Florida Lottery Retailer Bond: A Comprehensive Guide

November 3, 2021

This guide provides information for insurance agents to help their customers obtain a Florida Lottery 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: Determined on a case by case basis (more on this later)
• Who Needs it: Florida lottery retailers who do not meet the financial responsibility requirements set by the Florida Lottery Commission (FLC)
• Purpose: To ensure the public will receive compensation if the retailer fails to remit all funds owed to the FLC
• Who Regulates Lottery Retailers in Florida: The Florida Lottery Commission

Background

Florida statute 24.112 grants the FLC the authority to require retailers to purchase a surety bond prior to receiving a lottery license. The Florida legislature enacted the bonding requirement to ensure that the FLC receives all funds owed to them by retailers. The bond amount is determined on a case-by-case basis but may not exceed twice the retailer’s average estimated lottery ticket sales during a remittance period.

What is the Purpose of the Florida Lottery Retailer Bond?

Florida requires certain lottery retailers to be bonded prior to obtaining a retailer license. The bond ensures that the FLC will receive all funds owed to them by retailers, even if the retailer doesn’t have the ability to pay. The Florida Lottery Retailer bond does not protect the retailer who purchases it, but rather the FLC as well as the general public.

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

BondExchange makes obtaining a Florida 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?

Florida statute 24.112 grants the FLC the authority to determine the required bond amount for each individual retailer on a case by case basis. The FLC will examine the retailer’s application, and then set a bond amount based on the retailer’s business financial standing and background check results. The FLC will ensure that the bond’s limit covers all potential losses the public may suffer. However, the bond may not be in an amount greater than twice the retailer’s average estimated lottery ticket sales during a remittance period.

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

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

The Florida Lottery 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 $10,000 bond requirement.

$10,000 Lottery Retailer Bond Cost

Who is Required to Purchase a Bond?

The FLC will determine whether a retailer needs to purchase a bond after reviewing their license application and conducting a background check. The FLC will require the retailer to purchase a bond as a prerequisite to licensure if they determine that the retailer is at a high risk of not paying all funds owed. The bond will be in an amount large enough to ensure the FLC does not suffer any losses if the retailer is unable to pay all funds owed, but may not be greater than twice the retailer’s average estimated lottery ticket sales during a remittance period.

How do Retailers Apply for a Lottery License in Florida

Lottery retailers in Florida 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 – All Florida Lottery Retailer Licenses are valid for four years and must be renewed before their expiration date

Step 1 – Request a Visit From a Lottery Sales Representative

The first step retailers must take towards obtaining their lottery license is to contact their local lottery office and request a visit from a lottery sales representative. The sales representative will walk the retailer through the application process, discuss their sales goals, and answer any questions the retailer may have. Additionally, the sales representative will examine the retailer’s business location to ensure that it complies with all Americans with Disabilities Act requirements.

Step 2 – Complete the Application

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

Florida Lottery
250 Marriott Drive
Tallahassee, FL 32399-6573

Retailers must have their application notarized, and pay a $100 (plus $25 per additional location) application fee.

Step 3 – Purchase a Surety Bond

After the retailer has submitted their application, the FLC will conduct a background check on the retailer to determine whether or not the retailer must purchase a bond. If the retailer is required to purchase a bond, then the FLC will determine an appropriate bond amount. However, the bond amount may not exceed twice the retailer’s average estimated lottery ticket sales during a remittance period.

How Do Florida Lottery Retailers Renew Their License?

Prior to their licenses’ expiration dates, the FLC will contact retailers and present them with instructions on how to renew their licenses. Retailers should mail their completed renewal application to the following address:

Florida Lottery
250 Marriott Drive
Tallahassee, FL 32399-6573

All Florida Lottery Retailer Licenses are valid for four years and must be renewed before their expiration date.

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

Florida does not require retailers to obtain any form of liability insurance as a prerequisite to obtaining a lottery license. Retailers with poor credit and business financials may need to purchase a surety bond in an amount set by the FLC but does not exceed twice the retailer’s average estimated lottery ticket sales during a remittance period.

How Do Florida Lottery Retailers File Their Bond?

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

Florida Lottery
250 Marriott Drive
Tallahassee, FL 32399-6573

The Florida 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, email address, and phone number
• Bond amount
• Date the bond is signed
• Date the bond goes into effect

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

To avoid claims against their bond, lottery retailers in Florida must ensure that they pay all funds owed to the Florida Lottery Commission.

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

Florida 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 Florida Retailer Customers?

Florida 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.