How to Get a Lottery Agent License in Colorado
Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your Colorado lottery bond needs.
How Do I Get a Lottery Agent License?
You can add another source of revenue for your retail business by becoming a Colorado retail lottery sales agent. Lottery retailers are licensed by the Colorado Lottery Commission (CLC). To learn more about the role of a lottery retailer and how it can pay off for you, take a look at the retailer information kit published by CLC.
What Does the Licensing Process Involve?
When you’re ready, download and complete the retailer application, and submit it along with payment of required fees to CLC, Retail Licensing, in Pueblo.
The first page of the application packet is a checklist of the forms that must be completed and signed and other tasks to be accomplished pursuant to obtaining a lottery retailer license. One of those tasks is to comply with the bonding requirement, which can be met by participating in the state bonding program or by purchasing a surety bond on your own.
Why Is a Lottery Bond Required?
If you choose not to participate in the state bonding program, you will need to purchase a Colorado lottery surety bond from a company licensed to operate in the state. The bond must provide coverage in the amount of $2,000 for each location and must be submitted with your completed application.
The purpose of the bond is to ensure that lottery retailers operate in compliance with CLC rules and the terms of the lottery retailer agreement. In the event of a violation that causes CLC or a consumer to experience a monetary loss, the bond provides a way for the injured party to recover damages up to the $2,000 bond amount. The most common violation is failing to remit lottery sales proceeds or taxes due to the state.
How Does a Lottery Bond Work?
The surety bond agreement is a three-way contract among: CLC (“obligee”), the licensed lottery retailer (the “principal”), and the bond’s guarantor (the “surety”). Both the obligee and the surety are indemnified against any liability for damages caused by the principal’s unlawful or unethical business conduct. The legal obligation to pay legitimate claims belongs entirely to the principal.
However, having guaranteed that the principal will pay all valid claims, the surety typically pays a claim initially, to be reimbursed by the principal. Failing to repay the surety can result in the surety suing the principal to recover the claim amount.
What Does a Lottery Bond Cost?
Colorado lottery bonds are subject to underwriting, and the premium rate will reflect the underwriters’ assessment of the risk the surety will be assuming in agreeing to pay claims on the principal’s behalf. A bond applicant with a high personal credit score is assumed to present a low risk, deserving of a low premium rate, perhaps as low as 1%. Conversely, a low credit score is a red flag for a higher risk level, which warrants a higher premium rate.
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