Folks buy a lottery ticket for a chance at a prize. If no prize is awarded, regardless of whether or not the prize money is used to sell additional tickets for a future contest award, isn't that false advertising?
How is it legal for folks to sell tickets on prize money they plan not to award, so that they can sell tickets on it again next week? Not awarding of course increases the profit margin of those selling the tickets, but what does it do to the odds that the ticket you bought will pay off?
The standard approach is to fix the odds of winning at much less than one out of the number of entries. This has the added advantage that sequential "failures to award" can bump the prize money for a new entry up, creating interest in the game. The fact that it's a bad investment is old news, while a billion dollar pot is today's news.
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