How to Get a Lottery Agent License in Iowa
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 Iowa lottery retailer's bond needs.
How Do I Get a Lottery Agent License?
If you’re considering the possibility of acquiring an additional income stream for your business by becoming a lottery retailer, you will need to obtain a license from the Iowa Lottery Authority (ILA). Visit the Iowa Lottery website to begin the process, which is executed through the GovConnectIowa web portal.
What Does the Licensing Process Involve?
Some of the entries you will make as you work your way through the online application will authorize various background checks into your credit history, any criminal records, and so on. After you have completed the application, ILA will review your financial circumstances and decide whether you meet the financial responsibility criteria or licensure. If you don’t, you may be required to purchase a surety bond before being granted a lottery retailer license. ILA will determine the required bond amount.
Why Is a Lottery Bond Required?
The bonding requirement protects ILA (the bond’s “obligee”) and the public from financial harm in the event that the lottery retailer (the bond’s “principal”) violates the lottery regulations set forth in Iowa Statutes 99G.1-42. It does this in two ways: 1) by requiring licensed lottery retailers to operate in full compliance with those statutes, and 2) legally obligating the principal to compensate ILA or any member of the public experiencing a financial loss as a result of the principal’s unlawful or unethical actions.
How Does a Lottery Bond Work?
An Iowa lottery bond is a legally binding contract between the obligee, the principal, and a third party known as the “surety”—the party guaranteeing the bond and the principal’s payment of claims. Because of that guarantee, the surety typically pays a valid claim initially and is subsequently reimbursed by the principal. The surety can take legal against a principal who fails to reimburse the surety for claims paid on the principal’s behalf.
What Does a Lottery Bond Cost?
Iowa lottery bonds go through an underwriting process to establish the premium rate on a case-by-case basis. The underwriters’ main concerns is the risk that the principal will not reimburse the surety for claims paid on the principal’s behalf. The best way to gauge that risk is to look at the principal’s personal credit score, as someone who has a history of handling credit responsibly and paying their debts will most likely continue to do so.
With a high credit score, the risk is assumed to be low, which deserves a low premium rate—generally one or two percent. On the other hand, a low credit score suggests a higher risk level and results in a higher premium rate.
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