Lottery Bond: What should you know about this Surety Bond?
A lottery bond also called a lotto bond is a type of surety bond that is purchased by business owners who sell state lottery tickets through their business, such as gas stations and convenience stores. This bond helps the state to ensure that the business owner will comply with all lottery ticket sales regulations that are in place. If you plan to sell lotto tickets, then you will need to obtain a lottery bond before starting sales.
Why do I need a lottery bond?
The state needs to protect it as well as consumers who purchase lottery tickets from unscrupulous ticket sellers who attempt to tamper with the equipment used for the lottery or mishandle the money for the lotto. This bond is a level of protection that ensures that business owners will follow state-mandated regulations in order to maintain the fairness of the lottery system. Without this bond, you will not be allowed to sell lottery tickets.
How much does a lottery bond cost?
Because each state is different, and because there are different bond amounts required, then the cost of a lottery bond varies. We can quickly give you a free quote for a lottery bond for your business. Our licensed agents are ready to help guide you through the simple process of obtaining your lotto bond as quickly as possible.
How does the lottery bond work?
There are three key parts of any surety bond. The obligee, the principal, and the surety. The obligee is the agency that requires the bond. In the case of the lotto bond, the state is the obligee. The principal is the person or business that purchases the bond. The surety is the underwriter of the bond.
If the obligee feels that there has been illegal activity, tampering, or fraud involved in the business owner’s lottery sales, then they will file a claim against the bond with the surety company. If the claim is determined to be valid, then the surety will make a payment to the obligee. The principal is then responsible for reimbursing the surety company for the amount paid toward the claim.