NY is a really crappy state for providing realistic information about the games. I don't think they've offered information on cash values for 5 years or more. I'm not sure how they fund the lotto prizes, but here's some approximate info based on how many winners there were for the last lotto drawing.
There were 17,228 winners of the lowest prize, and 706 winners of the 4th place prize. The odds of winning those prizes are 1 in 48.08 and 1 in 1,089.92. Multiplying the number of winners by the odds we get 828,322 and 769,483 as a likely range for the number of tickets sold. The total payout for all prize levels but the jackpot was about $90,000 (including the 2nd place prize that soembody will eventually collect). As a rough figure the $300k jackpot increase means about $215,000 for the cash value. That's a total of just over $300,000 from sales of $750 to $800k.
That's not great, but it's right where it should be if they put 40% of sales into prizes. It used to be 50%, but I wouldn't be at all surprised if they changed it and didn't bother publicizing it or announced it as quietly as they could.
Of course some of the blame has to go tot he players, too. I've watched people buy MM tickets for a $12 million drawing when lotto was close to that or even higher. Why somebody does that when the lotto odds are about 7 times better escapes me. I'll take 7 times more likely to walk away with $4 million over the lousier chance to get $5 million every time.
BTW, you noticed the most recent 2nd place prze? After the jackpot was won it continued to roll, and was finally hit at about $520,000. Based on increases in that amount I'm guessing that sales really didn't increase. I guess the vast majority of people only look at the advertised jackpot and decide without having a clue about the other details.