How does the lottery make money?

The lottery makes money by collecting revenue from the sales of tickets, service fees, and commissions. Here is a closer look at the ways the lottery makes money:

• Sales of lottery tickets. The lottery generates a ton of revenue from the sales of its lottery tickets. The more customers purchase tickets, the bigger the pot gets for the eventual winner, but this also increases the amount of money the lottery earns for every pot.

• Service fees. Ticket sales for the lottery also make money through service fees by charging a fee to the company's courier service. This refers to the buying and storing of lottery tickets.

• Commissions. Traditionally, state-funded lottery systems pay a commission to the retail partners that sell their lottery tickets.