Legal Sports Betting Could Be The Ticket To Online Lottery In Tennessee

Posted on December 8, 2019 - Last Updated on February 17, 2021

As the rollout of legal sports betting in Tennessee gets closer, there are many ramifications to consider. An example is how that activity could be a predecessor to an online lottery in the Volunteer State.

Considering the current dynamics, it wouldn’t be much of a stretch. The success of online betting in Tennessee could supply all the necessary motivation.

Online lottery is just a few steps away from reality

Tennessee already has a lottery. The Tennessee Education Lottery also already has a widely available mobile application as well.

There is one key component that would have to change, however. Currently, the application only allows Tennesseans to “prepare to play.”

For example, app users can save their “lucky numbers” to play at a retail location. They can also create play slips for certain games.

The app creates a QR code that retail employees can scan during the transaction. The important thing to note is that Tennesseans can’t complete the purchase of a lottery ticket, or cash out winnings, without visiting a retailer.

For the product to be truly mobile, the lottery needs to add those functions. Doing so is trickier than simply building out the app, however.

As with anything else in gambling, it’s political. That’s where legal sports betting could play a crucial role.

How sports betting could help the lottery go mobile

In short, sports betting could help the lottery see green. The Tennessee Lottery also regulates legal sports betting in the state, so that organization will be cognizant of how well the activity fares.

If the online wagering product becomes wildly popular, that could entice the lottery to take its other games mobile as well. It’s been proven in other markets that the more convenient gaming is, the more likely people are to play the games regularly.

The motivation could be especially strong if the lottery begins losing customers to sports betting due to the online convenience factor. The state might see going mobile as the only way to keep lottery games competitive.

While there’s no research suggesting mobile sports betting cannibalizes the lottery in other states, Tennesseans might behave differently because it’s a unique landscape. The lottery’s retailers are the only legal brick-and-mortar gambling establishments in the state.

That might be where the greatest pushback against online lottery comes from. The convenience stores and other retailers would have a legitimate beef.

Why current lottery retailers might put up a fight

While sports betting may not cannibalize the lottery, making lottery games available on the app could hurt retailers’ sales. If Tennesseans can buy lottery tickets and collect their winnings from their couches, why would they go to a store to do the same thing?

There is some legitimacy to those fears, and lottery retailers would be justified in expressing them. There are ways to satisfy both interests though.

In states with an online lottery, retailers haven’t left the program. There still seems to be enough consumer interest in physical lottery tickets, particularly scratch-off tickets, to keep the product viable.

Additionally, the lottery could run special promotions that require purchases at retail locations. Certain games could only be available at brick-and-mortar locations as well.

If done correctly, expanding the mobile app could boost overall revenue for the lottery in Tennessee while preserving the interests of retail partners. Sports betting could act as the proof of concept for that expansion.

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Derek Helling

Derek Helling is a lead writer for PlayUSA and the manager of BetHer. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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