State Rep. Mark White of Memphis is sounding the alarm that Tennessee’s lottery-funded HOPE scholarships could feel a financial pinch as online sports betting booms and traditional lottery ticket sales soften. He says a state audit due out soon could trigger moves in Nashville that ripple down to Memphis-Shelby County Schools and the students who depend on those awards.
Speaking with WREG, White said that “adding anything new onto lottery dollars is off the table to protect original HOPE scholarship dollars.” He told the station he has filed roughly a dozen education bills this session, including a “promising futures” proposal and extra tutoring tied to the state’s third-grade retention rules. White said more Tennesseans are now betting online than buying lottery tickets at stores, and that the audit, expected in about two weeks, could lead to legislative intervention if it confirms funding shortfalls.
Where The Money Comes From
The HOPE Scholarship is the single largest draw on Tennessee’s Lottery for Education account, taking up about 73.6% of lottery expenditures in fiscal year 2022–23, according to the Tennessee Comptroller. Sports wagering in Tennessee is subject to a 1.85% privilege tax on gross handle, and 80% of that tax revenue goes to the Lottery for Education Fund, 15% goes to local governments, and 5% goes to mental health programs, according to the Tennessee Sports Wagering Council. At the same time, lottery sales have dipped in recent years, and lawmakers put a separate scholarship plan on hold after lottery revenue fell by about 70 million dollars, Axios Nashville reported.
What This Means For Memphis
White told WREG that if the audit shows a structural gap in funding, lawmakers may have to reshuffle money or lean more heavily on sports wagering tax receipts to keep HOPE scholarships fully funded. He also said districts like Memphis-Shelby County could face state-led intervention or restructuring if finances tighten. The district recently named Dr. Roderick Richmond as its permanent superintendent, and local leaders say any state steps would be designed to limit disruption in classrooms while budget issues are sorted out.
What Comes Next
State officials are now waiting on the audit results and updated revenue estimates. The Comptroller’s office has recommended that the State Funding Board invite multi-year projections from the Sports Wagering Council so policymakers can better see potential gaps ahead of time, according to the Comptroller’s analysis. If the audit confirms a shortfall, legislators could decide to steer a larger share of sports wagering money toward HOPE obligations or make other budget moves during the current session.
For students and families who rely on HOPE and other lottery-funded aid, the next several weeks could determine whether their awards stay steady or get pulled into a broader funding shuffle. Lawmakers say they want to protect existing scholarships, but how Tennessee balances weaker lottery sales with surging online betting will ultimately shape the size and timing of any fix.
