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Twenty Years of Supporting Education in Tennessee

The first of several American lotteries celebrating significant anniversaries this year, the Tennessee Education Lottery has produced results that make everyone proud.

By Patricia McQueen

February 16, 2024

NASPL Insights Online

On January 20, 2004, the very first tickets were sold by the Tennessee Education Lottery Corporation (TEL). For the first time in modern history, people in Tennessee could purchase a legal gambling product in their own state, despite similar opportunities all around its borders. Twenty years later, that Lottery has contributed more than $7 billion to education programs in the state, successfully carrying out its mission and then some.


It was never easy, and like any other jurisdiction, Tennessee has its own story to tell. Just ask President and Chief Executive Officer Rebecca Paul, who has led three startups – Florida, Georgia and Tennessee – and been involved in several others. “Every state is different, every enabling legislation is different, and the things that either the legislature or the political environment will allow you to do is different. Success is measured by all of the parameters under which you are allowed to operate, and if you look at that here in Tennessee, we have been very, very beneficial for the people of Tennessee.”

Current and past TEL board members mark the 20th anniversary.

It even began with a bang – launching three weeks ahead of schedule. Those three weeks generated $100 million in revenues and $30 million in profits for education. At the beginning, Lottery dollars supported five programs; now there are 15. A myriad of college scholarship and grant programs are available, plus K-12 after-school programs and an energy-efficient schools initiative. “The impact upon students in Tennessee because of all of the surpluses above and beyond what had been anticipated is probably the biggest signature of our success,” says Paul.

Jumbo Bucks 20th Anniversary Edition

To help celebrate the past two decades, the TEL rolled out a variety of initiatives that were sure to please. For players, the Lottery launched a new family of games and special logo capitalizing on its popular brand Jumbo Bucks, aptly named Jumbo Bucks 20th Anniversary Edition. Internally, extra pizazz was added to the annual staff training in the form of retrospective tribute presentations, anniversary refreshments, decorations and a celebratory reception for staff and the Board of Directors, with anniversary-themed premium items provided to the entire team. The TEL also created a beneficiary commercial about the anniversary and the spectacular news of having funded more than two million scholarships and grants to students throughout the state.

A Most Unusual Market

 As noted, the Tennessee market is different. Before the launch of the Lottery, the state was bereft of any other legal and regulated gaming option. Only Indiana among other U.S. jurisdictions had similarly established its lottery before any other forms of gaming, doing so in 1989. Every other American lottery startup went into a market already familiar with at least some other legal forms of gaming; with the older lotteries, that meant primarily pari-mutuel wagering and/or bingo and charitable games.

“Back then, Tennessee didn’t want any gambling,” says Paul. Charitable bingo and raffles had been authorized in 1971, but declared unconstitutional in 1989. Voters in certain localities approved horse racing, and there was even a Tennessee Racing Commission established in 1987. Over the ensuing years, however, the Commission never did approve a track license, and the law creating it was allowed to expire in 1998.


Four years later, voters approved a constitutional amendment authorizing a lottery charged with raising funds for education; the same amendment allowed eligible charities to annually offer a single “game of chance” fundraising event.

But, as Paul points out, that lack of gaming competition isn’t part of the story behind its stellar record. Tennessee is one of just two states with eight border states (Missouri is the other), and other forms of gaming are available within fairly short drives for many Tennessee residents. More impactful, she says, is the enabling legislation that allows the TEL to operate more like a business. “We have the ability, as we see what works and doesn’t work in Tennessee, to change on a dime. That business structure is a big part of our success.”

“We were known for integrity, and they wanted us to create a foundation based on that principle. We made sure we put in all the controls possible to protect the players in Tennessee.”

And unlike jurisdictions where other forms of gaming often followed a lottery launch within a few years, it was 16 years before Tennessee brought in something new when sports betting launched in late 2020. The TEL was instrumental in setting up sports betting in Tennessee, but ongoing regulation was handed off to a state agency about a year after its debut. At the root of that unique arrangement was integrity. “No one in Tennessee really knew anything about sports betting,” notes Paul, so the startup was given to the Lottery. “We were known for integrity, and they wanted us to create a foundation based on that principle. We made sure we put in all the controls possible to protect the players in Tennessee.”

Instant Emphasis

The sports betting assignment completed, Tennessee continues its lottery heritage with instant tickets as the dominant product line. In recent years, these games typically account for 80-85% of total sales, depending on the performance of the big jackpot games. That often puts Tennessee at the top of the list when looking at instant games as a percentage of traditional lottery sales among all American lotteries.

Tennessee Treasures and Lucky 7's were two of the Lottery's first four instant games.

That strong influence of instant games is no accident. Paul’s experience with other lotteries includes those where daily numbers games are important products, thanks to a long heritage of illegal numbers games in the big urban Eastern markets. “Without that strong base of a 50% payout game for 3- and 4-digit numbers games, we had to take a very different strategy in Tennessee than in any other jurisdiction that I’ve been involved with.”

“We paid more attention to the instant product than we did anywhere in my other startups, because we believed that was where we could make the biggest difference in the success of the Lottery.”

On top of that is the popularity of multi-jurisdictional games such as Powerball, Mega Millions, Lotto America and Cash4Life; all are available in Tennessee. Their management is not determined by any individual lottery, and local marketing probably doesn’t move the needle too much, so the choice for Tennessee was obvious. “We paid more attention to the instant product than we did anywhere in my other startups, because we believed that was where we could make the biggest difference in the success of the Lottery,” explains Paul. The TEL even launched with four instant games, which was unusual 20 years ago. The goal was to develop full relationships with retailers at the very beginning, and to get them (and players) used to having a choice of games from the start.

TEL staff celebrate the launch of Lotto America.

Everything about instant games is carefully studied, including price points, payouts, game themes and even colors. “You have to balance all of that and work on your instant ticket portfolio to help drive profits. We don’t want a huge increase in sales only to have a decline in profits. That’s not what we are all about.” And over the years in Tennessee, instant game gross revenues have grown an average of nearly 6% annually, while profits to education have grown an average of about 4.5% annually.

It’s by design that Tennessee has one of the lowest prize payouts in the country. “We look at per capita profit as opposed to per capita sales. Obviously, we have to drive sales to make that profit, but we do it very judiciously and very cautiously, making sure we protect our margins.”


Aside from instants and the multi-jurisdictional draw games noted, the TEL also offers Cash 3 and Cash 4 daily games, and the rolling jackpot games Tennessee Cash and Daily Tennessee Jackpot. The latter is the Lottery’s newest game, having launched in late 2022. There is also Keno to Go, with games every four minutes viewable on the Lottery’s website or app.

Responsibility – And Diversity

While games provide the revenue, the culture of the Tennessee Education Lottery is defined by responsibility, diversity and inclusion.

The organization is certified at Level 4 of the World Lottery Association’s Responsible Gaming Framework, and also maintains the highest level of certification in the NASPL/NCPG responsible gambling verification program. “All of our marketing strategies take into account responsible play, so we try to focus on fun and entertainment, and on making you smile when you see a Lottery commercial,” Paul emphasizes. There’s also considerable marketing emphasis on where the money goes – to the students across Tennessee. “We’ve raised over $7 billion and over two million scholarships or grants have been funded. That’s terrific for a state our size.”

Marketing also is an important way to emphasize the importance of diversity and inclusion, with award-winning campaigns during Black History Month. “We are very proud of the diversity and inclusion in everything we do. Our staff is more than 50% female and just under 50% people of color.” It doesn’t stop with that close-knit staff of about 175 employees; where possible, the TEL works with minority-owned businesses for operational needs, and its primary vendors have minority business participation and other diversity and inclusion projects as part of their corporate goals.

The TEL also offers an internship program, working with Historical Black Colleges & Universities to bring in 10 to 15 interns during most years. Not only do the interns receive real-world work experience, they also participate in training programs that include various aspects of job search techniques, from dressing for success to creating favorable social media pages. Sometimes, interns are hired at the end of their education, and today there are about 20 current or past employees who were former interns. “It has been a terrific program,” says Paul, whose assistant Stephanie is one of those former interns.

And to develop its employees from within, the TEL also periodically offers “Emerging Leaders,” a year-long program for rising stars who have leadership potential.

Facts about the Tennessee Education Lottery


Future Paths

Without realistic prospects for iLottery or some of the industry’s retail modernization programs due to Tennessee law (Lottery tickets can only be purchased with “paper or coin currency”), for now the TEL has to set its sights on other growth paths.

Paul, who is President of the WLA, also takes an active role in NASPL and the Multi-State Lottery Association. With the multi-jurisdictional games, there is ongoing work involving “colleagues from around the country and around the world. A lot of the things we are working on have more interesting choices than just ‘let’s make the jackpots get bigger next year.’ We have to look at other things to augment sales in the years where there aren’t multiple billion-dollar jackpots.”

Certainly, there will be continued emphasis on Tennessee’s bread-and-butter instant games, but Paul also sees other opportunities to work within state statutes. And she’s quick to credit the TEL’s primary vendors for looking at every other possibility for growth under the existing statute. “We always have to work within those parameters. I think we’ve done an excellent job!”


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