Ohio Lottery Bonds
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 your Ohio lottery bond needs.
What Are They?
The Ohio Lottery Commission licenses lottery sales retailers to sell Ohio lottery tickets on a commission basis. That means that the retailer pays the Commission for lottery tickets only after the tickets have been sold. Purchasing an Ohio lottery bond is a prerequisite for getting and keeping a lottery license, so this is classified as a type of license and permit surety bond.
An Ohio lottery bond serves as a lottery retailer’s pledge to comply with all state laws and regulations regarding the sale of lottery tickets, most notably remitting the proceeds of lottery ticket sales to the Ohio Lottery Commission. The lottery bond also provides a source of funds for paying valid claims against the bond.
Who Needs Them?
Every applicant for a new or renewal license as an Ohio lottery sales retailer is required to purchase a $15,000 lottery bond, which must be renewed at every license renewal.
Speak with a Surety Bond Professionals agent today to discuss your bonding needs.
How Do They Work?
The surety bond agreement for an Ohio lottery bond brings together these three parties in a legally binding contract:
- The Ohio Lottery Commission, the party requiring the bond, is the “obligee.”
- The lottery sales retailer required to purchase the bond is the “principal.”
- The bonding company underwriting and authorizing the lottery bond is the “surety.”
If the principal fails to remit the proceeds from lottery ticket sales to the obligee on schedule, the obligee can file a claim against the principal’s Ohio lottery bond to recover those proceeds and any penalties or fines due.
The terms of the surety bond agreement make the principal solely responsible for paying claims. However, the surety will typically pay the claim and then be reimbursed by the principal. The surety does this for a few reasons. It ensures prompt payment of claims, and it gives the principal some time to gather the funds to repay the surety. It’s common for the surety to allow the principal to repay the debt in installments over a certain period of time.
What Do They Cost?
The surety bonding company establishes the premium rate for an Ohio lottery bond on a case-by-case basis, depending largely on how much risk the surety perceives there to be in extending credit to the principal. The surety’s main concern is being reimbursed for claims payments made by the surety directly to the Ohio Lottery Commission. The best indicator of risk is the principal’s personal credit score.
The higher the principal’s credit score, the lower the premium rate. It can be as low as 1% for someone with great credit.
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Our surety bond professionals will get you the Ohio lottery bond you need at a competitive rate.