Iowa Lottery Agent Bond

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Iowa Lottery Agent Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain an Iowa Lottery Agent Bond

At a Glance:

  • Lowest Cost: 1.5% of the bond amount per year based on the applicant’s credit
  • Bond Amount: Determined on a case by case basis (more on this later)
  • Who Needs it: Iowa lottery retailers who do not meet the financial responsibility requirements set by the Iowa Lottery Authority (ILA)
  • Purpose: To ensure the public will receive compensation if the retail violates licensing law
  • Who Regulates Lottery Retailers in Iowa: The Iowa Lottery Authority
Iowa Lottery Agent Bond Form
Iowa Lottery Agent Bond Form


Iowa statute 99G.26 grants the ILA the authority to require retailers to purchase a surety bond prior to receiving a lottery license. The Iowa legislature enacted the bonding requirement to provide financial protection to the public if the retailer violates licensing law. The ILA has the sole authority to determine whether or not a retailer must purchase a bond. Additionally, the bond amount is determined on a case-by-case basis.

What is the Purpose of the Iowa Lottery Agent Bond?

Iowa requires certain lottery retailers to be bonded prior to obtaining a retailer license. The bond ensures that the public will receive compensation for financial harm if the retailer fails to comply with the regulations set forth in Iowa statutes 99G.1-42. Specifically, the bond protects the public in the event the retailer engages in acts of fraud or fails to remit all funds owed to the ILA. In short, the bond is a type of insurance that protects the public if the lottery retailer breaks licensing laws.

How Can an Insurance Agent Obtain an Iowa Lottery Agent Bond?

BondExchange makes obtaining an Iowa Lottery Agent surety bond easy. Simply log in to your account and use our keyword search to find the “lottery” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

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How is the Bond Amount Determined?

Iowa statute 99G.26 grants the ILA the authority to set the bond amount on a case-by-case basis. There is no minimum or maximum amount specified in the statute, but the ILA will seek to set the bond limit in an amount that provides them with the necessary financial protection if the retailer engages in any acts of fraud or fails to remit funds owed. If your customer does need to purchase a bond, the ILA will specify the required bond amount after they submit their license application.

Is a Credit Check Required for the Iowa Lottery Agent Bond?

Surety companies will run a credit check on the owners of the retail company to determine eligibility and pricing for the Iowa Lottery Agent bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners with poor credit will likely be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.

How Much Does the Iowa Lottery Agent Bond Cost?

The Iowa Lottery Agent surety bond can cost anywhere between 1.5% to 5% of the bond amount per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on a $10,000 bond requirement.

$10,000 Lottery Agent Bond Cost

Credit Score Bond Cost (1 year) Bond Cost (1 month)
800+ $150 $15
650 – 799 $200 $20
600 – 649 $500 $50

*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.

Who is Required to Purchase a Bond?

The ILA will determine whether a retailer needs to purchase a bond after reviewing their license application. The ILA will examine factors such as the retailer’s credit history, criminal record, and business infractions they have committed when determining whether or not the retailer needs a bond.

Iowa Lottery Agent Bond

BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.

How do Retailers Apply for a Lottery License in Iowa?

Lottery retailers in Iowa must navigate several steps to secure their licenses. Below are the general guidelines, but applicants should refer to the ILA’s retailer licensing page for details on the process.

License Period – The Iowa Lottery Retailer License does not expire and will remain in effect until it is either canceled, suspended, or terminated by the ILA

Step 1 – Complete the Application

All Iowa Lottery Retailer License applications can be completed online here. To process of registering a new business and creating an account involves multiple steps, so make sure you advise your customers to follow all instructions found here.

Step 2 – Purchase a Surety Bond

After the retailer submits their application, the ILA will inform them whether or not they need to purchase a surety bond. Retailers who are required to purchase a bond will be informed of the required bond amount once the ILA finishes processing their application.

Do Iowa Lottery Need to Renew Renew Their License?

No, because the Iowa Lottery Retailer License does not expire and will remain in effect until it is either canceled, suspended, or terminated by the ILA.

What Are the Insurance Requirements for the Iowa Lottery Retailer License?

Iowa does not require retailers to obtain any form of liability insurance as a prerequisite to obtaining a lottery license. Retailers who do not meet the required financial responsibility requirements may need to purchase a surety bond in an amount set by the ILA.

How Do Iowa Lottery Retailers File Their Bond?

If the ILA determines that your customer must purchase a bond, then they will inform the retailer how to file it. The Iowa Lottery Retailer surety bond requires signatures from both the surety company that issues the bond and a representative from the retail organization. The surety company should include the following information on the bond form:

  • Legal name of entity/individual(s) buying the bond
  • Surety company’s name and state of incorporation
  • Bond amount
  • Purpose of the bond (lottery license)
  • Date the bond goes into effect
  • Date the bond is signed

What Can Iowa Lottery Retailers Do to Avoid Claims Against Their Bond?

To avoid claims against their bond, lottery retailers in Iowa must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:

  • Do not engage in any acts of fraud
  • Remit all funds owed to the ILA

What Other Insurance Products Can Agents Offer Lottery Retailers in Iowa?

Iowa does not require retailers to obtain any form of liability insurance as a prerequisite to obtaining a lottery license. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Iowa Lottery Retailer Customers?

Iowa conveniently provides a public database to search for active lottery retailers in the state The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

Iowa Lottery Agent Bond