Learn how to become licensed as a lottery retailer in Virginia, 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 operate as a lottery retailer in Virginia, you will need to be licensed by the Virginia Lottery Licensing Department.
Steps in the Licensing Process
From the Virginia lottery website, use the link to DocuSign. You can either fill out the application for a lottery retailer license online or download and print a hardcopy of the application checklist and instructions. Both online and hard copy applications require some supporting documents, such as:
- IRS confirmation of your federal Employer Identification Number (EIN)
- Evidence of your Sales and Use Tax registration with the Virginia Department of Taxation
- Copy of a government-issued photo ID
- Confirmation from your bank that you have established a “Virginia Lottery – Trust” account
By submitting your completed lottery retailer application, you authorize the Lottery to obtain your credit history, conduct checks of your tax records (to make sure you have no outstanding state tax liabilities), and any criminal records. Certain past offenses are disqualifying.
Upon approval of your application, your local Customer Service Center will get in touch with you about the final steps in the licensing process, including the purchase of a Virginia lottery bond. The amount of the bond varies, depending on an applicant’s financial strength and the retail establishment’s historical or projected lottery sales volume.
Why Is a Virginia Lottery Bond Required?
The Virginia Lottery (the bond�s �obligee�) requires a lottery bond as financial protection for the Commonwealth of Virginia and the public. The surety bond agreement requires a lottery retailer (the bond�s �principal�) to operate in full compliance with Lottery regulations and applicable state laws. The bond also legally obligates the principal to compensate the obligee or other injured party for monetary damages resulting from the principal�s violation of any of the terms of the surety bond agreement.
How Do Virginia Lottery Bonds Work?
A Virginia lottery bond is a legally binding contract among three parties: the obligee, the principal, and the bond�s guarantee (known as the �surety�). Despite the principal�s legal obligation to pay all valid claims against the lottery bond, the surety has guaranteed their payment. So, unless the principal pays a claim as soon as the surety declares it legitimate, the surety will go ahead and pay it. That does not let the principal off the hook, though, so the principal�s obligation shifts to repaying the surety. Failure to repay the debt can result in the surety taking legal action to recover the funds.
How Much Does a Lottery Bond Cost?
Virginia lottery bonds are sold for an annual premium that is the result of multiplying the required bond amount established by the obligee by the premium rate set by the surety. That premium rate is determined through an underwriting process that considers the risk of the principal committing a violation that triggers claims and of the surety not being reimbursed for claims paid on the principal�s behalf. The principal�s creditworthiness is a key factor in that assessment.
For a principal with good credit, the premium rate could be as low as 1%. A less creditworthy applicant presents a greater risk to the surety and warrants a higher premium rate.
Our surety bond professionals will get you the Virginia lottery bond you need at a competitive rate.