Tennessee's Lottery Scholarships Face £80M Shortfall as Sports Betting Cuts Revenue

Students may lose financial aid as sports wagering reshapes Tennessee's gaming landscape. Can lawmakers bridge the growing funding gap in time?

, and Administrator

2026 March 18 . 4:02 PM

1 min read

The image shows a blue poster with text and numbers that illustrate the number of sports grants... — The image shows a blue poster with text and numbers that illustrate the number of sports grants since 2009. The text reads "Sports Grants Since 2009" and the numbers indicate the amount of grants that have been granted over time.

Tennessee's Lottery Scholarships Face £80M Shortfall as Sports Betting Cuts Revenue

Tennessee's Lottery-funded scholarship program is facing an £80 million budget shortfall. Officials have now warned that student awards could shrink unless the financial gap is closed.

The drop in funds comes as sports betting, legalised in 2019, begins to cut into traditional lottery sales.

Sports wagering launched in Tennessee in 2020, adding a new source of gaming revenue. While lottery sales had stayed steady at around £1.5–1.7 billion annually, the introduction of sports betting has since eaten into those figures.

Tax revenue from sports gambling has already topped £100 million. Yet despite this boost, the shift in player spending has left the state's scholarship fund under pressure. Higher education authorities now say cuts to student support may be unavoidable if the trend continues.

The scholarship program relies heavily on lottery proceeds. With sports betting now diverting some of that income, lawmakers must decide how to fill the gap. Without action, fewer students may receive full financial aid in the coming years.