Lottery And Raffle Bonds
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What you need to know about Lottery And Raffle Bonds
Lottery bonds (also known as lotto bonds) are legally binding agreements between three parties: lottery ticket sellers or lottery machine operators, the government agency responsible for regulating lottery activity in the local jurisdiction, and a surety company.
The government agency is the Obligee and establishes the obligations that the licensed lottery ticket seller (the Principal) must follow. The surety (also called bonding company) issues the bond guaranteeing the performance of the seller.
Lottery bonds are required in most states to be eligible to sell lottery tickets or operate lottery equipment. When the surety company issues the bond, they provide the government agency a guarantee that the customers of a licensed lottery professional will receive payment for financial losses resulting from a violation of the statutes set forth by the regulating agency.
If the lottery professional fails to meet the obligations set out by the government agency, the surety will pay out damages up to the bond amount. The lottery professional is liable for the losses and is legally required to reimburse the surety company for any damages paid under the bond.
Lottery surety bond costs vary depending on the total bond amount and the premium rate. The regulating agency sets the required bond amount and the surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium.
Premium rates for lottery bonds typically range between 1% and 5% of the total bond amount. During the application process, the surety company evaluates your credit score, financial strength, and industry experience. Applicants with good credit generally receive the lowest rates, however, bad credit will not prevent you from securing a lottery bond. EZSurety can still offer competitive rates to individuals with low credit scores or other financial issues.
Below are the lowest premiums EZ Surety has issued for lottery surety bonds in popular states.
You’ll know if you need a surety bond because some entity will have required you to obtain one. They must also inform you of which specific bond type you’ll need. There are thousands of bonds across the country, all of which vary by state and industry.
Visit EZSuretyBonds.com to browse hundreds of bonds by state, type, or industry.
