A new report on the lottery scholarship program found online sports betting is contributing tens of millions more dollars than expected.
That analysis by the Tennessee Comptroller found online sports betting taxes raised more than $65 million for Tennessee Education Lottery Programs in fiscal year 2022-23. That’s $22 million more than projected.
The Tennessee General Assembly passed legislation in 2019 approving a percentage of online sports wagering taxes to provide additional revenue for lottery scholarships, including the HOPE Scholarship.
Those taxes raised $37 million in fiscal year 2021/2022 and then jumped 77 percent the following year.
These findings led Tennessee Comptroller Jason Mumpower to recommend more collaboration between the Tennessee State Funding Board and the Tennessee Sports Wagering Council to provide a better estimate of how much revenue online sports betting will create in the future.
“As a result of this work, I have asked the State Funding Board staff to invite the Sports Wagering Council to our annual revenue estimating meeting,” said Mumpower. “With the increasing revenues from sports wagering, it’s important to have a better understanding of how these dollars are impacting the funding available for scholarships.”
Sports betting still accounts for a small portion of lottery scholarship revenue overall. The vast majority of revenue continues to come from lottery proceeds that are estimated to eclipse $486 million this year.
The Tennessee Education Lottery funds 13 financial aid programs. The largest is the Tennessee HOPE scholarship that more than 70 thousand students receive each year.
The HOPE scholarship provides freshmen and sophomores attending a 4 year institution with $2,250 per semester ($4,500 per year) and juniors and seniors with $2,850 per semester ($5,700 per year). Students attending a 2 year institution without on-campus housing receive $1,600 per semester ($3,200 per year).
Eligible students must have either a 3.0 high school grade point average or an ACT score of 21 (or combined SAT score of at least 1060). Students who pass the High School Equivalency Test (HiSET) may also qualify with a minimum score of 15 on the exam. HOPE Scholarship awardees must also maintain minimum grade point averages.
The Comptroller found a plurality of HOPE Scholarship recipients are using the assistance to attend a University of Tennessee institution of higher learning. University of Tennessee institutions serve 32 percent of HOPE Scholarship awardees compared to just 18 percent of students using the scholarship to attend an independent four-year university.
