How to Get a Lottery Agent License in Delaware

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How to Get a Lottery Agent License in Delaware

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 Delaware lottery bond needs.

How Do I Get a Lottery Agent License?

The Delaware Lottery Commission, part of the state’s Department of Finance, issues the lottery retailer license you will need if you want to add lottery sales as another source of revenue for your retail business.

What Does the Licensing Process Involve?

Your initial step is to download and complete the license application and all related forms and submit them to the Delaware Lottery Commission (DLC). Upon receipt of your application, DLC will dispatch a representative to your establishment to conduct a site assessment. If your site meets inspection criteria, DLC will go ahead and evaluate your license application package. 

If it looks like there is a good chance you will qualify for a license, DLC will move ahead with all of the background checks and an inspection specifically to ensure that your location meets the requirements of the Americans with Disabilities Act. The result will be a written license approval or denial.

License approval may be contingent upon the purchase of a surety bond.

Why Is a Lottery Bond Required?

The Lottery Director has the right to require a surety bond “in an amount consistent with [the Director’s] determination of the financial stability of said agent so as to avoid any monetary loss to the State because of the agent’s activities in the sale of lottery tickets.” A Delaware lottery bond serves as a lottery retailer’s guarantee to abide by the Delaware Code and the DLC’s rules. It also ensures that funds will be available in the event of a violation by the principal (such as failing to remit lottery proceeds or pay required fees owed to the state) to compensate the injured party.

How Does a Lottery Bond Work?

A Delaware lottery bond is a legally binding contract that brings together three parties referred to in surety bond lingo as the “obligee,” the “principal,” and the “surety.” DLC is the obligee requiring the bond, the lottery retailer is the principal required to purchase it, and the bond’s guarantor is the surety.

Although the principal is legally obligated to pay all valid claims, the surety has guaranteed that the principal will pay them. To make sure the matter is resolved swiftly, the surety typically pays a claim initially and is reimbursed later by the principal. A principal who does not repay the principal for a claim paid on the principal’s behalf risks a suit against them, by the surety, to recover the claim amount.

What Does a Lottery Bond Cost? 

Both the required bond amount and the premium rate for a Delaware lottery bond vary, depending on the principal’s financial strength and stability and the principal’s creditworthiness. The principal’s personal credit score is used as a measure of the risk the surety will be assuming in paying claims on behalf of the principal. 

A high credit score suggests a low risk of the surety not being repaid and should result in a premium rate in the range of 2% to 4%. A lower credit score is indicative of higher risk and warrants a higher premium rate.

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Our surety bond professionals will get you the Delaware lottery bond you need at a competitive rate.