Including GaTech, a top5 eng school, that requires an A average to get in.
Source: dealing with undergrads complaining about their grades and their effect on their scholarship.
EDIT: I agree with what you maybe claiming that "education" does not justify legal gambling. And you're certainly right that most states abuse this argument and the fungible nature of money to just slosh money around.
EDIT: the lotto money is put in a fund that goes to pre-K programs and scholarships. The average required to keep the scholarship is set by the fund's size.