My thoughts exactly. Lotteries are primarily a tax on people who can't do math. So if those who can do math make money with it, the more the merrier. In fact, they'd be doing a public service if they bankrupted the lottery in question.

There used to be a sign on I-10 as you approached the Biloxi, Mississippi area. It was for a casino and said something like "Our slots have 98% payout!". I have no doubt as to the veracity of such a statement, because 2% of the money that flows through slot machines is more than enough to turn a profit from them.

There are locals casinos in Vegas that have video poker machines which pay out more than 100% with perfect play strategy, the problem is that the stakes are so low, say 25 cents, that it would take way too long to make any real money.

These lotteries are obviously a different story since you can buy as many tickets as you want.

Those sound like a 'loss leader' marketing strategy. Whoever operates the machines may lose money consistently, but they bring customers in who otherwise might not be there.