There are several places in the big cities that specialize in lottery products.  It may not seem like much, but a 5% margin is pretty good, especially in the grocery business.  They do much better on big ticket items like meat, but things like can goods have even smaller margins. 

Consider this- the retailer earns a dollar for selling one $20 ticket.  In a C-store, a lottery product might offer the best return on shelf space in the store. 

Very true.

That's why convenience store owners would give their left arm to have a big winner in their store.  Players will flock there, and will do so loyally for years.  And the more people who go there, the better the chance of a repeat win.  All the while, the commissions add up to big numbers -- with NO OVERHEAD.

This is an interesting article.  Usually retailers complain that they don't get a big enough cut (think Oklahoma) or that it costs more than they make.  When threatened by a loss of business they might have a different take. 

I'm not surprised to see Lotteries branch out.  It makes sense to spread the selling base and get into stores that won't be affected by the increasing price and decreasing sales of gasoline.  I'd expect this to become a trend in all states, as long as they can work out the details.  Wal-Mart has been reluctant to align itself with Lotteries, and few of those types of places want the extra work for their clerks.  Kiosks sound probable...