Lottery Bond
The last thing most people think of when they play the lottery is where their money goes or how the government ensures that the store selling the tickets abides by the law. Nevertheless it's an important consideration for states with lotteries, which is why most states require stores and other facilities that sell lottery tickets to be bonded.
Like many other surety bonds, the lottery bond ensures proper and ethical money handling. Most surety bonds address issues of finances in one way or another.
- Construction bonds are taken out to make sure that contractors are paying subcontractors.
- Janitorial bonds protect clients against theft on the part of a janitorial company's employees.
- Seller of travel bonds protect airlines, hotels and rental car companies from unscrupulous travel agents who might keep their clients' money rather than forward it to the appropriate company.
Protection
State laws require the lottery bond because they protect the state if the lottery seller mishandles lottery funds, misappropriates lottery funds, or tampers with lottery equipment in any way.
While the bond protects the state against theft or misappropriation of funds, it also helps protect consumers by ensuring that the business upholds ethical behavior and standards when dealing with funds. Lottery bonds require lottery ticket sellers to be honest when dealing with money. They also ensure that lotteries remain a safe, fair and fun activity for all consumers.
Getting the bond
Sellers must purchase a lottery bond to receiving approval to sell tickets. Bonds may be purchased from companies that specialize in selling various types of surety bonds. As with any surety bond purchase, the seller will be subject to a credit check and financial examination to ensure that he or she can cover the bond's full face value if necessary.
Consequences
If, during the course of selling lottery tickets, the seller misappropriates any monies going to the lottery or tampers with the machinery associated with the lottery, a claim can be filed on the bond. If the claim is found to be valid, the seller will be required to pay restitution up to the full face value of the bond. This amount is generally between $5,000 and $15,000 and thus is meant to be a deterrent to theft.
