Washington Lottery Retailer Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a Washington Lottery Retailer Bond
At a Glance:
- Lowest Cost: 1.5% of the bond amount per year based on the applicant’s credit
- Bond Amount: $3,500
- Who Needs it: All Washington lottery retailers who do not meet the lottery’s creditworthiness requirements
- Purpose: To ensure the public will receive compensation if the retailer fails to remit all funds owed to the lottery
- Who Regulates Video Lottery Retailers in Washington: The Washington State Lottery (WSL)
Washington statute 315-04-010 requires all lottery retailers operating in the state to obtain a license with the WSL. The Washington 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 meet the WSL’s creditworthiness requirements must purchase and maintain a $3,500 surety bond to be eligible for licensure.
What is the Purpose of the Washington Lottery Retailer Bond?
Washington requires lottery retailers who do not meet the WSL’s creditworthiness requirements 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 Washington statutes 315-04. Specifically, the bond protects the public in the event the retailer fails to remit all funds owed to the WSL. 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 a Washington Lottery Retailer Bond?
BondExchange makes obtaining a Washington 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? 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?
Washington statute 315-04-095 dictates that the bond amount must be at least $3,500. However, the statute also grants the WSL the authority to increase the bond amount on a case-by-case basis based on a specific retailer’s creditworthiness.
Is a Credit Check Required for the Washington Lottery Retailer Bond?
Surety companies will run a credit check on the owners of the retail company to determine eligibility and pricing for the Washington 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 Washington Lottery Retailer Bond Cost?
The Washington 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 a $3,500 bond requirement.
$3,500 Lottery Bond Cost
|Credit Score||Bond Cost (1 year)||Bond Cost (1 month)|
|600 – 649||$175||$18|
*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.
Lottery retailer bonds with a limit higher than $3,500 may have more stringent underwriting requirements.
Who is Required to Purchase a Bond?
Washington Statute 315-04-095 grants the WSL the authority to require retailers with marginal credit to purchase a surety bond prior to receiving their lottery license. After the retailer submits their application, the WSL will run a credit check on the retailer to determine whether or not they must purchase a 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 Lottery Retailers Apply for a License in Washington?
Lottery retailers in Washington must navigate several steps to secure their licenses. Below are the general guidelines, but applicants should refer to the Department of Revenue’s Licensing Page for details on the process.
License Period – All Washington Retailer Lottery Licenses do not expire unless revoked by the WSL or the retailer. However, retailers will need to provide periodic updates to the WSL on their license information
Step 1 – Obtain a Business License
Before obtaining their lottery license, retailers must first obtain a business license through the Washington Department of Revenue. To obtain a license, retailers must complete the required application, and submit it electronically here. Retailers who already have a business license but need to add a lottery endorsement should complete their application here.
Step 2 – Complete the Application
Once the retailer submits their application for a business license they then must complete the application for the retailer license and mail it to the following address:
PO Box 43031
Olympia, WA 98504-3031
The application consists of the following forms:
Retailers must pay the following fees to obtain a retailer license
- $25 application fee
- $200 equipment installation fee
Step 3 – Purchase a Surety Bond
After the retailer has submitted their application the WSL will run a credit check on the retailer to assess their check history. Retailers who do not meet the WSL’s creditworthiness requirements may need to purchase a surety bond in an amount that is not less than $3,500.
Do Washington Lottery Retailers Renew Their License?
No, all Washington Retailer Lottery Licenses do not expire unless revoked by the WSL or the retailer. However, retailers will need to provide periodic updates to the WSL on their license information.
What Are the Insurance Requirements for Washington Lottery Retailers?
Washington does not require lottery retailers to obtain any form of liability insurance as a prerequisite to obtaining a retailer license. However, retailers may need to obtain insurance prior to obtaining a business license. Retailers who do not meet the WSL’s creditworthiness requirements may need to purchase a surety bond in an amount that is not less than $3,500.
How Do Washington Lottery Retailers File Their Bond?
Retailers should mail or their completed bond form, including the power of attorney, to the following address:
PO Box 43031
Olympia, WA 98504-3031
The Washington 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 entity/individual(s) buying the bond
- Surety company’s name
- Date the bond is signed
What Can Washington Lottery Retailers Do to Avoid Claims Against Their Bond?
To avoid claims against their bond, lottery retailers in Washington must ensure that they remit all funds owed to the WSL.
What Other Insurance Products Can Agents Offer Lottery Retailers in Washington?
Washington 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 Washington Lottery Retailer Customers?
Washington conveniently provides a public list to search for active lottery retailers in the state. The list can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.