Tennessee lottery approved

Amber McDowell

Thursday, June 12, 2003 | 9:52 a.m.

NASHVILLE, Tenn. -- Let the games begin!

Tennessee on Wednesday became one of the last states in the Southeast -- and the nation -- to legalize gambling as Gov. Phil Bredesen signed into law legislation authorizing a lottery that funds college scholarships.

"This is truly a historic moment," Bredesen told the cheering crowd of more than 100 citizens, lawmakers, state officials and high school seniors gathered in the Capitol for the signing.

"... This is very much about children across the state using the lottery as an opportunity to get an education when otherwise they might not have been able to."

As early as January, Tennessee will join 38 states and the District of Columbia in selling lottery tickets. The first scholarships will be handed out for the fall semester of 2004.

The approval of a lottery in Tennessee leaves North Carolina as the only state in the Southeast without any state-sanctioned form of gambling -- although it is home to an Indian casino.

Florida, Georgia, Kentucky, Missouri and South Carolina have their own lotteries, while Mississippi is home to the casino towns of Tunica and Biloxi, Alabama has dog racing, and Arkansas boasts dog and horse racing.

Only Utah and Hawaii do not permit any form of gambling.

The bill signings came almost two weeks after the General Assembly concluded five months of divisive debate over the bills that set up a nonprofit corporation to run the games and determine how to distribute the proceeds.

The battle that preceded that -- to strip a ban on lotteries from the state constitution -- took 18 years and ended with approval during a statewide referendum last November.

"It's like the cherry on top of a hot fudge sundae," said Sen. Steve Cohen, who campaigned almost two decades for the lottery. "... It's satisfying because of the struggle it's been to get to this point, and the forthcoming benefits to students."

Cohen hopes the first lottery tickets are sold in January, but the governor said it may take longer.

"I think in the first quarter of the year is a virtual certainty. I think January 1 is probably difficult," Bredesen said. "One of the important things we have to do is recruit and train retail outlets and in the Christmas season that gets particularly difficult.

"... If I can speed it up I will. We're going to do it right, not make mistakes and not do something foolish."

The first step is to appoint the seven-member lottery corporation board by July 1. Board members then will hire a national lottery vendor to run the games.

Bredesen said he has not chosen any board members, but said he is "working really hard on it with a lot of good suggestions."

"I want to have (a board) that looks like Tennessee, geographically and racially and in regard to everything else," he said. "... A lot of people would like to and are willing to serve on this board."

Cohen believes Tennessee should pattern its setup process after South Carolina, which started its lottery in January 2002. South Carolina's Legislature passed its lottery bills at about the same time of year as Tennessee did -- and had its games up and running seven months later.

"It's the most successful startup in the last decade," Cohen said. "South Carolina is a model -- it got it done quickly and it got it done right."

But even if the lottery begins as expected in January, scratch-off games would be the only type of tickets available immediately, Cohen said.

It likely will take several months before the technology is in place for online games, he said, and it will be at least late summer or early fall of 2004 before Tennessee could be invited to participate in multistate games such as Powerball or the Big Game.

Profits from the games must first go to scholarships, with any excess directed only to pre-kindergarten programs and K-12 school construction. In its first year, the lottery is expected to bring in at least $200 million after prizes and expenses, with scholarships costing an estimated $175 million.

Students must have either a 3.0 grade-point average in high school or 19 ACT score to qualify for awards of up to $3,000 for four-year schools or $1,500 for two-year community colleges. There are no academic requirements for receiving $1,250 awards to state technical schools.

Seventeen-year-old Brittney Warren had planned on attending Middle Tennessee State University but with a scholarship could afford to go to the University of Tennessee.

"It's a lot of money our parents don't have to pay for our educations," said Warren, who this fall will be a senior at Hendersonville High School near Nashville.