How to Get a Lottery Bond in Pennsylvania

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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 Pennsylvania Lottery Bond needs.

How Do I Get a Lottery Retailer Agents License?

In Pennsylvania, retail lottery agents are licensed by the Pennsylvania Department of Revenue, Bureau of State Lotteries. Lottery agent licenses are issued only to current business owners.

What Does the Licensing Process Involve?

If you’re interested in becoming a Pennsylvania lottery retailer, visit the Pennsylvania Lottery website and complete the online contact form. A Lottery representative will call you back with information to help you get started. If you decide to apply for a license, you will undergo:

  • A credit check by the Pennsylvania Lottery Bureau
  • A criminal background check by the Pennsylvania State Police
  • A tax clearance check by the Pennsylvania Department of Revenue, to make sure you are no in arrears on any state taxes
  • An ADA (Americans with Disabilities Act check by the Pennsylvania Lottery Bureau to ensure that your retail location is ADA-compliant)

You will also need to purchase a Pennsylvania lottery surety bond.

Why Is a Lottery Bond Required?

Chapter 805.9 of the Pennsylvania Code states that “The Bureau may require a surety bond from any licensed agent in such amount as it may be determined consistent with its conclusion of the financial stability of such agent, so as to avoid any monetary loss to this Commonwealth because of the activities of an agent in the sale of lottery tickets.” 

In plain English, this means that the Bureau can require some (not necessarily all) applicants for a lottery agent license to furnish a surety bond, as a guarantee they will comply with Bureau regulations. The bond ensures funds will be available to compensate any party that experiences a financial loss because of a lottery agent’s unlawful or unethical actions, such as failure to remit the proceeds of lottery sales to the Commonwealth.

How Does a Lottery Bond Work?

The Lottery Bureau is the “obligee” requiring the bond, the lottery agent is called the “principal,” and the company guaranteeing the bond is the “surety.” The obligee establishes the required bond amount on a case-by-case basis, depending on the principal’s financial stability and resources.

The terms of the surety bond agreement legally obligate the principal to pay all valid claims against the bond for damages resulting from the principal’s Code violation(s). But, as the bond’s guarantor, the surety will pay a legitimate claim right away and then receive reimbursement by the principle. If necessary, the surety will sue the principal to recover the claim amount paid on the principal’s behalf.

What Does a Lottery Bond Cost? 

While the required bond amount is set by the obligee, the premium rate is determined by the surety through an underwriting process. The main underwriting concern is the possibility of the surety not reimbursing the principal. That risk is measured by the principal’s financial strength and personal credit score. 

A creditworthy bond applicant presents little risk to the surety and receives 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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Our surety bond professionals will get you the lottery bond in Pennsylvania you need at a competitive rate.