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 lottery bond needs.
How Do I Get a Lottery Agent License?
If you are interested in becoming an Arkansas Scholarship Lottery (ASL) retailer, you’ll need to call ASL Sales at 501-683-1884 or Retailer Licensing at 501-978-3950 to obtain an application.
What Does the Licensing Process Involve?
The application package includes several forms that must be filled out and submitted for the application to be considered complete—a landlord approval form, record check form, fingerprint verification form, and electronic funds transfer form.
In addition to completing and submitting an application, applicants for a retail lottery license in Arkansas must either be approved to participate in the ASL’s Self-Bond program or obtain a surety bond or deposit interest-bearing or accruing securities with the ASL. ASL will let every applicant know whether or not they are eligible for the self-bonding option, which involves a $50 per month payment to ASL for each of the retailer’s locations. If a surety bond is required, ASL will inform the applicant of the required bond amount.
Why Is a Lottery Bond Required?
The bonding or security requirement is intended to ensure a lottery retailer’s compliance with ASL rules, especially regarding the remittance of lottery sales proceeds and other key aspects of the lottery retailer contract. If a lottery retailer, the “principal” in the legally binding surety bond agreement, violates ASL rules and causes ASL, the “obligee” requiring the bond, or any other party, to incur a financial loss, the bond ensures that the injured party will be compensated.
How Does a Lottery Bond Work?
The third party to an Arkansas lottery bond is the bond’s guarantor, known as the “surety.” The surety guarantees the payment of valid claims against the bond, but the legal obligation to compensate claimants belongs entirely to the principal. However, to ensure a swift resolution, the surety typically will pay a valid claim initially, on behalf of the principal.
That payment to the claimant does not eliminate the principal’s obligation, and the surety, like the obligee, is indemnified against responsibility for damages caused by the principal. Consequently, the principal must repay the surety. Failure to do so can result in the surety taking legal action against the principal to recover the claim amount (plus legal fees).
What Does a Lottery Bond Cost?
The annual premium for an Arkansas lottery bond is a small percentage of the required bond amount established by ASL as the bond’s obligee. The surety determines what that percentage (the premium rate) will be for a given bond applicant based on an underwriting assessment of the risk of the surety not being repaid for claims paid on the principal’s behalf. The assessment leans heavily on the principal’s personal credit score as a measure of that risk.
The higher the principal’s credit score, the lower the risk to the surety, and the lower the premium rate, potentially as low as one percent for someone with great credit. The reverse is also true, so a low credit score results in a higher premium rate.
Get a Quote
Our surety bond professionals will get you the Arkansas lottery bond you need at a competitive rate.
