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Lottery Bond Claims Guide



Lottery Bond

In about 20 states to be eligible for a license as a lottery retailer, agent, and/or vendor, a surety bond is often required of the business. The most common surety bond requirement being the Lottery Retailer Bond (occasionally a Lottery Agent or Vendor Bond is needed). 

Such surety bonds financially ensure that the individual will follow applicable license regulations—this includes making payments to winners, filing annual sales reports, sending necessary portions of lottery ticket sales to the Commission, and/or fulfilling all contractual obligations. Failure to uphold such rules can lead to a bond claim.

As your surety provider, Jet Insurance Company will fulfill its legal obligation to the state Lottery Commission (obligee) by paying what is due following a valid bond claim. However, Jet also has an obligation to protect our customers (you, the principal) from false allegations and claims. Let's go over the best ways to avoid a claim and what to do should something of the sort ever occur.

How to Avoid a Lottery Slip-Up

Licensed lottery retailers, agents, and vendors can prevent a bond claim from occurring in most, if not all, participating states by avoiding the following license violations:

Lottery Bond Claim Process

Who Can File a Claim on a Lottery Retailer, Agent, or Vendor Bond?

Generally, anyone that has been injured by the principal may file a claim on the surety bond. In some instances, the State’s Lottery Commission is the only party who may take action on the bond.

When Can a Claim Be Made Upon the Bond?

Only during the bond's active period. However, the liability window does extend due to mandated cancellation periods which range anywhere from 30 to 90 days (whatever is stated on the bond form). Once the bond term has officially ended, no further claims may be filed against the bond.

Are There Limits to Claim Filings?

There are! As stated above, a claim may only be filed on the surety bond while it is active. In addition, claims cannot exceed the bond limit that is set by the obligee (the limit is represented by the dollar amount of the bond). Most Lottery Bonds require a custom limit that is either determined by the Lottery Commission or based on the licensee’s estimated lottery ticket sales. This info can be found on the bond form itself or in the state statutes.

What Would a Lottery Retailer Bond Claim Look Like?

Let's use an example:

Jack, a lottery retailer in North Carolina, is currently holding a $10,000 Lottery Retailer Bond. Jack has been licensed with the state’s Lottery Commission for a few years now, so he knows what is expected of him. Unfortunately, Jack begins slacking a bit and fails to submit his weekly payments to the Commission for lottery tickets sold. This occurs for two weeks in a row within a six-month period. 


The North Carolina Lottery Commission contacts Jack about the late and/or missing payments. The notice includes an option to resolve the matter by promptly paying what is due in full. Jack is low on funds at the moment and is unable to fulfill the Commission’s request.


Jack’s overdue balance remains unpaid and the Commission hears no word from him on resolving that matter. Because of this, a bond claim is pursued and notice of such is sent to Jack’s surety provider (Jet).

Once Jet receives notice of a claim on the Lottery Retailer Bond, contact is immediately made with Jack and further information on the alleged license violation is requested. Jet will review these details and conduct a thorough investigation into the validity of the claim.

Due to the well-documented proof of nonpayment that was provided by the Commission, Jet is forced to accept the claim as justified. Funds from Jack’s Lottery Retailer Bond are then sent to the Commission to cover what is owed (claim payouts will never exceed the amount of the bond). 


After the claim payout, Jack is required to reimburse Jet for the amount that was paid to the Commission on behalf of his repeated license violations. This is a normal practice of all surety providers and is required to complete the indemnification process. 

Failure on Jack’s part to fulfill this obligation will result in future difficulties securing a new surety bond, which he’ll need if he plans on continuing to sell lottery tickets. 

Laws tend to vary in each state, so Jet has provided details regarding past research completed on Lottery Bonds within the U.S. and links to legislative documents. Take a look at the chart below. 

Bond InformationLegislative Documents
Florida Lottery Retailer and VendorFlorida Statutes
North Carolina LotteryNorth Carolina Statutes
Ohio Lottery Sales RetailerOhio Revised Code