It says that the state made money on this, too... though I don't quite understand how.
There may be an issue of time-value of the money, if the state has the money from the tickets in a large pool that they can invest well or has a slightly higher interest rate than the rate for small accounts. In that case, this essentially functions like an investment. But this seems unlikely since the time between when tickets are bought and when payout occurs is short.
"In 2005, Dr. Zhang was having an ongoing discussion with friends about the Lottery, with Dr. Zhang taking the view that it offered poor odds and was a tax mainly on poor people. To bolster his argument, he began analyzing the Massachusetts Lottery’s various games. But when he got to Cash WinFall, he was shocked to find that during roll-down drawings the odds were in the bettor’s favor."
Full story here - it's rather engrossing.
http://www.mass.gov/ig/publications/reports-and-recommendations/2012/lottery-cash-winfall-letter-july-2012.pdf