How to Get a Lottery Agent License in Rhode Island
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How Do I Get a Lottery Retailer Agents License?
The Licensing Department of Rhode Island’s Department of Revenue, Division of Lotteries (the “Division”) issues lottery retailer licenses. Only businesses properly registered with the Rhode Island Secretary of State and the Department of Revenue, Division of Taxation, are eligible to become lottery retailers.
What Does the Licensing Process Involve?
The Rhode Island Lottery Sales Application and other forms that must be completed and submitted to the Rhode Island Lottery are available online. You must submit a form called The Authorization to Release Information, with the completed application authorizing the Division to conduct background checks into a prospective lottery retailer’s finances, credit history, and any criminal records as part of the evaluation of the applicant’s suitability for licensure.
While some findings can cause an applicant to be denied, others may not rise to that level but still be concerning. In such cases, the applicant may be required to provide the Division with a surety bond as a condition for approval.
Why Is a Lottery Bond Required?
The Division’s Director may impose a bonding requirement if there is reason to believe an applicant does not meet Rhode Island’s financial responsibility standards. The Director will determine what the bond amount must be, to provide sufficient protection for the Division (the bond’s “obligee”) against monetary losses caused by an infraction of lottery rules and regulations by the lottery retailer (the bond’s “principal”). One of the most common rule violations is failing to remit lottery sales proceeds or fees owed to the Division.
How Does a Lottery Bond Work?
The terms of the surety bond legally obligate the principal to pay all valid claims against the bond. But there’s a third party to the surety bond—the “surety” who guarantees the payment of claims. As the guarantor, the surety will pay a valid claim up front, on the principal’s behalf and then the principal will reimburse it. If not reimbursed, the surety can take legal action against the principal to recover the claim amount.
What Does a Lottery Bond Cost?
The annual premium for a Rhode Island lottery bond is a small percentage of the required bond amount. That percentage is the premium rate, which is set by the surety based on an underwriting assessment of the risk of paying claims on the principal’s behalf. That assessment uses the principal’s personal credit score as a risk measurement.
Someone with a high credit score shows responsibility paying bills in the past and presents a low risk to the surety. A low-risk merits a low premium rate, typically one to two percent. A principal with lesser credit presents a higher risk to the surety and, accordingly, is assigned a higher premium rate.
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