Ohio Lottery Sales Retailer Bond: A Comprehensive Guide
December 7, 2021
This guide provides information for insurance agents to help their customers obtain an Ohio Lottery Sales Retailer Bond
At a Glance:
- Average Cost: Between 1.5% to 20% of the bond amount per year based on the applicant’s credit
- Bond Amount: Minimum of $15,000 (more on this later)
- Who Needs it: All lottery retailers operating in Ohio
- Purpose: To ensure the public will receive compensation if the retailer fails to remit all funds owed to the lottery commission
- Who Regulates Lottery Retailers in Ohio: The Ohio Lottery Commission
Ohio statute 3770.05 requires all lottery retailers operating in the state to obtain a license with the lottery commission prior to selling tickets. The Ohio 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 a surety bond to be eligible for licensure.
What is the Purpose of the Ohio Lottery Sales Retailer Bond?
Ohio requires retailers to purchase a surety bond as part of the application process to obtain a lottery 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 Ohio statute 3770.05. Specifically, the bond protects the public in the event the retailer fails to remit all funds owed to the lottery commission. In short, the bond is a type of insurance that protects the public if the retailer violates licensing law.
How Can an Insurance Agent Obtain an Ohio Lottery Sales Retailer Bond?
BondExchange makes obtaining an Ohio Lottery Sales 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?
The Ohio Lottery Commission dictates that the limit on the lottery sales retailer bond must be a minimum of $15,000. The commission has the authority to, on a case-by-case basis, increase the bond amount based on the number of tickets the retailer sells.
Is a Credit Check Required for the Ohio Lottery Sales Retailer Bond?
Surety companies will run a credit check on the owners of the retail company to determine eligibility and pricing for the Ohio Lottery Sales 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 Ohio Lottery Sales Retailer Bond Cost?
The Ohio Lottery Sales Retailer surety bond can cost anywhere between 1.5% to 20% 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 $15,000 bond requirement.
$15,000 Lottery Bond Cost
|Credit Score||Bond Cost (1 year)|
|650 – 799||$300|
|625 – 649||$750|
|600 – 624||$1,500|
|550 – 599||$3,000|
*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?
All applicants for the Ohio Lottery Sales Retailer License are required to purchase a surety bond prior to receiving their license. However, retailers who sell KENO tickets and provide on-site consumption of alcohol may choose to submit a refundable deposit instead of a surety bond. The deposit must be a minimum of $500 and will increase in increments of $250 to determine how much liability the retailer may incur weekly.
How do Retailers Apply for a Lottery License in Ohio?
Lottery retailers in Ohio must navigate several steps when applying for a retail license. Below are the general guidelines, but applicants should refer to the licensing statutes for details on the process.
License Period – The Ohio Lottery Sales Retailer License is valid for one year from the date of issuance and must be renewed before the expiration date
Step 1 – Complete the Application
All Ohio Lottery Sales Retailer License applications should be completed online here. Retailers must complete the application in its entirety, and pay a $25 application fee
Step 2 – Meet with the Lottery Commission
After the retailer submits their application, they must meet with a member of the Ohio Lottery Commission to go over which equipment is required, whether the retailer qualifies for the bond or deposit program, and answer any questions the retailer may have. The lottery commission will reach out to the retailer to schedule the meeting.
Step 3 – Purchase a Surety Bond
Retailers who do not sell KENO tickets and do not allow on-site consumption of alcohol must purchase and maintain a surety bond with a minimum limit of $15,000
How Do Ohio Retailers Renew Their License?
Retailers can renew their licenses online here. The Ohio Lottery Sales Retailer License is valid for one year from the date of issuance and must be renewed before the expiration date.
What Are the Insurance Requirements for Ohio Lottery Retailers?
Ohio does not require retailers to obtain any form of liability insurance as a prerequisite to obtaining a lottery license. Retailers who do not sell KENO tickets and do not allow on-site consumption of alcohol must purchase and maintain a surety bond with a minimum limit of $15,000.
How Do Ohio Lottery Retailers File Their Bond?
Retailers should submit their completed bond form, including the power of attorney, electronically here. The Ohio Lottery Sales 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 entity/individual(s) buying the bond
- Surety company’s name and state of incorporation
- Bond amount
- Bond term
- Date the bond is signed
What Can Ohio Lottery Retailers Do to Avoid Claims Against Their Bond?
To avoid claims against their bond, lottery retailers in Ohio must ensure that they remit all funds owed to the lottery commission.
What Other Insurance Products Can Agents Offer Lottery Retailers in Ohio?
Ohio 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 Ohio Lottery Retailer Customers?
Ohio 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.