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?
To become a lottery retail agent in Pennsylvania, you�ll need to obtain a license from the Pennsylvania Department of Revenue, Bureau of State Lotteries. You must have an active retail establishment before applying for a lottery agent license. Learn more about the role of lottery brokers and why lottery bonds are required.
Steps in the Licensing Process
Your journey toward licensure as a lottery retailer begins with a visit to the Pennsylvania Lottery website, where you�ll need to complete the online contact form. You’ll soon get a call from a representative of the Lottery who will guide you through the licensing process.
In submitting an application, you will be authorizing the Lottery to pull your credit history, initiate a criminal records check by the Pennsylvania State Police, request a tax clearance check from the Pennsylvania Department of Revenue, and conduct an inspection of your retail establishment to ensure compliance with the Americans with Disabilities Act.
After reviewing your license application, the Lottery Bureau may inform you that you need to purchase a Pennsylvania lottery bond.
Why Is a Pennsylvania Lottery Bond Required?
The Pennsylvania Code (chapter 805.9) gives the Lottery Bureau the option of requiring a surety bond from any licensed agent in an amount determined by the Bureau �to avoid any monetary loss to this Commonwealth because of the activities of an agent in the sale of lottery tickets.�
A lottery bond serves as an agent�s guarantee to operate in full compliance with applicable state laws and the regulations governing the Pennsylvania Lottery and to compensate the Bureau (the bond�s �obligee�) or any other party incurring a financial loss because of a violation committed by the agent (the bond�s principal�).
How Do Pennsylvania Lottery Bonds Work?
A Pennsylvania lottery bond is a legally binding contract involving the bond�s obligee and principal, as well as a third party�the bond�s guarantor (known as the �surety�). The legal obligation to pay valid claims against the bond belongs exclusively to the principal, but the surety guarantees payment.
Therefore, the surety will pay a claim initially, after verifying its validity.� In making that payment, the surety is extending credit to the principal, who must subsequently repay the surety. Failing to repay the debt can subject the principal to legal action by the surety.
How Much Does a Lottery Bond Cost?
The annual premium or a Pennsylvania lottery bond is calculated by multiplying the required bond amount established by the obligee by the premium rate that the surety sets through underwriting. The premium rate will reflect the underwriter�s assessment of the risk that the principal might not repay the surety for a claim paid on the principal�s behalf. That assessment relies heavily on the principal�s personal credit score.
With a high credit score, the assumption is that the risk to the surety is low, which results in a low premium rate. A lower credit score is a sign o greater risk so the premium rate will be higher.
Request a convenient online quote today, or call and speak with one of our surety bond experts who can answer your questions about Pennsylvania lottery bonds.