How to Get a Lottery Bond in Virginia
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 Virginia Lottery Bond needs.
How Do I Get a Lottery Retailer Agents License?
In Virginia, the Virginia Lottery Licensing Department licenses retail lottery agents.
What Does the Licensing Process Involve?
The Virginia lottery website provides links allowing you to access DocuSign, where you can apply online for a lottery retailer license or to download and print a paper application, along with a checklist and instructions for completing and submitting it. Either application method requires you to provide certain supporting documents, including:
- Confirmation of your federal Employer Identification Number (EIN) from the IRS
- Proof of your Virginia Department of Taxation Sales and Use Registration
- Copy of your photo ID
- A letter from your bank confirming that you have opened a "Virginia Lottery - Trust" account
The licensing process requires you to undergo a credit history check, tax record check, and criminal record check. If they approve your application, your local Customer Service Center will contact you to complete the final steps, which include purchasing a Virginia lottery bond. The required bond amount depends on the applicant’s financial circumstances and the volume of lottery sales at that location.
Why Is a Lottery Bond Required?
The bonding requirement provides financial protection for the Commonwealth of Virginia and for consumers. It is a lottery retailer’s guarantee to abide by all regulations governing Virginia’s lottery system, which in itself provides a measure of protection. Additionally, the retailer is legally obligated to compensate the Commonwealth or any other party for a financial loss stemming from an unlawful or unethical act that violates the terms of the surety bond agreement.
How Does a Lottery Bond Work?
A Virginia lottery bond is a legally binding contract that brings together three parties known as the obligee (the Virginia Lottery), the principal (the lottery retailer), and the surety (the bond’s guarantor). Although the bond legally obligates the principal to pay all legitimate claims resulting from the principal’s unlawful or unethical actions, the surety will pay a claim initially, to be repaid later by the principal. A principal fails to reimburse the surety for claims paid on the principal’s behalf can be sued by the surety.
What Does a Lottery Bond Cost?
The annual premium cost for a Virginia lottery bond can be as little as one percent of the required bond amount for a principal with good credit. A good credit score assures the underwriters that the risk of the principal not repaying the surety is low. However, someone with lesser credit will pay a premium rate that is significantly higher because of the higher risk to the surety.
A creditworthy bond applicant presents little risk to the surety and is assigned a low premium rate—as low as one percent. A credit-challenged individual is a greater risk to the surety and will pay a higher premium rate.
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