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?
The Maryland State Lottery and Gaming Control Agency (the �Agency�) license lottery retailers throughout the state. Learn more about the role of lottery brokers and why lottery bonds are required.
What Are the Steps in the Licensing Process?
You initiate the process to become a lottery agent in Maryland by filling out and submitting an application to the Agency. The application requires personal information and signatures from all owners of the business. Everyone listed on the application must disclose any past or pending criminal offenses.
You must also provide information about the retail location, such as its business hours and an estimate of the average weekly traffic in and out of the establishment.
After reviewing the application, the Agency may require you to purchase a Maryland lottery agency bond if you don’t meet the applicable financial responsibility standards to reliably carry out the fiduciary duties of a Maryland lottery agent as custodian of unsold lottery tickets and lottery sales proceeds.
Why Is a Maryland Lottery Bond Required?
There are two main reasons for the bonding requirement.
- It serves as a guarantee that you will operate in compliance with all Agency regulations.
- It legally obligates you to compensate the Agency or other injured party for financial losses caused by your noncompliance with those regulations.
Thus, a Maryland lottery bond provides a measure of financial protection for both the Agency and the public.
How Do Maryland Lottery Bonds Work?
There are three parties to a Maryland lottery bond, which forms a legally binding contract among them. The surety bond agreement refers to them as the �obligee� (the Agency), the �principal� (the lottery agent), and the �surety� (the bond�s guarantor).
The terms of the bond place the legal obligation to pay valid claims squarely on the shoulders of the principal, but the surety guarantees that they will be paid. Therefore, the surety will pay a claim initially and be reimbursed by the principal. If necessary, the surety can take the principal to court to recover the claim amount.
How Much Does a Lottery Bond Cost?
The Agency tells the principal if a lottery bond is required and what the required bond amount is. That amount varies, depending on the level of financial protection the Agency believes is warranted. But the surety sets the premium rate based on an underwriting assessment of the risk that the principal won�t reimburse the surety for claims paid on the principal�s behalf. Multiplying the bond amount by the premium rate yields the annual bond premium.
The principal�s personal credit score is the primary factor considered in setting the premium rate.� A high credit score is proof that the principal has exercised financial responsibility in the past and is likely to continue to do so. Because the risk of non-repayment is low, the premium rate will also be low. A lower credit score will result in a higher premium rate. The average premium rate for a Maryland lottery bond is between two and four or five percent.
Our surety bond professionals will get you the Maryland lottery bond you need at a competitive rate.