What Does The Tennessee Lottery Pay For & How Much Does It Bring In?
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The Tennessee Conservative [By Adelia Kirchner] –
Through the Tennessee Education Lottery, players have won more than $19.2 billion in prizes and Lottery retailers have received over $1.8 billion in retailer commissions, but where does the rest of the money go?
Headquartered in Nashville, with District Offices in Knoxville, Chattanooga and Memphis, the Lottery has raised over $7 billion and awarded more than 2 million scholarships and grants to Tennessee students since its 2004 debut.
According to the ‘Where the Money Goes’ section of the Lottery’s website, “Lottery-funded programs include a variety of scholarships, grants, after-school programs and an energy-efficient schools initiative.”
Specific programs that have received either one-time or continuous funding via the Lottery, include the following:
• Tennessee HOPE Scholarship (Traditional and Non-Traditional)
• Tennessee HOPE Access Grant
• General Assembly Merit Scholarship
• Tennessee HOPE Foster Child Tuition Grant
• Wilder-Naifeh Technical Skills Grant
• Tennessee Promise Scholarship and Mentoring Program
• After School Programs (LEAPS)
• Middle College Scholarship Program
• Energy Efficient Schools Initiative (EESI)
Most Tennessee students pursuing higher education have become acquainted with these programs in one way or another.
Proper distribution of Lottery proceeds is detailed by Tenn. Code Ann. § 4-51-111, which establishes the state’s “lottery for education account” and an additional special account referred to as the “after school programs special account” which accumulates any unclaimed prize money.
In fiscal years where all financial assistance program needs are met for attendance at Tennessee’s post-secondary educational institutions “and excess is available from net lottery proceeds,” the after school account funds may be appropriated by the General Assembly for other educational purposes and projects.
One example of this use of excess funds is the Energy Efficient Schools Initiative (EESI).
The EESI was established in 2008 by the state legislature using a one-time allotment of $90 million in Tennessee Lottery funds. There were enough excess lottery funds at the time to cover this expense.
EESI states that its mission is “Improving the classroom learning environment through energy-efficient strategies.”
Since its inception the initiative has disbursed over $102.5 million in “energy efficient grants and loans” to public K-12 schools in Tennessee, $83,013,531 of which was distributed through the EESI Loan Program.
The EESI was criticized by U.S. Representative Steve Cohen (D-Memphis), who called the initiative “questionable” back in 2010 when it had only dispersed $13 million in grants and $3.8 million in loans.
Rep. Cohen was one of the key promoters of establishing the Tennessee Lottery as a way to fund the Tennessee HOPE scholarships and wanted to reclaim the remaining funds used to create the EESI.
“Those funds could be recaptured and returned to lottery scholarships, not only to secure the current lottery scholarship levels but to enhance the program and bring it nearer its intended purpose — to provide fully funded scholarships to Tennessee students,” Rep. Cohen stated at the time.
For Fiscal Year 2022 (FY22), the Tennessee Lottery brought in $1,888,093,619. Of which, $1,420,890,010 went towards expenses. There was also $378,000 in unclaimed proceeds.
Reported expenses for FY22 include $31,531,895 in non-direct expenses, $1,220,735,637 in prize expenses, $36,282,909 in vendor fees, and $132,339,569 in retailer commissions.
Tennessee Lottery retailers are paid a 6.5% commission on lottery sales made in their store. There is also a $50,000 incentive for the retailer that sells a jackpot winning Powerball or Mega Millions Drawing-Style Game Play, and a $5,000 selling bonus for a retailer who sells any other winning Drawing-Style Game Play, as long as the prize won is equal to or greater than $1 million.
The Lottery reported a total of $467,581,609 lottery for education account proceeds and a total of $18,000,000 in after school program proceeds for FY22.
Projections for fiscal years 2023-2027, showed an annual increase in lottery for education account proceeds.
About the Author: Adelia Kirchner is a Tennessee resident and reporter for the Tennessee Conservative. Currently the host of Subtle Rampage Podcast, she has also worked for the South Dakota State Legislature and interned for Senator Bill Hagerty’s Office in Nashville, Tennessee. You can reach Adelia at adelia@tennesseeconservativenews.com.
