I know the lottery itself has mechanisms to pay out jackpots to groups of up to 100 people.
My question, why not set up a web site to form lottery pools. Set up blocks of say 1000 players and charge $1 to play. Since the CA lottery allows the merchant to keep a small portion of the proceeds you have some revenues, and big winning ticket sellers get a pretty fat prize as well, you could probably make it work.
Funds collected buy tickets in CA lottery, site office has lottery selling machine and pulls mountain of quick picks, assigns them to pools, displays #'s attached to each pool, awaits winners.
I read the site FAQ’s but could not find anything relevant.