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?
If you want to enjoy the additional income from selling lottery tickets in your retail establishment, you�ll need to be licensed by the Tennessee Education Lottery Corporation (TELC). Learn more about the role of lottery brokers and why lottery bonds are required.
Steps in the Licensing Process
To obtain an application for a Tennessee lottery retailer license, you�ll need to complete the contact form on the TELC website. Submitting the contact form will enable you to download the license application packet. You’ll also be contacted by someone from the TELC sales team who will guide you through the licensing process.
After you have submitted your completed application packet, a TELC representative will verify the information you provided and check out your establishment during a site visit. Your signed application also authorizes TELC to run background checks, including a credit history, criminal records check, and tax liability check.
After reviewing your application and background check results, TELC may inform you that you are required to furnish a �lottery bond. If that is the case, TELC will establish the required bond amount based on your financial strength and the average lottery sales by retailers in your district.
Why Is a Tennessee Lottery Bond Required?
When you purchase a Tennessee lottery bond, you are agreeing to comply with all TELC statutes and applicable state laws. A violation that results in the financial harm to TELC or the public gives the injured party the right to file a claim for damages against the bond. This provides two levels of financial protection or the state and the public�preventive and compensatory.
How Do Tennessee Lottery Bonds Work?
A Tennessee lottery bond is a legally binding contract among three parties with very different interests: TELC (the �obligee� requiring the bond), the party seeking licensure as a lottery retailer (the �principal�), and the bond�s guarantor (the �surety�).
The principal is legally obligated to pay all valid claims against the bond, but the surety has guaranteed the payment of claims by the principal. Therefore, after determining that a claim is legitimate, the surety will pay it initially. That payment does not relieve the principal of the legal obligation to pay valid claims. Instead, that obligation shifts to repaying the surety. The surety can take legal action against the principal for failing to live up to that obligation.
How Much Does a Lottery Bond Cost?
The annual premium for a lottery bond depends on the required bond amount and the premium rate, which is determined by the surety through an underwriting assessment of the risk of not being reimbursed for claims paid on the principal�s behalf.
The primary factor considered is the principal�s personal credit score. A creditworthy principal is deemed a low risk and will pay a low premium rate. A less creditworthy principal presents a higher risk to the surety and will be assigned a higher premium rate.
Request a convenient online quote today, or call and speak with one of our surety bond experts who can answer your questions about Tennessee lottery bonds.