How to Become a Lottery Retailer

by Christopher Raines; Updated September 26, 2017
Scratch Off Lotto Ticket

As a lottery retailer, you can fill your coffers with the jackpot dreams of your customers. Ticket sales earn you commissions based upon the type of game, bonuses for winning tickets and increased customers for your other goods and services. The Florida Lottery, for example, says ticket retailers see an 11 percent increase in sales and traffic, and ticket purchasers spend on average $10.35 in stores versus $6.29 for non-lottery customers. To become a licensed lottery retailer, you need to meet your state's requirements to show that you and your store is suitable for the business.

Not Mainly Lottery Tickets

In some states, you must already have an existing, non-lottery business; in others, a new business is allowed to become a lottery retailer. Ohio is one state that allows new businesses to sell lottery tickets. In all states, your business cannot be dedicated primarily to selling lottery tickets. Lottery officials examine factors such as how long you've been in business, the amount of sales that come from lottery tickets, the type of business you run and your total sales. Typically, you're a good candidate for lottery retail if you run a convenience store, grocery store, gas station, liquor store or tobacco shop.

Good Place to Sell

Once you apply, a lottery official determines whether your store is a suitable outlet to sell tickets. Your store is judged based on factors such as your establishment's security, whether the vicinity of your store already has enough retailers and whether disabled patrons can access the lottery products. You cannot begin selling tickets until your store complies with the Americans with Disabilities Act and meets standards for handicapped accessibility, which may vary by state. Ask your state's lottery representative for consultation on ways to sell to those with disabilities, handicap parking signs or other assistance in complying with the Americans with Disabilities Act.

Criminal and Financial Past

Convictions for felonies and illegal gambling activities disqualify you from a lottery license, though not necessarily forever in all places. For example, the District of Columbia looks back five years prior to your application date. In Texas, the disqualification lasts for 10 years after you finish your sentence or probation. You can plan on your state's lottery commission checking your credit history and financial background, and, depending on your state, you must pay off any delinquent taxes before being issued a license.

Bond for Performance

Depending on your state, you may not have to pay for tickets until after you sell them. So that the state gets its money in case you don't pay when you sell, you have to post a bond. The amount varies by state and depends on anticipated sales. For example, Ohio generally requires lottery retailers to carry a $15,000 bond, though some retailers may need a higher bond because of their past sales. You can buy a bond from an insurance agent who sells lottery bonds or bonds that guarantee your payment of the lottery tickets. The cost depends on where you operate and your financial or credit history; $10 to $15 for every $1,000 of insurance coverage is typical.

Light Investment

You don't need to invest in equipment, since the terminals are provided to you by the state. Your upfront costs consist mainly of the application fee, which varies by state. Texas charges $125 for the first location at which you sell and $50 for each additional place; Michigan's application fee is $150, while Louisiana's is $35. Generally, your state's commission or agency furnishes the advertising in your store and in the media free of charge to you.

Types of Games

Depending on your state, you can limit, or your lottery official may limit, what games you offer. In some states, you're required to carry a minimum number of games. Also, the standards you face can differ based on the type of tickets. For instance, in New York you need at least 2,500 square feet of retail space to offer "Quick Draw" tickets unless you sell alcohol on the premises.

About the Author

Christopher Raines enjoys sharing his knowledge of business, financial matters and the law. He earned his business administration and law degrees from the University of North Carolina at Chapel Hill. As a lawyer since August 1996, Raines has handled cases involving business, consumer and other areas of the law.

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