk inherent in paying valid claims on the principal�s behalf. The primary measure of that risk is the principal�s personal credit history.� A high credit score is consistent with a low risk level, which is deserving of a low premium rate, while a low credit score is a red flag for higher risk and warrants a higher premium rate. The average premium rate for a North Carolina lottery bond is in the range of 2% to 4%.
Our surety bond professionals will get you the North Carolina lottery bond you need at a competitive rate.