When you buy a lottery ticket, the money you hand over to the retailer does more than simply get added to an existing prize pool. Some of that money gets siphoned off by retailers for commissions, and some is used to pay the overhead costs of running the lottery system. That leaves a small percentage that goes towards advertising.

The lottery is a booming industry, generating more than $100 billion in sales every year. The state and federal governments are the bigger winners, however, taking in about 67% of the total winnings. In addition, a portion of the money is also taken by retailers, lottery vendors, and other service providers. But is the lottery really profitable?

While the initial odds of winning are low, people are still drawn to the idea that they will win the lottery and become rich. This is a powerful message that lotteries rely on to keep their sales numbers high, despite the fact that many players end up losing.

To encourage more people to play, states advertise heavily and sell tickets at convenience stores, gas stations, and other locations. This entices many people to play, which increases the total amount of money being generated.

Moreover, the government often uses this money to fund different projects. For example, some of it is used to help the disabled and elderly, while others are put towards education and infrastructure. In the case of Wisconsin, 99% of the lottery winnings are spent on lowering property taxes.