Missouri Lottery Retailer Bond: A Comprehensive Guide
December 3, 2021
This guide provides information for insurance agents to help their customers obtain a Missouri Lottery Retailer Bond
At a Glance:
- Average Cost: Between 1.5% to 5% of the bond amount per year based on the applicant’s credit
- Bond Amount: $30,000 per Scratcher’s/online/Club Games terminal location
- Who Needs it: All Missouri lottery retailers who do not qualify for the Missouri Lottery Commission’s (MLC) self-bonding program
- Purpose: To ensure the public will receive compensation if the retailer fails to remit all funds owed to the MML
- Who Regulates Lottery Retailers in Missouri: The Missouri Lottery Commission
Missouri statute 313.255 requires all lottery retailers operating in the state to obtain a license with the MLC. The Missouri 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 who do not qualify for the MLC’s self-bonding program must purchase and maintain a $30,000 surety bond (per lottery terminal location) to be eligible for licensure.
What is the Purpose of the Missouri Lottery Retailer Bond?
The MLC requires retailers who are not approved for the self-bonding program 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 Missouri statutes Chapter 313. 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.
How Can an Insurance Agent Obtain a Missouri Lottery Retailer Bond?
BondExchange makes obtaining a Missouri 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?
If the retailer is not approved for the self-bonding program, the MLC dictates the bond amount to be $30,000 per Scratcher’s/online/Club Games terminal location.
Is a Credit Check Required for the Missouri Lottery Retailer Bond?
Surety companies will run a credit check on the owners of the retail company to determine eligibility and pricing for the Missouri 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 Missouri Lottery Retailer Bond Cost?
The Missouri Lottery Retailer 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 the $30,000 bond requirement.
$30,000 Lottery Retailer Bond Cost
|Credit Score||Bond Cost (1 year)|
|650 – 799||$600|
|600 – 649||$1,500|
*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 lottery retailers to be bonded, however, retailers who qualify for the MLC’s self-bonding program do not need to purchase a bond through a surety company. Instead, qualified retailers will have $50 swept from their bank account via EFT and will have their bond requirement satisfied. Retailers who do not qualify for the MLC’s self-bonding program will need to purchase a $30,000 surety bond for each lottery terminal location. When determining if a retailer qualifies for the self-bonding program, the MLC will examine the retailer’s financial responsibility.
How do Retailers Apply for a Lottery License in Missouri?
Lottery retailers in Missouri must navigate several steps to secure their licenses. Below are the general guidelines, but applicants should refer to the application instructions for details on the process.
License Period – The Missouri Lottery Retailer License does not expire unless suspended, canceled, or revoked. However, retailers will need to renew their bonds on a yearly basis
Step 1 – Contact the Missouri Lottery Commission
Retailers should contact their nearest MLC district sales office prior to submitting a license application. The MLC will walk the retailer through the application process, and help the retailer determine whether or not they are eligible for a lottery license.
Step 2 – Complete the Application
All Missouri Lottery Retailer License applications should be mailed to the following address:
PO Box 1603
Jefferson City MO 65102-1603
Retailers must complete the application in its entirety and pay a $75 application fee.
Step 3 – Purchase a Surety Bond
Once the retailer has submitted their license application, the MCL will review their application to determine if they qualify for the self-bonding program. Retailers who do qualify for the program will have $50 swept from their bank account via an EFT. Retailers who do not qualify for the self-bonding program must purchase and maintain a $30,000 surety bond per Scratcher’s/online/Club Games terminal location.
Do Missouri Lottery Retailers Need to Renew Their License?
No, The Missouri Lottery Retailer License does not expire unless suspended, canceled, or revoked. However, retailers will need to renew their bonds on a yearly basis. Additionally, retailers will need to pay a $50 annual renewal fee.
What Are the Insurance Requirements for the Missouri Lottery Retailer License?
Missouri does not require retailers to obtain any form of liability insurance as a prerequisite to obtaining a lottery license. Retailers who do not qualify for the MLC’s self-bonding program must purchase and maintain a $30,000 surety bond per Scratcher’s/online/Club Games terminal location.
How Do Missouri Lottery Retailers File Their Bond?
Retailers should mail their completed bond form, including the power of attorney, to the following address:
PO Box 1603
Jefferson City MO 65102-1603
The Missouri 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, address, and phone number
- Bond amount
- Date the bond is signed
What Can Missouri Lottery Retailers Do to Avoid Claims Against Their Bond?
To avoid claims against their bond, lottery retailers in Missouri must ensure that they remit all funds owed to the MLC.
What Other Insurance Products Can Agents Offer Lottery Retailers in Missouri?
Missouri 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 Missouri Lottery Retailer Customers?
Missouri 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