How to Get a Tennessee Lottery Retailer Bond
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 Tennessee Lottery Retailer Bond needs.
How Do I Get a Lottery Retailer Agents License?
In Tennessee, the Tennessee Education Lottery Corporation (TELC) issues lottery retail licenses. The only ineligible businesses are pawnshops, cash advance outlets, and retailers wanting to sell only lottery tickets.
What Does the Licensing Process Involve?
If you are interested in becoming licensed as a Tennessee lottery retailer, completing and submitting the contact form on the TELC website will give you instant access to a downloadable license application. It will also prompt a TELC sales team member to reach out and offer you any assistance you might need to acquire a lottery retailer license.
After you have submitted your application packet, a TELC sales representative will visit your retail establishment to verify the information provided in the application and that you sell products other than lottery tickets. TELC will also conduct a credit check, criminal records check, and make sure that you don’t owe any outstanding taxes to the Tennessee Department of Revenue.
One of the final steps in the licensing process is to purchase a Tennessee lottery retailer bond in an amount established by TELC based on your financial strength and the average lottery sales in your district.
Why Is a Lottery Bond Required?
Purchasing a lottery bond is a lottery retailer’s guarantee to operate under the statutes set forth in the Tennessee Education Lottery Corporation’s Implementation Law, for example, paying all state taxes and fees. The bond also provides a way to compensate both TELC (the “obligee” requiring the bond) and consumers for financial harm resulting from any unlawful or unethical actions of the lottery retailer (the “bond’s principal”).
How Does a Lottery Bond Work?
A Tennessee lottery bond is legally binding on three parties—the obligee, the principal, and the bond’s guarantor, known as the “surety.” The legal obligation to pay valid claims belongs entirely to the principal, but the surety guarantees payment. Because of that guarantee, the surety will pay a legitimate claim initially and give the principal a certain amount of time to repay that amount. If that repayment is not forthcoming, the surety can sue the principal to obtain it.
What Does a Lottery Bond Cost?
The premium you will pay for a Tennessee lottery retailer bond, depends on two factors: the bond amount required by the obligee and the premium rate the surety assigns you through an underwriting process. The premium rate will be high enough to mitigate the risk that you might not readily repay the surety for claims paid by the surety on your behalf.
That risk level is determined largely by your personal credit score, which is a measure of how responsible you are about paying debts in the past. The assumption is that if your credit score is high, the risk to the surety is low, which means your premium rate should be low as well, perhaps as low as one to two percent. On the other hand, a low credit score is interpreted as a red flag signaling high risk, which means the premium rate will be higher to offset the higher risk.
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Our surety bond professionals will get you the Tennessee lottery retailer bond you need at a competitive rate.