At its first meeting of April 7, 1808, the new Board of Trustees of East Tennessee College retained the services of Samuel Carrick as president and sole faculty member of the institution and discussed the unsuccessful attempts to collect from squatters on land granted to the college as part of the Compact of 1806. It authorized the president to solicit funds, but when Samuel Carrick died on August 17, 1809, the trustees closed the institution because of lack of funds.
The board then petitioned the General Assembly to allow it to conduct a public lottery to raise funds to help defray administrative expenses. Between 1794 and 1831, the Territory South of the River Ohio and its successor, the State of Tennessee, authorized 107 public lotteries (and 11 quasi-public lotteries held for the private gain of the petitioner between 1819 and 1929) many of which were for the purpose of establishing or operating educational institutions. The Tennessee General Assembly granted East Tennessee College’s petition on November 22, 1809, appointing five trustees (Hugh L. White, Thomas McCorry, James Campbell, Robert Craighead, and John H. Gamble) to hold a lottery for the college.
Beginning in January 1810, the trustees offered for sale eleven thousand lottery tickets at $5 each and promised at the drawings to award 3,405 prizes ranging from $6 to $5,000, and totaling $55,000, which was the whole amount expected from the sale of tickets. From each prize, however, 15 percent was to be deducted for the college ($8,250 total). As was customary, persons of substance were solicited to sell tickets for the lottery. Former President James Madison did not respond; former President Thomas Jefferson declined to purchase or sell tickets but wrote a letter that may have influenced the plan for the new (1826) campus; Andrew Jackson, former US representative, senator, and Tennessee Supreme Court justice sold nine tickets—10 percent of the total eventually sold.
In 1812 it was announced that only $450 had been received from the sale of 90 tickets and that tickets were being presented for payment for which no money had been received from the agents who sold them. The lottery was cancelled, money was refunded to ticket purchasers, and the institution remained closed until 1820.