If I offer to flip a coin with you and pay you $10 and heads and take $1 from you on tails you will on average profit by $4.5 per flip. You will never actually win $4.5 in a flip, that is just the probability weighted average of the outcomes. The exact odds of having a losing streak of 100 flips, or of being down after 17 flips or whatever is not important here.
The "problem" with this is not that buying all the empties is profitable, it is that buying a few tickets in a mostly empty field is very unprofitable. The easiest way to fix this is to make sure all money is awarded each draw (or with a sudden death, which sounds fun). I know it kills the growing jackpot though, which would be fun to have.
Just to throw in my .02BTC I love skalansky :-D... His book "The Theory of Poker" covers this scenario perfectly. Also "Gambling for a Living" and "Getting the Best of it".