The money that people spend on Powerball lottery tickets goes to education and to replacing state programs and services. If a person spends one dollar on a ticket, almost 60 cents goes to the winner for that draw.  The remainder goes to run the lottery games and state programs. While another small amount goes to the Italian conglomerate, Gtech, which operates lotteries in nearly 50 countries including the United States. 
In the US, only 15 states use all the money spent on lottery tickets for educational purposes. About one-third of the money spent on lottery tickets in other states goes back into budgets for other services. It seems that it is easier to raise money this way instead of raising income taxes.