It’s never been better to be in the lottery business in the Volunteer State. Tennessee lottery revenue surpassed $1.84 billion over the recently concluded fiscal year.
In the nearly 16 years of operation, that total has never been higher. There’s reason to believe the future could be even brighter, however.
Digging deeper into the Tennessee lottery revenue numbers
From June 30, 2019, to the same day this year, lottery sales grew over 2% as compared to the previous fiscal year. Draw-based games accounted for much of that, as that vertical experienced growth of 8.2% year-over-year.
Instant-win games grew as well. Sales in that category rose by 7.4% in the same time period, and were especially robust over the final quarter.
While the COVID-19 pandemic rages, Tennessee residents and visitors haven’t shied away from buying lottery tickets. In fact, sales topped $527.3 million from April 1 to June 30 of this year.
All those impressive sales led to larger payouts for education programs in the state. The lottery originally projected a maximum distribution of $418 million for the education fund.
The lottery ended up sending $420.6 million toward that funding source, however. It also contributed $17.6 million toward after-school programs in the state.
In future years, revenue could grow even more. That’s dependent on some factors within the lottery’s control and others that are beyond its grasp.
Online sports betting could increase revenue, but how much?
Besides its instant-win and scratch-off games, the lottery is also involved in the regulation of online sports wagering. Right now, it’s in the process of licensing privately-owned companies to take part in that.
The sooner sportsbooks start taking wagers in the state, the better for the lottery. Every day that goes by without legal options represents revenue lost to the illegal market.
While the lottery controls much of that rollout, it has no control over what sporting events take place or how. Athletes, sports teams, leagues and other officials have jurisdiction there.
For example, if the college football and NFL seasons are compromised by COVID-19, the potential to capture revenue this fall will be greatly affected. That remains the situation until the pandemic ends.
If everything goes as desired, however, this fall could bring in millions of dollars of new revenue via sports betting. That should have little effect on the sales of lottery tickets, as research shows that lottery ticket buyers tend to be younger than sports bettors.
Depending on the circumstances, the 2020-21 fiscal year could surpass the last year for the lottery. Some of those circumstances are in the lottery’s own hands.