I was wondering how both these syndicates and the state we winning. I think I understand now.

Lotteries are zero sum games so no extra money is being created. All ticket purchases either go to the state or the winners. So if the players have a positive return how can the state also be winning?

The players have a positive return only for the rollover round. The players have a negative return for all other rounds, where the state makes its money, and the syndicates don't play.

So the people who lost are all the suckers who played in non-rollover rounds.