From what I understand, money paid out was calculated after removing state profit from sales. So the state always profited, whether prizes were paid or not. It was effectively a per-ticket tax.

What changed was the distribution of winnings among players and operator. If everyone had cottoned on the “winning strategy”, the prize would have simply been divided in smaller and smaller parts - at some point, the winning strategy would have become a losing one - and the operator wouldn’t get to keep any “unclaimed prize”, only whatever fixed per-ticket fee they might have applied.

That’s precisely what the rules aimed for, btw. They wanted to unload prize money at higher rates over a certain threshold, for their own reasons - and they did. It just so happened that a small number of players benefited disproportionately more than others, because they played smart.

Imho the operators chickened out - as long as their profit model allowed for all prize money to be really given away, they could have continued, maximizing their overall revenue. However, if “keeping some of the prize money” was part of the expected operator profit, then yeah, it couldn’t be allowed to go on.