How to Get a Lottery Agent License in Massachusetts
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How Do I Get a Lottery Agent License?
The Massachusetts State Lottery Commission (MSLC) licenses lottery retailers who meet certain eligibility requirements and financial responsibility standards.
To initiate the application process, you’ll need to create an application account in the Massachusetts State Lottery Licensing portal.
What Does the Licensing Process Involve?
When you submit an online application to become a lottery retailer in Massachusetts, you agree to a criminal records check and a review of your credit history by MSLC. Findings of concern, such as unpaid taxes and unresolved court judgments can, but don’t always, result in denial of a license.
Why Is a Lottery Bond Required?
The MSLC Director may require a lottery license applicant who does not meet the applicable financial responsibility criteria to provide MSLC (the bond’s “obligee”) with a surety bond in an amount established by the Director. Failing to furnish a bond when one is required as a condition for licensing will result in denial of the application.
The purpose of the bonding requirement is twofold: 1) to ensure that the bonded lottery retailer (the bond’s “principal”) operates in compliance with the terms of the Lottery Sales Agent Agreement, and 2) to provide a way for MSLC and the public to recover damages for any monetary loss stemming from the principal’s violation of those terms. Common violations include failing to remit lottery sales proceeds to MSLC and commingling lottery sales proceeds with other funds received by the lottery retailer.
How Does a Lottery Bond Work?
The third party to a Massachusetts lottery bond is the bond’s guarantor (the “surety”). The surety guarantees that the principal will pay valid claims against the bond, even though the terms of the bond establish the payment of claims as the legal obligation of the principal and indemnify the surety against any liability for claims. Therefore, the surety will pay a valid claim initially and then be reimbursed by the principal.
That initial payment by the surety does not relieve the principal of the obligation to pay valid claims. Consequently, failing to reimburse the surety can result in the surety taking legal action against the principal to recover the claim amount.
What Does a Lottery Bond Cost?
The annual premium for a Massachusetts lottery bond is the product of multiplying the required bond amount by the premium rate, which the surety sets based on an underwriting assessment of the risk involved in paying claims on the principal’s behalf. That assessment relies heavily on the principal’s personal credit score as a risk indicator.
A high credit score suggests that the risk to the surety is low, so the premium rate will also be low, usually between one and two percent. On the other hand, a low credit score is a red flag for higher risk, which results in a higher premium rate.
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