In Oregon, I think lottery winners get 33% of the money bet (33% goes to advertising and 33% to funding "good causes"). Casinos take much less of a cut, but, we can get most all the amounts bet. What good causes get funded should be up to the gamblers (see below). It will be hard on States and whoever runs the current big lotteries, but, I think the future will include provably fair, trustless, decentralized, automated, jurisdiction-free and smart-contract-based "games of chance" you can play from home.
If we use blockchain blocks as the source of the random number generator (not sure that is a manipulation-free number source), we could have games where you have to match anywhere from one number to many digits. Maybe make it so it keeps going until there is a match. Do you prefer lotteries with bigger payoffs or better odds of winning? Players will be able to choose which kind of difficulty they prefer (with various games going on at the same time).
I think the most popular lotteries let you buy in for a small amount with a chance to win millions. Having it so someone could win on any block if they match allows new people to keep pouring more bets in after the jackpot size has grown more tempting. I'm thinking a bet on the big jackpot might last something like a days worth of blocks (144 chances to win) rather than until there is a win. Not sure whether bets should last more or less blocks than the 144 I mention.
It could also be set up so if, for instance, there was a 12-number match required for the main jackpot, there would be some smaller (% of the current jackpot) payouts for 9, 10 and 11-number matches as well. People would be watching the blocks come in…
There will be a wallet or other software that you can use to display your current and past bets and the live feed of the random numbers as they are created. Your software will be able to notify you when you win and may even do tax-preparation calculations/record-keeping for you.
I'd like it to be decentralized and automated so it is easy to maintain. "The House" (lottery owner) might not be needed if it is decentralized and automated? If we need a "house", we should be able to set their fees low to cover their expenses and time. We could have various different benefit lotteries where a 0.5% cut, for instance, might go to a good cause such as a "BCH Developer Benefit Lottery" or "Free Ross Benefit Lottery" and people could choose which ones to support.
Gambling is addictive and people may ruin their lives with this functionality. If you know good online information/links to help people with a Gambling addiction or to help people avoid getting addicted, please add that in the comments. I may edit this to add some here as well.