Doesn’t the initial buy of 2 dollar ticket the government takes 1 dollar, half for the schools? That leaves 1/2 for the winnings?
How the money is allocated depends on the state, but in terms of taxes to the winner, it’s just $1, not an additional 25%. On buyers of tickets in total, its about 75% going to state and federal taxes one way or the other. That’s why I don’t buy until the NPV is > $2 per ticket after tax, which it is now.