That's a very clever scam. Selling lottery tickets is a sure way to make money but only the government is allowed to sell lottery tickets. By not activating the tickets, those tickets were never sold and he pockets the sales revenue, small prizes are not a big deal for him to cover and should the win be big enough that he couldn't cover it, he could still activate the ticket. He is taking a risk because if he's doing this systematically then the lottery commission will detect that his sales are less than expected and should they investigate, there would be far fewer unsold stock on hand then there should be. Of course, just like money laundering, if he keeps it to a small fraction of his overall sales, they may be none the wiser.
Some lottery commissions avoid this by having the delivery service scan the packs so that it's a two step activation process, the delivery man activates to indicate that it has reached the store and the retailer activates for sale, plus when the games close, the retailer is obliged to account for and return all outstanding tickets.
You should report him to the lottery commission. A simple inquiry as to why winning the tickets purchased at that specific store can only be redeemed at that store should suffice.