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Mississippi Lottery Retailer Bond: A Comprehensive Guide

December 6, 2021

Mississippi Lottery Retailer Bond

This guide provides information for insurance agents to help their customers obtain a Mississippi Lottery Retailer Bond

At a Glance:

  • Average Cost: Between 1% to 1.5% of the bond amount per year based on the applicant’s credit
  • Bond Amount: $8,000 per retail location
  • Who Needs it: All lottery retailers operating in Mississippi
  • Purpose: To ensure the public will receive compensation if the retailer fails to remit all funds owed to the Mississippi Lottery Corporation (MLC)
  • Who Regulates Lottery Retailers in Mississippi: The Mississippi Lottery Corporation

Background

Mississippi Senate Bill 2001 requires all lottery retailers operating in the state to obtain a license with the MLC. The Mississippi legislature enacted the licensing laws and regulations to ensure that retailers engage in ethical business practices. To provide financial security for the enforcement of the licensing law, retailers must purchase and maintain an $8,000 surety bond (per retail location) to be eligible for licensure.

What is the Purpose of the Mississippi Lottery Retailer Bond?

The MLC requires retailers to purchase a surety bond as part of the application process to obtain a business 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 Mississippi Senate Bill 2001. Specifically, the bond protects the public in the event the retailer fails to remit all funds owed to the MLC. In short, the bond is a type of insurance that protects the public if the retailer breaks licensing laws.

Mississippi Lottery Retailer Surety Bond Form

Mississippi Lottery Retailer Surety Bond Form

How Can an Insurance Agent Obtain a Mississippi Lottery Retailer Bond?

BondExchange makes obtaining a Mississippi Lottery Retailer 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? Enroll 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.

How is the Bond Amount Determined?

Mississippi Senate Bill 2001 dictates that the bond amount may not exceed twice the retailer’s average weekly ticket sales. However, since first-time license applicants do not have any sales. the MLC requires new retailers to purchase an $8,000 surety bond per retail location. Once the MLC has gathered the appropriate sales data, they will adjust the retailer’s bond amount to equal twice their average weekly ticket sales.

Is a Credit Check Required for the Mississippi Lottery Retailer Bond?

Surety companies will run a credit check on the owners of the retail company to determine eligibility and pricing for the Mississippi Lottery Retailer 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 Mississippi Lottery Retailer Bond Cost?

The Mississippi Lottery Retailer surety bond can cost anywhere between 1% to 1.5% 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 an $8,000 bond requirement.

$8,000 Lottery Retailer Bond Cost

Credit Score Bond Cost (1 year)
600+ $100
550 – 599 $120

*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 MLC requires all Mississippi lottery retailers to purchase and maintain a surety bond, regardless of their financial responsibility.

How do Retailers Apply for a Lottery License in Mississippi?

Lottery retailers in Mississippi must navigate several steps to secure their licenses. Below are the general guidelines, but applicants should refer to the application packet for details on the process.

License Period – The Mississippi Lottery Retailer License expires on December 31 of each year and must be renewed before the expiration date

Step 1 – Purchase a Surety Bond

First-time license applicants must purchase and maintain an $8,000 surety bond per retail location

Step 2 – Open a Trust Account

Retailers must open a bank account designated as “In Trust for the MLC” and may be used solely for the deposit of lottery proceeds

Step 3 – Complete the Application

All Mississippi Lottery Retailer License applications should be mailed to the following address:

Mississippi Lottery Corporation
Attention: Retailer Contracts
Department P.O. Box
321433 Flowood, MS 39232

Retailers must complete the application in its entirety and must undergo a criminal background check. Additionally, retailers must ensure that they do not owe any state taxes and are current in filing their state tax returns. Retailers are required to pay an $80 application fee, plus an extra $15 per additional retail location.

Step 4 – Pass Inspection

After the retailer submits their license application, the MLC will conduct an on-site assessment of the retailer’s business location to ensure that the retailer is not solely selling lottery tickets, tickets are not being sold from a mobile or residential location, and the retailer is not operating an internet-based interactive lottery game

How Do Mississippi Lottery Retailers Renew Their License?

Retailers should mail their completed renewal application, including all applicable fees, to the following address:

Mississippi Lottery Corporation
Attention: Retailer Contracts
Department P.O. Box
321433 Flowood, MS 39232

The Mississippi Lottery Retailer License expires on December 31 of each year and must be renewed before the expiration date.

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

Mississippi does not require retailers to obtain any form of liability insurance as a prerequisite to obtaining a lottery license. First-time license applicants must purchase an $8,000 surety bond per retail location. Once the MLC has gathered the appropriate sales data, they will adjust the retailer’s bond amount to equal twice their average weekly ticket sales.

How Do Mississippi Lottery Retailers File Their Bond?

Retailers should mail their completed bond form, including the power of attorney, to the following address:

Mississippi Lottery Corporation
Attention: Retailer Contracts
Department P.O. Box
321433 Flowood, MS 39232

The Mississippi 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 and address of entity/individual(s) buying the bond
  • Surety company’s name and state of incorporation
  • Bond amount
  • Date the bond goes into effect
  • Date the bond is signed

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

To avoid claims against their bond, lottery retailers in Mississippi must ensure that they remit all funds owed to the MLC.

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

Mississippi does not require lottery retailers to obtain any form of liability insurance as a prerequisite to obtaining a retailer 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 Mississippi Lottery Retailer Customers?

Mississippi 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.

2021-12-28T15:17:03-05:00