According to the Iowa Lottery website they do this:
For more than 22 years, Iowa Lottery profits have helped to make Iowa a better place to live, work and raise a family.
Since its start in 1985, the Iowa Lottery has provided entertainment and prizes to its players while at the same time raising more than $1.1 billion for the state programs that benefit all Iowans. And, the lottery continues to add tens of millions of dollars in profits to that total each year.
Through the years, lottery funds have been used in a variety of ways to enhance the state, including projects to create new recreation areas, support research at Iowa's public universities, develop new products and techniques for agriculture, and promote tourism in Iowa. For that, the lottery thanks its players. When you play the lottery, Iowa wins.
Personally,I think they are paying off the lawsuit that they lost a couple of years ago.Iowa had these machines that were similar to slot machines for awhile.The state legislaters decided that they were illegal and forced the lottery to remove them.The companies that owned the machines and contracted with the lottery to put them in business' sued the lottery and won.The lottery responded by reducing the amount of scratch off tickets that were winners and the amounts of the top prizes on scratch off tickets.I seldom play scratch offs in Iowa,anymore.I have better luck in illinois,which is only a mile away from my home and in Missouri which is also only a mile or two away.I do play Powerball in Iowa,though.I don't want to be paying taxes to Missouri & Iowa for a powerball win in Missouri.