Which Education Initiatives Should Tennessee Sports Betting Taxes Benefit?

Posted on January 14, 2021

Education funding is nearing an all-time-low in Tennessee.

One state congressman, David Hawk, plans to present a solution to the issue during this year’s general assembly.

If approved, his proposed legislation would allocate sports betting tax revenue to K-12 school systems state-wide.

Younger students face educational jeopardy

Tennessee sports betting launched back in November 2020 and generated roughly $2.3 million in tax revenue during the first month alone.

Of Tennessee’s sports betting tax revenue, 80% currently goes to the Lottery for Education account. The Tennessee Education Lottery, which manages the account, then divides funds between various college-oriented education programs.

Hawk believes younger students are the larger concern this year and funds should be apportioned to them instead. He said,

“I’m going to try to take those dollars, 80% of those dollars, and put them back toward local governments for K though 12 facility building. It’s something that has not been tried before, so I’m going to try to dedicate those funds.”

If first-month revenue is any indication, sports betting should generate a yearly tax yield of over $27 million. This leaves the Lottery for Education account with upwards of $21 million for distribution.

As of now, the Energy Efficient Schools Initiative (EESI) and Afterschool Programs (LEAPS) are the only included initiatives geared toward grade-school students.

Rather than funneling money directly to educational resources, Hawk hopes to allocate funds toward school facilities themselves:

“I specifically hope to assist local Tennessee school system funding bodies to better address facility needs by directing a majority of the revenue from online gaming to capital building, improvement and maintenance programs for our K-12 facilities.”

Once students resume in-person learning, the state must update classrooms in order to adhere to new COVID-19 guidelines. This will be a costly venture. Hawk said,

“For many – and various – reasons across Tennessee, building project needs are top priorities to local government funding bodies.  The current TN Basic Education Program (BEP) has a small amount of state funding that goes toward facilities, so I want to increase those dollars and keep those monies outside the BEP formula.”

Tennessee legislators set sights on increased education funding

Hawk is not the only legislator with increased education funding in mind, however. In fact, education will be highlighted during a good deal of the general session.

These issues are more pressing than ever now that they have been intensified by the COVID-19 pandemic.

A special session, called by Gov. Bill Lee to address important education topics, will begin on Jan. 19.

During the session, Lee and his team will propose education-related bills pertaining to literacy, school funding, teacher pay, teacher accountability, and pandemic-related learning loss.

Gov. Lee introduces the new legislation in conjunction with The Department of Education (TDOE)’s recently announced $100 million phonics-based literacy initiative.

TDOE predicts that reading proficiency among third-grade Tennesseans will decrease by 50% due to pandemic-related school closures. Similarly, math proficiency will see a 65% decrease.

Lee said,

“We know that the COVID-19 pandemic has caused immense disruption for Tennessee’s students, educators, and districts, and the challenges they face must be addressed urgently. Even before the virus hit, and despite years of improvement, too many of our state’s students were still unable to read on grade level. I’m calling on the legislature to join us in addressing these serious issues so we can equip our hardworking educators and districts with the resources and supports they need to set our students on the path to success.”

A number of Tennessee legislators have now jumped on the bandwagon to bring increased education funding to school children.

Hawk’s proposed legislation to shift sports betting tax funds in that direction should fall right in line with fellow ambitions.

That is, as long as there is no pushback from lottery officials.

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Alec Cunningham

As a college athlete, Alec Cunningham played Division II golf at Tusculum University. She graduated in 2015 with a bachelor’s degree in Journalism and Professional Writing. She then returned to her love of written word in 2000 after working in the music industry as a concert promoter, tour manager and artist developer. As a journalist, she's covered a variety of topics and currently specializes in Tennessee online sports betting and Virginia casino news. She served as a panelist at this year's All American Sports Betting Summit, discussing the ever-evolving role of women in the gambling industry.

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