The story referenced by JadeLottery is almost certainly in error. Assuming it is, it's a safe bet that the reporter got accurate info from the lottery spokesman and then screwed it up. Just about every reliable source says that the terminal generates the numbers, and the job of the central computer is to create a record of each play and after that record is created authorize the terminal to generate the ticket.
I'm not sure what you think is difficult to prevent. If you think it would be difficult to prevent repeat combinations you can easily demonstrate it to yourself by flipping a coin or rolling a die. With a coin every time you get 2 heads or tails in a row you're seeing how random probability results in repeats. With a die you should get a repeat with 2 rolls once out of every 6 tries. Getting all 6 possibilities from 6 rolls should happen once out of every 65 tries, so you can expect t repeat at least one number in 64 of 65 tries. Random probability guarantees that repeats will happen. The odds are different, but the exact same principle applies to generating combinations for lottery tickets.
Preventing repeats would also be easy, but would require actively preventing the repeats that naturally occur. Te central computer would have to check each terminal request against all previously issued tickets, and require the terminal to generate a different combination if a repeat is requested. When ticket sales are only a tiny percentage of the possible combinations there would be relatively few repeats, but as sales increase there would be more and more overhead. Preventing repeats across state lines would be more difficult because there are far more tickets involved and all of the states would have to be linked together, but it's certainly possible. Of course that would completely eliminate a main point of QP's - they're randomly selected combinations.