Tennessee Lotteries

Tennessee voters approved the creation of the state's lottery through a statewide referendum in November 2002. The Tennessee Education Lottery Implementation Law Act became law in June 2003, creating the Tennessee Education Lottery Corporation. As part of the Act, a Board of Directors was established to provide governance and set overall policy for the Lottery Corporation. On 1 July 2003, the first seven members to the Lottery's Board of Directors were appointed by Governor Bredesen and confirmed by the General Assembly. On January 20, 2004, the Lottery sold its first tickets. Currently, the Lottery offers a variety of instant-ticket and in-state and multi-state draw games. The Lottery also gives instant-ticket players a second opportunity to play and win using losing game tickets. Persons under the age of 18 are prohibited from buying tickets. Tickets may not be purchased on the internet. By law, all lottery tickets must be purchased in person at a retailer location and can only be purchased with cash.

The Lottery generates funds that benefit Tennessee public education. The principal objective of funding is to help Tennessee students attend Tennessee universities and colleges. Lottery-funded programs include 11 scholarships and grants, multiple after-school programs, and an energy-efficient schools plan. All net proceeds are transferred to the Lottery for Education account. Net proceeds are lottery ticket revenue plus ancillary monies resulting from lottery games with operating expenses deducted. By law, a minimum of 50% of ticket proceeds must be given back to players as prizes. Prizes not claimed within 90 days of the end date for instant games, and within 180 days of the draw date for online games, are forfeited as unclaimed prizes and revert to the Lottery.

The Lottery has licensed retailers located throughout Tennessee. There is a $95 application fee to help defray the cost of a background and credit check. The Lottery provides equipment, supplies and training for the retailer, free of charge, once the application is approved. There is an ongoing minimum weekly service fee of $15 to cover operational expenses. Lottery retailers are compensated at a fixed commission rate of 6.5% on all instant tickets settled and drawing-style tickets sold. They also receive a 1% bonus for cashing Cash 3 and Cash 4 ticket prizes. In addition, the Lottery will pay a bonus of $25,000 to a retailer who sells a single jackpot-winning ticket for Powerball or Mega Millions. If there are multiple winning tickets for one drawing, the $25,000 bonus is divided proportionately based on the number of winning tickets sold by each retailer. The Lottery will also pay a $5,000 bonus to retailers selling any drawing-style game ticket where the prize won is $1 million or more.

GTECH and Scientific Games International are contractors for the provision and operation of the Lottery's computerized network and gaming systems and for the manufacture, warehousing and distribution of instant ticket games, respectively. Both GTECH and SGI signed seven-year contract extensions (with more contract extension options) in 2014.

In 2021, the Tennessee Education Lottery, signed a five-year extension with Scientific Games for instant games and services.